A software cartel in the making?

Open source software advocates have requested that Germany’s industry regulator investigate the purchase of patents currently owned by Novell, a multinational with assets of over €1.5 billion that specialises in operating systems, data security and general business software. Novell holds a large number of UNIX patents, and owns SuSE Linux Enterprise, a Linux distribution aimed primarily at the business sector.

What concerns the Open Source Initiative is the €350 million sale by Novell of 882 patents to a consortium known as CPTN Holdings, which is led by Microsoft, and includes computing giants Apple, Oracle and EMC. According to the OSI, control of the patents, which cover networking, virtualisation and cloud computing, could be used to stifle open source software adoption in the private and public corporate world, academia and non-profit organisations.

Readers unfamiliar with computer networking technologies should note that the Internet is based in large part on servers that run UNIX-type operating systems and other software, much of which is open source. As for Internet service provision, Google and Facebook depend on open source software, and search and social networking are areas of great interest to Microsoft.

As for Linux on the desktop, its current market share may be tiny in the domestic sector, but is increasing steadily in the corporate world. The use of Linux and other open source software looks set to grow in the public sector especially, what with state spending cutbacks, and the mandating by some central governments and other authorities of open document standards.

In its letter to the Bundeskartellamt, the OSI provided a helpful and eloquent definition of open source software…

“Open source software is not ‘non-commercial’ – rather, it is
software where revenues are generated from the delivery of value around
the software rather than by controlling access to the software. This
switch away from artificial scarcity as the only means for monetization
liberates developers from many places to synchronise overlapping
interests and collaborate around a open source code ‘commons’ to sustain
the wealth-creating vehicle they jointly enjoy.”

This is in sharp contrast to the Microsoft way of doing things, though it has until now been Apple’s software philosophy, at least in part. Which makes it all the more surprising to see Apple collaborating with its principal commercial foe.

While one should be careful about viewing this as a battle between brave little Linux and the corporate bogeyman, it doesn’t help CPTN’s case that the consortium has been unreasonably secretive about its membership, and the business intentions of this strange alliance of normally fiercely competing firms. The claim of an anonymous CPTN insider that the patent grab is no more than a form of “cheap defensive insurance” is not entirely convincing.

There is legitimate cause for concern about the CPTN development, and the OSI is right to be worried. It is certainly in the public interest for market regulators to look into CPTN’s acquisition of the Novell software patents.