Novell has warned that the forthcoming General Public Licence (GPL) v3 might spell the end of its partnership with Microsoft.  

"We may need to modify our relationship with Microsoft under less advantageous terms than our current agreement," Novell said in a section of its annual report that lists potential 'risk factors'.

"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 explore alternatives to remedy the conflict, but there is no assurance that we would be successful in these efforts."

Novell and Microsoft unveiled a marketing, distribution and intellectual property partnership in October.

The most controversial part of the agreement involves a pledge in which Microsoft promises not to enforce its patent portfolio against users of Novell's SuSE Linux distribution. The pledge does not apply to other Linux users.  

Microsoft has also started distributing SuSE Linux by purchasing a set of coupons that entitled users to a copy of the operating system.

The distribution and intellectual property agreements are structured in such a way that they work around patent clauses in the current version 2.0 of the GPL.

These terms have prompted the authors of the forthcoming GPLv3 to make changes designed to block the Microsoft-Novell deal.  

The GPL governs the Linux kernel as well as many components and applications bundled with the operating system, including SuSE Linux.

GPLv3 is in its final draft stage and is scheduled for release by July. It will be up to developers to decide whether their applications will migrate to the new licence, but it is generally expected that at least some GPLv2 applications will move over.

The licence automatically extends a patent grant to one user of GPLv3 software to all users of that application or component.

This would essentially force Microsoft to provide developers and users with a blanket patent licence, whereas the current deal is exclusive to Novell customers.

The usage terms discourage companies from entering into patent arrangements similar to the Novell-Microsoft deal by denying them the right to ship any GPLv3 software.

Novell has stated previously that it is committed to shipping its SuSE Linux operating as well as continuing its partnership with Microsoft. 

A spokesperson for Novell declined to comment.