12 January 2011

CPTN Withdraws Request to Establish Patent Consortium in Germany (updated)

Discussions and rumours have accompanied the announced purchase of 822 Novell patents by CPTN Holdings LLC for $450 million in cash in the course of Novell's merger into Seattle-based software company Attachmate Corporation (press release). According to a "notified merger project" (Ref. no. B5-148/10 of 06.12.2010; product market: "patents") announced by the German "Bundeskartellamt" (Federal Cartel Office), CPTN has been revealed as a joint venture of the four software heavyweights Microsoft, Apple, EMC, and Oracle (see report). As reported on this blog a couple of days ago, the open source community was so concerned about the patent deal that the Open Software Initiative even lodged a complaint with the Bundeskartellamt to "urge the FCO to investigate the CPTN transaction thoroughly and consider appropriate remedies to address the concerns raised" (see press release).

As the latest twist, Microsoft et al. have now withdrawn their request to establish a patent consortium in Germany, which can be concluded from the words "30.12.2010 (Rücknahme)" [engl. "withdrawal"] that have been added to the announced "notified merger project" on the website of the German "Bundeskartellamt".

However, it appears doubtful whether the withdrawal can really be interpreted as a consequence of the recent complaints of open source advocates. As speculated on Computerworld,
no reason was given for the withdrawal by German authorities, but it is likely voluntary as authorities would not yet have had time to investigate the proposal. CPTN Holdings still intends to purchase the patents, however.

"This is a purely procedural step necessary to provide time to allow for review of the proposed transaction," a Microsoft spokesperson said in an e-mailed statement. [...] CPTN may have withdrawn the filing in order to make tweaks that would help it pass muster with European regulators and ease critics' concerns.
In fact, Novell is being bought by Attachmate and the separate sale of Novell's patent portfolio to CPTN for $450 million was already agreed. With respect to the underlying "Patent Purchase Agreement", Andrew Updegrowe explained on the Standards blog that an Amended Proxy Statement pursuant Section 14(a) of the US Securities Exchange Act is "a comparative gold mine" for CPTN.

UPDATE: While it was first concluded that the amendment of the "notified merger project" announced by the Federal Cartel Office would show that CPTN's plans to buy Novell patents have been completely withdrawn, the community has now realised that this was only a formal move, rather than the assumed "big win for open-source advocates". As confirmed by Microsoft employees on TechFlash and ZDNet, the withdrawal was merely a formal step to allow time for the Attachmate acquisition of Novell to complete and CPTN will still buy Novell's patents.