Blog post

Novell-Attachmate and the CPTN Patent Deal

By Richard Jones | December 17, 2010 | 3 Comments

A colleague of mine, Drue Reeves, pointed me to a recent Channel Register article indicating that it is not just Microsoft behind the CPTN holding company that was created to acquire key Novell patents.  The article indicates that it appears Apple, EMC, and Oracle were also involved with Microsoft in creating the holding company.  To me, this spells that these companies were together concerned about Novell patents getting into the hands of patent trolls.

As many of you know, I worked for Novell in its research and development division for 20 years, and for about six of those years, I served as a technical expert on Novell’s internal Inventions Committee – a group of lawyers and engineers that analyze and review intellectual property submissions from the R&D teams to determine if the invention is worthy of patent application.  As a result, I have an unusual knowledge of Novell’s patent portfolio.  More importantly, in that position, I learned that large technology companies will purposefully seek out and attend defunct technology company intellectual property auctions, with the only goal of purchasing patents to keep them out of the hands of patent trolls.  All of the companies listed know each other from attending these types of events together.  So it makes sense that they would talk with Novell about ensuring its patent portfolio doesn’t fall into the wrong hands. 

So what do large technology companies do with their patents?  These days they serve two goals for the most part:  Protection from other companies and a “big stick” when negotiating with a potential business partner.  However, on occasion large technology vendors use their patents to extract royalties from another company that has used its patented technology and is hurting its revenue stream. Another patent analogy is the arms race during the cold war between the USA and former Soviet Union – the arms (patents) kept each other in step and behaving and bring both to the ‘negotiating’ table on many occasions.

However, if a patent troll gets a hold of a patent, they are only after one thing: royalties while offering nothing tangible in return.  Some have termed this “patent extortion.” Technology vendors do not like this as it can seriously disrupt a product line (and its revenue stream).

Knowing how Novell thinks and the partnerships it has forged with many other technology vendors, this move to place its intellectual property with a holding company is about protecting the industry, and customers, from patent trolls.

Oh, and another side note:  One bit of confusion that I continually see crop up from the Open Source Linux community is that the sale of Novell patents to CPTN spells bad news for them.  NOT TRUE.  Novell never owned UNIX patents (needless to say that any would have long since expired anyway).  Novell owns the UNIX copyrights.  That’s a different animal altogether, and Novell still retains those copyrights – they were not a part of the CPTN deal.

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  • Brian Prentice says:

    Actually Richard, companies like Microsoft are using their patent portfolios as discrete assets. You don’t have to be using their technology and hurting their revenue stream to be asked to pay a license fee. Is this patent extortion?

    “Patent trolls” buy their patents, usually from software vendors. Why then can’t they seek to license the technology they rightfully own when software vendors also do this? Isn’t the problem then with the sale of patents to these organizations? Should Novell be prohibited from getting the best price for their patents if it is a company like Intellectual Ventures making the offer?

    This seems like a double standard. If you infringe a patent held by a software company and they go after you that’s only fair because you’re hurting their revenue stream. But if a patent troll does this then it’s patent extortion.

  • Steve says:

    Novell never owned UNIX patents? Following copied from the APA governing Novell’s sale of the UNIX business to Santa Cruz (SCO)

    Seller’s Patents and Patent Applications Affecting the Business

    Inventory/Country States Serial/Patent No. Date

    A. Owned by Seller

    1. Wong 1
    USA Filed 07/814,854 12/30/91
    Canada Mailed 11/12/92

    2. Raye 1
    USA Patented 4,580,218 4/1/85
    Italy Patented 1,205,650 3/23/89
    West Germany Patented 0155284 11/22/90
    Great Britain Patented 0155284 11/22/90
    France Patented 0155284 11/22/90
    Japan Filed 503,183/84 8/5/84

    3. Weir 2
    USA 7/374,380 6/30/92
    To Be Revived
    Canada Filed 2,018,319-5 6/5/90
    Japan Filed 170,411 6/29/90
    Belgium Filed 90306750.2 6/20/90
    France Filed 90306750.2 6/20/90
    Great Britain Filed 90306750.2 6/20/90
    West Germany Filed 90306750.2 6/20/90
    Italy Filed 90306750.2 6/20/90
    Netherlands Filed 90306750.2 6/20/90
    Sweden Filed 90306750.2 6/20/90

    4. Alecci
    1-1-1 Abandoned 07/468,535 8/1/91
    2-2-2 Continuation 07/742,149 1/14/93
    Under Rule 1.62
    of Alecci 1-1-1

    Page 2 of 2

    Inventory/Country States Serial/Patent No. Date

    Canada Filed 2030438-3 11/21/90
    Italy Filed 90313205.8 12/5/90
    Sweden Filed 90313205.8 12/5/90
    Spain Filed 90313205.8 12/5/90
    Germany Filed 90313205.8 12/5/90
    Great Britain Filed 90313205.8 12/5/90
    France Filed 90313205.8 12/5/90
    Japan Filed 16791/91 1/18/91

    5. Andrade
    USA Filed 07/524,1?2 3/29/90
    Canada Filed 20388433-9 3/22/91
    Japan Filed 089094 3/29/91
    Germany Filed 91302438.6 3/20/91
    Italy Filed 91302438.6 3/20/91
    Great Britain Filed 91302438.6 3/20/91
    France Filed 91302438.6 3/20/91

    6. Doshi-Sahs
    USA Filed 08/280,307 1/26/94

    7. R.C. Pike Patented 4,555-775 11/26/85
    Interest with AT&T

    *Note: Seller and AT&T believe the Pike Patent is being infringed by third
    parties and certain of such parties have alleged that said patent is invalid.

    Looks to me like they did.