The fear is that they will use the deal with Novell to argue that Novell also believes that Linux violates Microsoft's patents (whether it does or not and, if so, whether they are legit or not).
Therefore, they would tell the judge, only Novell has a legal right to distribute Linux as they are the only ones who have a deal with Microsoft. If the judge buys that, other Linux vendors (like RedHat) could be shut down and possibly OSS developers in the US. If it worked, Microsoft would narrow the Linux competition down to just Novell and then, well, goodbye Novell.
Will it happen? I don't know, but the idea is hardly paranoid given Microsoft's anti-competitive past, today's overly-litigious society and the fact that, most likely, every piece of software violates some patent.