COMMERCIAL NEWS

New York, N.Y. — Never underestimate Microsoft Corp., especially when it comes to anything involving Linux. Take its recent $135 million bailout of struggling Canadian software maker Corel Corp.

While many industry watchers speculated that Microsoft might try to strong-arm Corel into dropping Linux, it now looks like Microsoft has agreed to leave Corel an opening to port Microsoft’s .Net framework and services to Linux. At least that’s what Corel’s Oct. 11 8-K filing with the Securities and Exchange Commission seems to say.

And there’s more: Some industry pundits likened the Microsoft investment in Corel to other investments Microsoft made a few years ago in both Apple Computer Corp. and Inprise Corp. – in terms of providing quick ends to pending lawsuits by those two companies against Microsoft.

But, according to the SEC document, it was Microsoft that was poised to sue Corel for patent infringement. The three patents in question involved Microsoft’s equation editor, table formatter, and spelling and grammar checker.

“Microsoft covenants to Corel that neither Microsoft nor any of its Affiliates shall sue Corel based on any claim that current or past versions of Corel Office Professional or Corel WordPerfect Suite (and successor Corel WordPerfect office productivity products) (collectively, the “Covenanted Products”) infringe Microsoft’s U.S. Patents 5,510,980; 5,272,628; 5,287,514; and 5,437,036,” specified the Corel SEC filing.

Microsoft did not respond to a requests for additional information on pending lawsuits between the two companies. A Corel spokeswoman emphasized that Microsoft’s patent-infringement claims were “pending” and had not been filed officially. She said that was the only legal matter pending between the two companies that was settled as a result of Microsoft’s investment.

When it announced the Corel deal last week, Microsoft said the primary reason for taking a 25 percent stake in Corel was its desire to gain the backing of a software partner of Corel’s stature for its .Net initiative.

For its part, Corel said it would use the money to make its existing applications compliant with Microsoft’s .Net framework. The .Net framework is the set of class libraries, common language runtime, and updated version of Microsoft’s Active Server Pages, which will serve as the underpinning to Microsoft’s next generation of operating system, application, and tool products.

Corel also committed to supporting the related .Net services. According to the latest SEC filing, these services include web services that support the XML format defined by the W3C, the Simple Object Access Protocol (SOAP) as defined by the W3C, the Web Services Description Language (WSDL), the Microsoft business orchestration language known as “XLANG,” the SOAP discovery standard (DISCO), and the emerging Universal Description, Discovery, and Integration (or UDDI) standard.

Last week, Corel CEO Derek Burney also hinted that Corel might find a way to bring Linux to .Net, although he declined to elaborate.

However, according to the SEC document, that’s exactly what Corel is going to do. “Corel hereby grants Microsoft an option for Corel to Port some portion or all of the .NET Framework from the Windows Platform to the Linux Platform (the ‘Port Project’),” read the document.

Microsoft has three years to notify Corel of its interest, according to terms outlined in the technology agreement. If Microsoft is interested in Corel porting the .Net framework and services to Linux, Corel has committed to assigning at least 20 full-time developers and at least 10 full-time testers to the Port Project.

Microsoft will not have to pay Corel for porting .Net to Linux, and Microsoft will own the resulting “Port Deliverables,” according to the terms of the technology agreement. Finally, Microsoft will have the right to license – and collect royalties from – any third parties licensing these deliverables, including Corel.

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