Patent Deal Up in the Air

By Peter Galli  |  Posted 2006-11-20 Print this article Print

Microsoft weighs indemnifying linux customers if agreement cannot be worked out with red hat

While Microsoft is hoping to enter into a patent deal with Red Hat similar to the one it has with Novell, the software company has not ruled out going it alone and providing some sort of indemnification for its customers who use Red Hat Linux.

Earlier this month, Microsoft agreed not to assert patent rights over any technology included in Novells SUSE Linux and to provide support and technology to allow SUSE Linux to work with Windows.

"We would like to strike similar patent deals with all the Linux vendors, but we had to start somewhere," Bill Hilf, Microsofts general manager of platform strategy, told eWeek here at the TechEd IT Forum Nov. 15. "The fact that Novell CEO Ron Hovsepian approached us in this regard made that conversation happen very quickly."

But Hilf acknowledged that it is an awkward situation having Microsofts customers who use Novells SUSE Linux covered by the covenant not to sue, while those Windows users running Red Hat Linux are not.

This is significant given that Red Hat, of Raleigh, N.C., is the top Linux vendor in the United States in terms of market share, meaning that the majority of Microsofts customers who are also using the open-source operating system are running Red Hat Linux.

"Its a tough, awkward situation, and if those customers ask us for some kind of patent indemnification, well look at this. If they ask us to do something, well certainly look at all the options, but the preferred course of action would be for us to strike a similar deal with Red Hat," he said.

But that appears increasingly unlikely because Mark Webbink, Red Hats deputy general counsel, has all but ruled out any similar agreement with Microsoft.

"We do not believe there is a need, or basis, for the type of relationship defined in the Microsoft-Novell announcement," Webbink told eWeek.

However, Red Hat "has and will continue to work with Microsoft on true interoperability and open standards in the way we did in ad--vising them in the development of their Open Specification Promise," he said.

Microsoft, of Redmond, Wash., promised Sept. 12 not to sue developers or customers who use any of 35 Web service specifications.

Hilf, who has been touring Europe since the Novell agreement, admitted theres been much negativity about the deal in the open-source community. "Our intention with this deal was not to create a problem, but rather to solve one," he said.

Bob Muglia, Microsofts senior vice president for servers and tools and one of the lead negotiators on the Novell deal, told eWeek there were two primary motivations behind that move.

"One was interoperability, which is very positive for us in every sense," Muglia said. "The second is to recognize, unambiguously, that there is value to intellectual property within open-source products that are used by customers, and that that intellectual property should be honored."

The deal provides a structure that makes it easy for customers to acquire their open-source technology while honoring the intellectual rights. "And in that sense we think it is a milestone for the industry," Muglia said.

Asked why Microsoft had agreed not to do a similar deal to encourage the adoption of Linux and Windows virtualization solutions through a subscription certificate program with another Linux vendor for three years, Muglia said this was the advantage Novell received by being first.

"We want to be open with everybody, and there is nothing in the Novell agreement that prevents us from working with the other distribution vendors to get a similar set of intellectual property patent protections for their customers," he said. "We very much want to make that happen, as its good for customers and good for the other distribution vendors."

While neither Hilf nor Muglia would give any details about their discussions with Red Hat, Muglia did acknowledge that Microsoft continues to communicate with the Linux vendor. "We want to work with them and would like to structure a relationship where Red Hat customers can be assured of the same thing that Novell customers are," Muglia said.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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