What Microsoft and Novell agreed to

It turns out that there are three different agreements: the patent cooperation agreement granting the patent non-licenses, the technical collaboration agreement describing the technical work each company will do, and the business collaboration agreement on the business arrangements. In the case of any disagreement between the agreements, the patent agreement wins out over the other two, and the technical agreement beats the business agreement.

We still do not get to see the full set of terms; they have been redacted, heavily in some places. So one is left trying to make sense of text like:

Fortunately, the bulk of the agreement has not been so heavily obscured.

The core of the patent agreement is about what one would expect, given the conversation over the last six months:

Of course, there's no end of fine print which should be read by anybody wanting to rely upon this non-license. To begin with, Novell's customers only get the non-license from Microsoft for as long as Novell complies with the terms of the agreement. Many of those terms - especially in the termination section - are blanked out. If Novell and Microsoft get into a big disagreement in the future, the non-license could vanish overnight.

The definition of "Covered Products" is complex and full of exclusions. In particular, "clone products" are not part of the deal:

Certain possible clone products shipped before the signing of the agreement are excluded from this definition, but four (Wine, OpenXchange, StarOffice, and OpenOffice) are explicitly excluded from the exclusion - though there is a complicated dance to the effect that those products are not necessarily clone products either. "Foundry products," seemingly being those which are developed by third parties, are excluded. Then, there's the "other excluded products" which include web-based office productivity applications, video game consoles, business applications ("such as accounting, payroll, human resources, project management, personnel performance management, sales management, financial forecasting, financial reporting, customer relationship management, and supply chain management"), "unified communications," and, interestingly, mail transfer agents. If you are a Novell customer running sendmail, and Microsoft claims patents in sendmail, you can still be sued.

There's a few other details; the non-license is, unsurprisingly, not transferable. There is an explicit clause that neither party is acknowledging any infringement or even that the other side's patents are valid. Lots of details on what happens when companies are acquired or spun off. And so on. Novell has recently stated that the company itself remains as open as ever to patent infringement suits by Microsoft, but that's only partly true: both companies have forgiven each other for any infringement which may have happened before the agreement was signed. There is one exclusion here: there is no forgiveness for distributing Wine.

One last thing worth noting: at OSBC, both Novell and Microsoft refused to comment on the possible impact of GPLv3, saying that it was inappropriate to talk about a license in draft form. Novell is a little more forthcoming in the "risk factors" section of its annual report:

The technical cooperation agreement contains relatively few surprises. Each company commits to working to make the other's system work better as a virtualized guest. There will be a special "shim" layer which implements Microsoft's top-secret hypercall API and glues it to Xen or another hypervisor. There will be information sharing on management interfaces for virtualized guests. An "optimization innovation laboratory" will be set up on the U.S. east coast to "showcase, test, and validate" the various virtualization efforts. There is an effort to collaborate on directory and identity management. And there is cooperation around the Office Open XML format; the first term of this agreement is the highly redacted section quoted above, so it's hard to tell what is really going on.

The business cooperation agreement talks about creating a joint marketing plan to sell the various activities described in this deal. Microsoft will kick in $60 million to make this marketing happen; Novell gets to decide how some of that money will be spent. The two companies promise to endorse each other's offerings. Microsoft will be tossing in another $34 million for a sales force trying to sell the combined offerings. There is a special term prohibiting either company from selling the combined Linux/Windows package as a single unit. Each company must separately license its part of the offering to the customers.

Microsoft commits to buying $240 million in SUSE Linux certificates. This section is highly redacted ("Microsoft may also *** through the *** in which case an *** will be *** from the *** for the *** in the Term") so there's a lot of presumably important details we'll never know about. Novell gets an exclusive deal in that Microsoft promises not to make any similar deals with other Linux distributors for three years.

The bulk of this set of agreements really is as boring as some people have claimed. It's two companies trying to make their products work better together and to increase the market for both. The patent agreement is worth some study, though, especially for anybody who is tempted to rely on it to make their business somehow safer. The exclusions from coverage by the non-license have not been highlighted by any of the PR from either company, but they do very much affect the real nature of the coverage provided. The complicated dance around exclusions may just be lawyers trying to nail everything down, or it may indicate a deeper agenda somewhere. For those of us wondering what is really going on, the release of the text of these agreements may have shed rather less light than we would have liked.