Bundeskartellamt clears CPTN joint venture for acquisition of Novell’s patents

On 20 April 2011, the German Federal Cartel Office (Bundeskartellamt  or “FCO”) cleared the creation of the joint venture CPTN established by Microsoft Inc., Oracle Inc., Apple Inc. and EMC Corp as a vehicle to acquire a portfolio of 882 software patents and patent applications from Novell, which can now merge with Attachmate after CPTN has obtained clearance. The joint venture will be then dissolved after three months.

The project had already been notified to the US Department of Justice (“DOJ”) and the FCO in December 2010, but later withdrawn at the end of December 2010 in response to competition concerns expressed by both authorities (see Newsletter 1/2011 p. 6 and Newsletter 2/2011 p. 7 for background information).

The parties addressed these concerns, particularly to protect competition and innovation in the markets for operating systems, notably Linux’s open source operating system, and virtualization software, in which Microsoft and EMC/VMware have strong presence.  According to the FCO, on these markets, there is a general possibility to apply so-called FUD strategies (“Fear, Uncertainty, Doubt”) against smaller competitors, which can be pursued by means of patent actions, as pointed out by numerous complaints by the open source community.

In particular, the parties agreed that:

  • Microsoft will sell back to Attachmate all of the Novell patents that Microsoft would have otherwise acquired, but will continue to receive a license for the use of those patents, the patents acquired by the other three participants and any patents retained by Novell;
  • EMC’s share of the patents will not include a number of patents that appear to be of relevance on the market for virtualization software.

The FCO and the DOJ have cooperated during the investigation and have shared information and views about the effect of the proposed transaction.  The DOJ also cleared the acquisition of the patents and patent applications but it indicated that it will continue to investigate the distribution of the patents to the individual owners. [Gabriele Accardo]

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