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Microsoft’s Patent Play: The Q&A

Larger forces clearly do not want me to complete my Apollo/JavaFX/Silverlight/etc piece. First there was the Fortune article that put everything else on the back burner, and even if that hadn’t happened James Andrewartha sent in a very interesting bit of news that complicates my original analysis. So that particular writeup, regrettably, is still in flight.

But in the meantime, I thought I’d weigh in with some commentary on the news that most of you have probably heard by now: Microsoft is now officially attaching numbers – but no specifics – to their patent infringement claims. As always, we’ll explore the news in Q&A fashion.

Q: First off, any disclaimers to make?
A: Yes. Certain divisions within Microsoft are RedMonk customers, and further, I’ve been engaged by Microsoft to speak at their pre-OSBC event next week, NXT. On the other side of the divide, we have many clients that could be affected – directly or indirectly – by the potential litigation that could result from these statements. Additionally, if Microsoft were to pursue litigation against the software packages in question, we at RedMonk would be a potential target, as Linux is our production operating system at the server level (and desktop for me), and OpenOffice.org is an internal standard.

Q: Can you recap the news, quickly, for those without the time to peruse the original piece?
A: Certainly. Microsoft, for the first time that I’m aware of, is asserting the specific number of its patents it feels are being violated by various FOSS projects, including Linux and OpenOffice.org. Projects that compete with Windows and Office, respectively. It further argues that this is intentional, with Microsoft’s Horacio Gutierrez quoted by Fortune as saying that this is “not a case of some accidental, unknowing infringement. There is an overwhelming number of patents being infringed.”

The reactions I’ve seen to date have been almost uniformly negative; the Digg thread was a one sided lambasting of the Redmond giant. For more on the subject, you can start with Larry Augustin‘s, Matt Asay‘s, or PJ‘s entries. If you’ve got a pro-Microsoft post, please feel free to add it as a trackback or comment. I checked Techmeme to see if I could dig one up, and this discussion didn’t make the front page.

Q: And what do they intend to do about these alleged infringements?
A: As I told a reporter earlier today, the desired outcome from a Microsoft perspective is for a better return on what they consider to be an asset – their patent portfolio. How they achieve those ends is open to question. They could license or they could litigate, and either one presents certain complications.

Q: Complications such as?
A: Well, take licensing. In Microsoft’s perfect world, they probably would seek more licenses of the Novell type; not only could these be financially rewarding, they establish precedent for royalties on code previously thought to be unencumbered requires. Unfortunately for Microsoft, the next version of the license that currently governs Linux, the GPLv3, is expressly designed to prevent such agreements. While it’s yet undecided whether or not Linux will in fact move to the next version, it’s certainly more likely today than it was six months ago. So cross-licensing appears to be a complicated path, at best.

Litigation, for that matter, would seem to be no less so. The question is, who to litigate? Suing a Linux user like RedMonk, as an example, isn’t liable to provide Microsoft with the same returns that suing, say, Red Hat would. But many of the potential vendor targets are shielded in part by the Open Invention Network (OIN), which pools patents from multiple parties for mutual defense.

It may be instead, that Google’s Chris DiBona is correct, and that Microsoft will ultimately pick a relatively undefended target and litigate successfully. But the fallout from that practice, as SCO discovered to its misfortune, would be both swift and severe. Litigation is rarely a sustainable revenue stream.

Q: Would Microsoft really go down the same path as the RIAA, and sue customers?
A: Fortune’s Roger Parloff asked just that question:

If push comes to shove, would Microsoft sue its customers for royalties, the way the record industry has?

“That’s not a bridge we’ve crossed,” says CEO [Steve] Ballmer, “and not a bridge I want to cross today on the phone with you.”

It’s definitely not a yes, but it’s definitely not a “no” either. It’s a carefully calculated statement designed to inject fear, IMO; fear that Microsoft would hope to exploit to its benefit.

One interesting bit of speculation: Google’s known to be a substantial consumer of Linux, and while it’s famously secretive about its infrastructure, that portion is well known. Would Microsoft be interested in litigating against Google for its use of infringing code? I’m sure they’d like to, as there’s no love lost between the firms, but it’s hardly an ill-defended entity at this point.

Q: Why now? Why is Microsoft choosing to get slightly more specific with its claims at this particular point in time?
A: An excellent question, and not one that I have an answer to. I’ve heard speculation today – from Dalibor Topic on #redmonk in particular – that Dell’s decision to engage with Ubuntu rather than its preferred partner, Novell, might have added impetus to the decision. It’s also reasonable to speculate – as the Fortune article does – that the impending release of the GPLv3 played a role in forcing its hand. Particularly because that license is specifically called out in the Microsoft missive I received informing me of the news. Either way, it’s upon us.

Q: What about their claims – is there precedence for them?
A: Certainly. The OSRM, in fact, quoted an even higher number of potentially infringing patents nearly three years ago. And Microsoft has, more directly, insinuated on multiple occasions that its patents were being violated; one need look no further than Ballmer’s statements following the Novell deal. Among them was this bit:

“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.”

What Microsoft has never done was be specific with respect to which patents specifically they felt were being violated.

Q: How do customers feel about their claims?
A: I have yet to see any reactions to yesterday’s news, but the reactions I fielded to the Ballmer soundbite above were very anti-Microsoft. ComputerWorld’s Eric Lai quoted Citistreet’s Barry Strasnick as follows:

“Like many IT executives, I took great offense to Ballmer’s comments,” Strasnick wrote in an e-mail. CitiStreet uses Red Hat Linux widely in its data centers. “If Microsoft really thinks there is some code in Linux that violates their patents, they should publish those lines of codes immediately instead of just posturing in the press. [Fear, uncertainty and doubt] may have worked for IBM in the 1970s (some of us are old enough to have been around then), but not today.”

How they’ll react to the latest round should be interesting.

Q: How so?
A: Well, Microsoft’s been clever in that it’s provided just enough specifics – numbers per project – to give the appearance of credibility, while providing virtually nothing of substance on which to base a defense. As a result, my expectation is that this campaign is likely to be more effective than Ballmer’s previous statements, if only because it’s more specific.

Q: Do you think that their claims have merit?
A: Some of them? Almost certainly. But it’s just as certain that Microsoft is infringing patents held by others – some of those held by the OIN, in fact. The question is not whether patents are being infringed upon, IMO, it’s whether the patents themselves were legitimate in the first place.

Q: You’re not a software patent believer, then?
A: I am not. Or more accurately, I’m not a believer in the current system that grants them. Is it possible that there are true innovations that may deserve the protection a patent affords them? Probably. But the system has yet to be invented, in my opinion, that can accurately distinguish the fraction of a percent of wheat from the overwhelming volume of chaff. As a result, I don’t see any other supportable conclusion but that the patent system is fundamentally broken.

Interestingly, the Supreme Court seems to agree with me, at least to an extent; as Justice Anthony Kennedy put it, “Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress.” Couldn’t have said it better myself, which is probably why I’m not a Supreme Court Judge. That, and the lack of a law degree.

Q: So you believe that Microsoft’s campaign will ultimately be ineffective?
A: It depends on the timeframe you choose to measure it against. Irrespective of mine or others’ feelings on the legitimacy of the patent system, it remains in place and will for the foreseeable future – even if its importance is gradually diminished. Therefore Microsoft’s current assertions do carry weight, and in the short term are likely to negatively impact open source competitors. As much as I dislike and disrespect the practice, smear campaigns can be tactically effective, as I was recently reminded: just look at politics. While I do believe that there are different between politics and technology, the objection is sustained. That said, I believe the long term implications of this approach outweigh the potential tactical benefits. It would behoove those citing the political example to remember that this is not one disliked politician smearing another; this is Microsoft – the richest software company in the industry – overtly threatening a variety of open source projects. Big difference. In the long term, I do not expect this to have the effect that Microsoft intends it to.

Q: How does the picture change over the longer term?
A: Microsoft has spent the past few years rehabilitating – at great expense and great effort – a highly negative public image. One that, importantly, did not terribly impact its ability to do business, but one that left the firm with very few defenders and advocates. It was, in many respects, the least loved firm in the industry.

While the Microsoft of the past year or so was certainly not beloved, it had gone some distance to changing the minds of many, persuading even some ardent critics that they’d learned a great deal from their past behaviors and emerged as a more responsible corporate player. Agree or disagree, articles describing the new “kinder, gentler” Microsoft abounded.

And then there was yesterday. Depending on how Microsoft proceeds from the statements made to Fortune, I could see virtually all of that hard won goodwill evaporating overnight. Whether their business is as immune to the negative sentiment as it was in the past remains to be seen, but I know that if I intended to compete with social movements – as Microsoft obviously intends to – I’d be trying to make friends, not enemies.

Q: What would you recommend that Microsoft do instead?
A: Be specific about the patents in question. Let’s see them, or let’s move on. The FUD tactic will only work for so long. I find it very difficult to believe that Microsoft would sit idly by as Linux grew from toy project intro significant threat, “choosing” not to employ such weapons as it had at its disposal. But I’m also very cognizant of the fact that Microsoft’s legal team is both intelligent and detail oriented.

Eventually, something’s got to give; in the meantime the FUD isn’t going to do any of us much good.

Categories: Open Source.

  • http://aqualung.typepad.com/aqualung Ric

    I hear it from Hugh (www.gapingvoid.com), I hear it from Redmonk, and I see it all around: there are good people working for Microsoft. Now even Hugh is having second thoughts … how can Microsoft ever rehabilitate while Bill G and Steve B are there? Their model of the world is already b0rked, but they still can’t see it, and they completely invalidate all the ‘Blue Monster’ and Kim Cameron/Infocard work in a heartbeat.

  • Jim

    haven’t they already threatened their customers? Like Samsung and Hitachi?

    “Some customers actually entered into direct patent licenses with Microsoft at that point, Smith says, including some “major brand-name companies” in financial services, health care, insurance and information technology. (He says they don’t want to be identified, presumably because they fear angering the FOSS community.) ”

    what’s the difference between threatening and suing?

  • http://robilad.livejournal.com Dalibor Topic

    I don’t think there is anything Microsoft can do instead. They’ve crossed the point beyond return. They’ve turned into the new SCO, and started emulating SCO’s business model of threatening their own customers.

    That act turns Microsoft’s existence into a litigation problem for its own customers. And that in turn means that Ballmer has just turned Microsoft into game, globally, and stripped it of any allies, privileges or basic rights.

    The fact that Microsoft sits on a huge wad of cash also adds to the attraction of a counterattack: Microsoft violates so much intellectual property of other companies, that it is regularly forced to pay out billions as compensation. The fact that Microsoft is not confident enough to sue is a sure sign that they are even less confident to defend themselves against hundreds of simultaneous lawsuits in different jurisdictions globally.

    What better time, to put Microsoft out of its misery, than now?

  • http://blogs.adobe.com/shebanation Andrew Shebanow

    Great insights, thanks. What was the news James Andrewartha sent in, though?

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  • http://spyderous.livejournal.com/ Donnie Berkholz

    Linux kernel will never move to GPLv3. Each contributor retains copyright, and the statement in much of the code does not contain the “or later” required to automatically migrate. So a switch to v3 would require tracking down everyone who’s ever contributed, or rewriting what they did as well as trying to figure out what works were derived from what they did and rewriting those too.

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  • http://tieguy.org/blog/ Luis Villa

    Couldn’t have said it better myself, which is probably why I’m not a Supreme Court Judge.

    Kennedy is… not the most clear of Supreme Court judges. In fact, I dare say several of his decisions would be better off being written in patented O’Grady Q&A format ;)

    And actually, historically, there have been quite a few Supreme Court judges who were not lawyers. None since shortly before WWII, though, if I remember right.

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