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Two key points:

* A lot of the good stuff about the partnership was redacted, opening more questions.
* The third version of the General Public License seems to have some teeth–at least enough to worry Novell a bit.

And wnovelllogo.pnghile it’s suspicious that Novell dropped these filings late Friday before a long weekend, I’ll give the company a pass. The filings were ridiculously late due to stock options backdating so why make the Securities and Exchange Commission wait? Just get the filings over with already–it’s not like we didn’t know they were coming.

Now let’s get to the money shot: Novell sees GPLv3 as a threat to its pact with Microsoft to resell SUSE Linux certificates. In the annual report’s risk factors section, Novell notes that if “the Free Software Foundation releases a new version of the GNU General Public License with certain currently proposed terms, our business may suffer harm.”

To a degree that risk is known already. The FSF has made it clear the Microsoft-Novell deal is a target. Meanwhile, GPLv3 isn’t a matter of “if” as much as it is “when” it becomes more than a draft.

The big question is how will the GPL will affect Novell’s gravy train–Microsoft. The big threat comes if GPLv3 impacts the patent agreement between Microsoft and Novell. Here’s what Novell had to say:

On November 2, 2006, we announced a new relationship with Microsoft. Among other things, Microsoft agreed to make covenants with our customers not to assert its patents against them. Microsoft also purchased coupons that it can distribute to customers who can in turn redeem them for subscriptions to SUSE Linux Enterprise Server. The FSF criticized our deal with Microsoft because it only provides patent protections for our customers rather than for all licensees of GPL software, and on March 28, 2007, the FSF released a new draft of GPLv3, known as “Discussion Draft 3,” that includes provisions intended to negate at least part of our Microsoft agreement.

Discussion Draft 3 includes a term intended to require Microsoft to make the same patent covenants that our customers receive to all recipients of the GPLv3 software included in our products. It also includes a license condition intended to preclude companies from entering into patent arrangements such as our agreement with Microsoft by prohibiting any company that has entered into such an arrangement from distributing GPLv3 code. This license condition does not apply to arrangements entered before March 28, 2007, so as currently proposed it would not apply to our agreement with Microsoft; however, the FSF specifically indicated that this “grandfathering” condition is tentative and may be dropped depending on feedback the FSF receives.

If the final version of GPLv3 contains terms or conditions that interfere with our agreement with Microsoft or our ability to distribute GPLv3 code, Microsoft may cease to distribute SUSE Linux coupons in order to avoid the extension of its patent covenants to a broader range of GPLv3 software recipients, we may need to modify our relationship with Microsoft under less advantageous terms than our current agreement, or we may be restricted in our ability to include GPLv3 code in our products, any of which could adversely affect our business and our operating results. In such a case, we would likely explore alternatives to remedy the conflict, but there is no assurance that we would be successful in these efforts.

The takeaways from that passage:

* Novell may not get the payola it’s getting accustomed to from Microsoft;
* It’s clear that Microsoft’s patent statements are really about calling a GPLv3 truce;
* Novell has to be worried since I’d argue that the Microsoft pact is one of the big reasons SUSE Linux is getting traction in the enterprise.