A New Patent Troll on the Scene? (NOVL, MSFT, AAPL, ORCL, EMC, GOOG)

When Novell, Inc. (NASDAQ: NOVL) agreed to be acquired by privately held Attachmate Corp. in late November, part of the deal included the concurrent sale of some of Novell’s intellectual property to CPTN Holdings LLC for $450 million. CPTN was identified in Novell’s press release as a “consortium of technology companies organized by Microsoft Corporation” (NASDAQ: MSFT). The other members of the consortium are Apple Inc. (NASDAQ: AAPL), Oracle Corp. (NASDAQ: ORCL), and EMC Corp. (NYSE: EMC).

So far, that’s about all anyone knows for sure about the mysterious CPTN Holdings. The most obvious question is whether or not CPTN plans to make it easier or more difficult to license the 882 patents once held by Novell.

One possible reason for the purchase could be that the four companies want to assure themselves that they hold the legal rights to components of their own technologies that they either licensed or should have licensed from Novell. Without getting into the alphabet soup of computer software development, it is probably safe to say pending lawsuits among CPTN companies and Novell will disappear, and that companies outside the consortium face some pretty formidable opposition should they be the least bit vulnerable to a patent infringement charge.

The target here has to be Google Inc. (NASDAQ: GOOG). Oracle has already filed suit against Google for infringing intellectual property related to Java that Oracle acquired with its purchase of Sun Microsystems. Google is already the main target of patent infringement suits over its Android smartphone operating system, and now that the company has released a preview version of its Chrome operating system, the target painted on its back just got bigger.

Microsoft, especially, and Apple could feel the impact of Google’s cloud-based Chrome OS. Early reviews of Chrome are lukewarm, to be sure, and many doubt that the OS will ever amount to much. But if you’re Microsoft, you can’t be too careful.

Oracle’s lawsuit against Google goes right to the heart of Android, seeking to enjoin Google from distributing the OS and destroying all copies that are already out there. On top of that, Oracle wants statutory and treble damages. Google has to fight this lawsuit, but may choose to pony up some cash if the CPTN group gets lawyered up.

At the very least, the CPTN group’s purchase will save them from potential lawsuits related to the 882 patents and it gives them the right to enforce their own rights should they choose to do so. A good guess is that they will choose to do so, and very aggressively too.

Paul Ausick