In comments to http://www.groklaw.net/article.php?story=20061107194320461 (Details of Novell-MS Pact - The SEC filing)
------------ The SEC should investigate the Novell-MS agreements. For example, Novell has failed to mention several massive Risks in recent SEC filings. The agreements will almost certainly lead to the destruction of Novell's entire Linux business and, quite possibly, to the destruction or bankruptcy of Novell. Let me explain: 1. The agreements violate the GPL, on which most of Novell's Linux-related business is based, according to at least the following reasons and arguments: a. The Novell-MS agreements include (de facto and de jure) a "covenant not to sue" and therefore, calling it more plainly, a license. b. With this license, Novell imposes additional license conditions on the GPL software, at least through contracts with its customers. This is a clear violation of the GPL. (Section 6: "You may not impose any further restrictions on the recipients' exercise of the rights granted herein.") c. The GPL clearly forbids a patent-related deal as was made in the agreements. Read section 7 and the patent-related paragraph in the preamble of the GPL. That's a further violation of the GPL. d. The agreement only protects "end-user customers". No such thing as an "end-user" exists for Linux, because anyone is usually allowed to distribute the software further. The agreement means that a Novell "end-user customer" is unable to provide the protection to others when he distributes the software further. So he is unable to grant to others all the rights which he himself received. Another violation of the GPL. (The preamble clearly states: "For example, if you distribute copies of such a program, whether gratis or for a fee, you must give the recipients all the rights that you have.") End-user customers aren't able to fulfill their obligations. Novell is thereby itself breaking the GPL and telling others to break it too. e. Eben Moglen clearly stated that the agreements violate the GPL. He is the drafter of the GPL, no less, so his opinion is important. Novell has been aware of his statements, but has failed to disclose his concerns in SEC filings, especially the 8K. And Bruce Perens made similar statements (of which Novell has been aware) and certainly is someone who shouldn't be ignored... So Novell knew that at least several "important" people most strongly disagree with their interpretation of the GPL and with the pact. f. Novell violates the GPL and therefore loses all right to distribute or modify the software. Novell's Linux business is gone. 2. The Novell-MS pact looks like an extortion scheme or protection racket. It basically says: "Buy products from us, not from our competitors, or we'll sue you out of existence!" Most companies will have to cave in to such a threat because they can't spend several years and millions of dollars in litigation. Microsoft and Novell are too dominant and seem to abuse their dominant position for such threats. The scheme is substantially similar to the SCOsource license. The only difference is the topic: patents resp. copyrights. Extortion schemes are clearly illegal? Novell is gambling its reputation and its entire business. 3. The pact is further a violation of antitrust law. Microsoft is a convicted monopolist which is known to try to extend its existing monopoly into other markets by pretty much any means, e.g. by this pact with Novell. Novell therefore is conspiring with a monopolist in order to make the monopoly position stronger and to profit from it. That's certainly illegal? 4. Novell must be aware that most of its customers will be disgusted by its activities and will choose different distributions in the (rather near) future. For example, Novell is legitimizing Microsoft's claims that Linux actually violates some patents, doesn't disclose _which_ patents are allegedly at issue and thereby helps spreading FUD. This means that the "community" around Novell SuSE Linux will materially shrink or completely vanish. As a result, commercial customers will lose interest too. Another reason why Novell's Linux business will vanish, another undisclosed Risk. 5. Novell tried (and still tries) to hide the big legal issues which are caused by the pact and to make it all seem valid and harmless in public statements. This is probably some kind of deception on the investing public and therefore some kind of shareholder fraud? 6. Novell's 8K SEC filing is at odds with other public statements, as PJ points out in the article. Therefore, Novell presumably tries to mislead or deceive the SEC or the investing public and to circumvent the governmental control which is exerted by the SEC. 7. Novell will likely be sued by Linux copyright holders (esp. companies) for violating their copyrights and the GPL. Novell will have to pay them lots of money, at the very least. Another undisclosed Risk. 8. The Novell-MS pact is probably related to the SCO litigation, at least from Microsoft's standpoint. The pact therefore seems to be intended as an interference with court proceedings or a plain obstruction of justice. Probably illegal? Let's see how fast Novell drops out of the SCO lawsuit as an "inofficial" result of the pact. 9. Microsoft is probably barred from actively asserting any patents against anyone, simply due to antitrust law. If it ever uses patents actively to harm its main competition (Linux), it would get in trouble. Therefore, Novell has paid millions of dollars for absolutely nothing. Lack of due diligence. Waste of assets. 10. The agreements seem to imply two admissions (otherwise the pact wouldn't make sense for Novell and Microsoft): a. Novell admits that it has violated Microsoft's patents and thereby accuses itself of actionable wrongdoing. Such wrongdoing is certainly a Risk, e.g. because (i) it might involve third parties to which Novell is still liable; and (ii) the current pact might not yet have covered all of Microsoft's claims/demands, and Novell might still have to pay several further hundred million dollars to Microsoft. b. Microsoft admits that it has violated Novell's patents. This implies that Novell has failed to cash in (including interest for several years) for this abuse of its Intellectual Property(tm) earlier and has thereby willfully, materially harmed the company in the past. Shareholder lawsuit, anyone? Someone more knowledgable please fill in the blanks (if any:-) and send a formal SEC complaint. I'm not familiar with this, so I could only provide the argumentation. You may use this comment text as you like, I'm putting it into the Public Domain. ------------ LOL. regards, alexander. _______________________________________________ gnu-misc-discuss mailing list gnu-misc-discuss@gnu.org http://lists.gnu.org/mailman/listinfo/gnu-misc-discuss
