OSI, FSF Want Inquiry of Microsoft Consortium Deal on Novell

Protesting the secrecy of the deal, the Open Source Initiative and the Free Software Foundation have jointly asked the U.S. Department of Justice to investigate the purchase of more than 800 patents by a Microsoft-led consortium, CTPN Holdings.

The two non-profit organizations “are concerned that CPTN represents a potential broadside not against any particular product in the market today, but against one of the only viable sources of competition for these companies in software today,” that of open source and free software, wrote Michael Tiemann president of Open Source Initiative, in a letter to the DOJ.

CPTN Holdings is buying the Novell patents for US$450 million in cash. The sale is concurrent with the pending Attachmate acquisition of Novell, announced in November. In addition to Microsoft, Apple, Oracle and EMC are involved with CPTN.

OSI and FSF argue that there is not enough public information surrounding the deal, and that, given the influence of the companies, such secrecy could hide “nefarious intentions,” the statement charges.

“Given the potential for collusion between these competitors to reduce competition amongst them and to harm competition that exists in the marketplace today, competition would be better served by the Department of Justice thoroughly investigating the facts and evidence concerning this transaction, rather than giving them the benefit of the commercial doubt,” the statement reads.

Earlier this week, the European Union expressed no opposition to the deal. OSI and the FSF had also filed a request with the German Federal Cartel Office last month.

It is worth noting that CPTN is not alone in its interest in purchasing the patents.

In a Jan. 14 filing with the U.S. Securities & Exchange Commission, Novell revealed that another concern, which it referred to as “Party E,” is interested in the patents.

“On January 11, 2011, representatives of Party E contacted one of our executive officers who reported that such representatives had been following recent media reports of our pending transactions and were prepared to discuss ‘reasonable, competitive terms’ of a transaction with us,” the filing states. “On January 13, 2011, a representative of Party E clarified that their interest is in a transaction related to an acquisition of the patents and patent applications being sold pursuant to the Patent Purchase Agreement, ‘and maybe more.'”

The intellectual property in question relates “primarily to enterprise-level computer systems management software, enterprise-level file management and collaboration software in addition to patents relevant to our identity and security management business,” Novell revealed in the Jan. 14 filing. But no specific products have been named.

With Party E’s identity currently unknown, it’s not clear whether OSI and its peers would hold equally grave concerns about it purchasing the patents.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab’s e-mail address is Joab_Jackson@idg.com