Linux software vendor Novell Inc. of Waltham is expanding its alliance with Microsoft Corp. into China, in a bid to encourage Chinese companies to start paying for the software they use to run their businesses.

A small Chinese high-tech firm is suing Microsoft Corp because it says the software giant has stolen its creation that allows Internet users to type Chinese characters, but Microsoft countered the claim on Friday.

Almost 10 months ago, I wrote the post, "Dear China, Microsoft Wants to Charge You for Air Too" and now Novell follows up with its own plan to charge China for air. The Chinese assume that since Linux is open source that it means that it is less capitalistic and less money driven.

I noticed a comment thread on Groklaw about Moonlight, with a link to the license terms on Microsoft's website. They call it Covenant to Downstream Recipients of Moonlight - Microsoft & Novell Interoperability Collaboration . A comment by Microsoft's Brian Goldfarb on Dana Blankenhorn's article about Novell being a lead pony for Silverlight started the discussion originally.

Novell Inc. and Microsoft Corp., trying to expand the reach of their unusual alliance, say they plan to put a bigger emphasis on the Chinese market. The companies say they will make an extra investment to sell more support subscriptions for Novell's SUSE Linux Enterprise Server operating system in China.

On the back of defending the agreement this week, Novell did as promised and published details of its landmark November 2006 Linux partnership agreements with Microsoft.

Microsoft has extended its covenant to not sue users of Linux-based products from Novell to all GPL v3 users as soon as GPL v3 code is integrated into SUSE Linux Enterprise. This means that the patent protection Microsoft extends to Novell customers now covers every customer who uses any Linux-based software that Novell distributes under GPL v3.

Brace yourself, Sun fans. In Exhibit 60, SCO's Response to Novell's Inc.'s Interrogatory 15, dated April 6, 2007, paragraph 4, we learn that Microsoft and Sun paid for licenses that included a covenant not to sue, UnixWare rights, and incidental rights to the older UNIX System V source code. Sun paid ultimately $10 million and Microsoft paid $16.75 million.

Novell has signed a cooperation agreement with China Standard Software Company (CS2C), the leading Linux firm in China. The two companies will promote the development and adoption of Linux in the country, and combine resources on distribution of technology and services for the Chinese market.