Microsoft CEO says Linux "uses our intellectual property"

That didn't take too long, did it. From the article:
In comments confirming the open-source community's suspicions, Microsoft CEO Steve Ballmer Thursday declared his belief that the Linux operating system infringes on Microsoft's intellectual property.
In a question-and-answer session after his keynote speech at the Professional Association for SQL Server (PASS) conference in Seattle, Ballmer said Microsoft was motivated to sign a deal with SUSE Linux distributor Novell earlier this month because Linux “uses our intellectual property” and Microsoft wanted to “get the appropriate economic return for our shareholders from our innovation.”
“Novell pays us some money for the right to tell customers that anybody who uses SUSE Linux is appropriately covered,” Ballmer said. This “is important to us, because [otherwise] we believe every Linux customer basically has an undisclosed balance-sheet liability.”
The full transcript of the conversation is also available. I think it's a little more clear now what Microsoft's intentions were with this deal. At least Ballmer is being a little more forthcoming than in some previous situations:
“So we built a technology bridge, and we built an IP bridge and a commercial framework that supports that. Novell said to us, 'Hey, look, if you're serious about this stuff, you better help us promote Suse Linux.' To which we said, 'You know we're trying to sell Windows, that's what we do for a living! Windows, Windows, Windows, baby! We don't do Linux that way here.'
“What we agreed, which is true, is we'll continue to try to grow Windows share at the expense of Linux. That's kind of our job. But to the degree that people are going to deploy Linux, we want Suse Linux to have the highest percent share of that, because only a customer who has Suse Linux actually has paid properly for the use of intellectual property from Microsoft.”
So the question becomes, will Microsoft move forward with litigation or are they just trying to create enough uncertainty in the Linux market to hinder Linux adoption. I'd guess they may not have a solid plan yet and it could potentially go either way. One thing that might hold them back from litigation is something a bit like the mutually assured destruction of the cold war. If they really start the patent suits flying then IBM, Sun and others (who also have massive amounts of patents) could retaliate. The result would almost certainly be ugly for Microsoft. The EU, and to a lesser extent the DOJ, may also be weighing on the mind of Microsoft if they were to sue. I'm sure they don't want any more monopoly headaches than they already have.
As for Novell, I think they are now realizing that the community is strongly against them. It will be interesting to see if this has any impact on their bottom line over the next 4 quarters or so.
–jeremy
Novell, Microsoft, MSFT, Linux, GPL, Windows, Open Source