Microsoft and Novell: Understanding the IP Implications

by on November 2, 2006 · 8 comments

Microsoft and Novell announced a collaborative effort. Whoa, this is big news! Windows and SuSE Linux, proprietary and open source, Microsoft and Novell–working together? Well, yes, according to a recent announcement. And for this collaborative effort to have even been formalized, a required element was some intellectual property rights housecleaning.

Microsoft’s press release says this:

First, Microsoft will work with Novell and actively contribute to several open source software projects, including projects focused on Office file formats and Web services management. Second, Microsoft will not assert its patents against individual noncommercial open source developers. And third, Microsoft is promising not to assert its patents against individual contributors to OpenSUSE.org whose code is included in the SuSE Linux Enterprise platform, including SuSE Linux Enterprise Server and SuSE Linux Enterprise Desktop.

From an intellectual property perspective, numbers 2 and 3 standout – Microsoft’s legally binding promise not to assert its IP rights against SuSE Linux.

What is Microsoft doing here? It’s trying to put SuSE developers at ease that they won’t be sued. So there’s no need to obtain a license from Microsoft. Furthermore, there’s no need for sublicensing – which is particularly important for the decentralized nature of open source development.

Non-assertion covenants (also called a “promise not to assert” or “covenant not to sue”) are binding agreements. It’s a “promise” but it’s still legally enforceable under the doctrine of promissory estoppel–if Microsoft were to withdraw its promise, anyone who justifiably relied on the promise and suffered harm from the withdrawal can sue. They are ways for one party with intellectual property rights to create zones of enforcement and increase certainty for other parties. Its an example of market participants contracting around (or within) the patent and copyright legal system to reduce transaction costs of negotiating, monitoring and enforcing licenses.

Non-assertion promises are better than RAND (Reasonable and Non-Discriminatory) licenses. What is “reasonable” and “non-discriminatory” depends on the particular circumstance and is open to legal interpretation and business negotiation hassles. Furthermore, RAND does not mean royalty-free. For more on Non-assertion covenants see Andy Updegrove’s informative blog post.

I believe we’ll see more and more of these non-assertion agreements from IP rights holders. And I expound further on this in my posting at the ACT blog.

  • http://enigmafoundry.wordpress.com eee_eff

    I think you are right about this being a trend. Companies really do wqnt to innovate, and the way the patent system has worked, it has held back innovation.

    It has become clear, with the rise of FOSS–and the lack of a clear entity to sue, as well as the fallout from becoming a pariah if you try to sue the world, as SCO has tried–that the route to innovate is through making products and evolve them, not patent something and try to sit on it..

  • http://enigmafoundry.wordpress.com/ enigma_foundry

    I think you are right about this being a trend. Companies really do wqnt to innovate, and the way the patent system has worked, it has held back innovation.

    It has become clear, with the rise of FOSS–and the lack of a clear entity to sue, as well as the fallout from becoming a pariah if you try to sue the world, as SCO has tried–that the route to innovate is through making products and evolve them, not patent something and try to sit on it..

  • Braden

    I agree that the route to innovation is by bringing products to market, not just by obtaining a patent. Patents are ideas, and innovation (while hard to specifically define) is more of the process of bringing that idea to market. You can certainly have one without the other, though through the property protections of patents people will often have more incentives to be innovative.

  • Braden

    I agree that the route to innovation is by bringing products to market, not just by obtaining a patent. Patents are ideas, and innovation (while hard to specifically define) is more of the process of bringing that idea to market. You can certainly have one without the other, though through the property protections of patents people will often have more incentives to be innovative.

  • http://weblog.ipcentral.info/ Noel Le

    Hmm, not to nit-pick, but innovation also entails the finished product, not just the process of commercialization. For reference in defining innovation look up this article by Profs Josh Lerner and Marco Iansiti- I think it was released by either Harvard Business Review or AEI-Brookings.

  • http://weblog.ipcentral.info/ Noel Le

    Hmm, not to nit-pick, but innovation also entails the finished product, not just the process of commercialization. For reference in defining innovation look up this article by Profs Josh Lerner and Marco Iansiti- I think it was released by either Harvard Business Review or AEI-Brookings.

  • http://o2se3tak.blogspot.com/ o2se3tak

    Shouldn’t we abandon SUSE?

    After the recent fiasco generated by Novell getting into an agreement with Microsoft and the whole Open Source Community planning to fight Novell both in and outside the court, will it be sensible to shift over to another Linux distribution? There are other distributions that are as good or better that SUSE so which will be best one to migrate to?

  • http://o2se3tak.blogspot.com/ o2se3tak

    Shouldn’t we abandon SUSE?

    After the recent fiasco generated by Novell getting into an agreement with Microsoft and the whole Open Source Community planning to fight Novell both in and outside the court, will it be sensible to shift over to another Linux distribution? There are other distributions that are as good or better that SUSE so which will be best one to migrate to?

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