[A2k] US and German competition authorities obtain compulsory licenses on patents to "protect competition and innovation in the open source software community."

Jamie Love james.love at keionline.org
Thu Aug 4 11:34:54 PDT 2011

I had missed this earlier, but noticed it on a blog that Manon posted to
Google Plus.  I think it is relevant to those who peruse compulsory licenses
for medical, software or climate change technologies.  In April of this
year, US and German antitrust officials obtained extensive compulsory
licenses on patents in order to "protect competition and innovation in the
open source software community."  This is the US DOJ press release.


Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASEWednesday, April 20, 2011

CPTN Holdings LLC and Novell Inc. Change Deal in Order to Address Department
of Justice's Open Source Concerns
Justice Department and Germany’s Federal Cartel Office Cooperate Closely on
Patent Matter, Investigation Continues
WASHINGTON – The Department of Justice announced today that in order to
proceed with the first phase of their acquisition of certain patents and
patent applications from Novell Inc., CPTN Holdings LLC and its owners have
altered their original agreements to address the department’s antitrust
concerns.  The department said that, as originally proposed, the deal would
jeopardize the ability of open source software, such as Linux, to continue
to innovate and compete in the development and distribution of server,
desktop, and mobile operating systems, middleware, and virtualization
products.  Although the department will allow the transaction to proceed, it
will continue investigating the distribution of the Novell patents to the
CPTN owners.

The department said that CPTN, a holding company owned in equal measure by
Microsoft Inc., Oracle Corp., Apple Inc. and EMC Corp., and its owners
sought to acquire the patents in a two-stage transaction in conjunction with
Novell’s planned merger with Attachmate Corporation.  In the first phase,
CPTN would acquire the patents and applications.  In the second phase, the
patents would be allocated and distributed to each of the four owners.  In
light of the department’s competition concerns, CPTN and its owners made
revisions to their formation agreements to acquire approximately 882 patents
and patent applications from Novell.  The department said that these changes
were necessary to protect competition and innovation in the open source
software community.

"The parties’ actions address the immediate competitive concerns resulting
from the transfer of Novell’s patents.  To promote innovation and
competition, it is critical to balance antitrust enforcement with allowing
appropriate patent transfers and exercise of patent rights," said Sharis A.
Pozen, Deputy Assistant Attorney General of the Justice Department’s
Antitrust Division.  "Although we recognize that the various changes to the
agreement recently made by the parties are helpful, the department will
continue to investigate the distribution of patents to ensure continued

In order to address competition concerns of the department, CPTN and its
owners have revised their agreements to provide 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 will not acquire 33 Novell patents and patent applications
that have been identified as related to virtualization software;
·          All of the Novell patents will be acquired subject to the GNU
General Public License, Version 2, a widely adopted open-source license, and
the Open Invention Network (OIN) License, a significant license for the
Linux System;
·          CPTN does not have the right to limit which of the patents, if
any, are available under the OIN license; and
·          Neither CPTN nor its owners will make any statement or take any
action with the purpose of influencing or encouraging either Novell or
Attachmate to modify which of the patents are available under the OIN

During the course of their investigations, the Department of Justice and
Germany’s Federal Cartel Office (Das Bundeskartellamt) cooperated closely
with each other, aided by waivers from the parties.  This permitted the
agencies to share information and assessments of likely competitive effects
and coordinate on potential revisions to the parties’ agreements.

"The Department of Justice and the Federal Cartel Office worked together
very closely throughout this investigation," said Deputy Assistant Attorney
General Pozen.  "This was an excellent example of international cooperation
between our two agencies."

Novell Inc. is a Delaware corporation with its principal place of business
in Waltham, Mass.  Its 2010 revenues were approximately $812 million.
 Attachmate Corp. is a privately held corporation based in Seattle.  Its
revenues are not public.  CPTN Holdings LLC is a recently created consortium
created by Microsoft, Oracle, Apple and EMC for the purpose of acquiring the
Novell patents.  It has no sales or revenues.  Microsoft Inc. is a
Washington corporation with its principal place of business in Redmond,
Wash.  Its 2010 revenues were approximately $62.5 billion.  Oracle Corp. is
a Delaware corporation with its principal place of business in Redwood City,
Calif.  In fiscal year 2010, it had revenues of nearly $27 billion.  Apple
Inc., a California corporation with its principal place of business in
Cupertino, Calif., had 2010 revenues of more than $65 billion.  EMC Corp., a
Massachusetts corporation with its principal place of business in Hopkinton,
Mass., had 2010 revenues of approximately $17 billion.

James Love.  Knowledge Ecology International
http://www.keionline.org, +1.202.332.2670, US Mobile: +1.202.361.3040,
Geneva Mobile: +41.76.413.6584, efax: +1.888.245.3140.

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