By Steve Ragan Jul 2, 2007, 15:36 GMT
There has been a tremendous amount of talk about the Microsoft patent deals, recently. Most of the talks against the deals charge the companies who signed them as being small and meaningless. A false charge when looking at the larger picture, as most of the companies who signed enjoy a decent user base in the business world for as small as they are, Linspire and Xandros are two such examples. The main charge is that they gave in to the fear of lawsuits that might appear form Microsoft, something Microsoft is attempting to fight with a recent speech given by Marshall Phelps last Thursday.
Call Microsoft crazy, call them greedy, or call them evil there is one thing you can say. With Phelps onboard as deputy council for Microsoft, they know patents. Phelps worked for IBM for over twenty years before coming to Redmond, Washington, based Microsoft to spread panic over patent litigation.
Remember, IBM is the company who told Sun during a patent dispute, “OK, maybe you don't infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?” [Forbes.com 6-24-2002] In 2002, Phelps was at IBM, while not making that comment, he was apart of the overall strategy development. In the Forbes quote, it was another lawyer speaking for IBM at the time. However, fast-forward to another Forbes article and you see the same strategy.
In May, Microsoft attorney Brad Smith and Licensing Chief Horacio Gutierrez said that free and open source software (FOSS) violated over two hundred Microsoft patents, and discussed how the company will get FOSS users to pay royalties. Related to the Fortune article in a separate interview Steve Ballmer preempted the idea of royalties with one statement. “We live in a world where we honor, and support the honoring of, intellectual property,” he said. FIOSS users, “play by the same rules as the rest of the business. What's fair is fair.”
Fortune 500 companies use some form of FOSS on their network environments, because they are cost effective, and in some cases give the same ease of use and productivity that their licensed counterparts from Microsoft offer. Microsoft claims that this is possible only because of the patent violations. “This is not a case of some accidental, unknowing infringement. There are an overwhelming number of patents being infringed upon,” Gutierrez said.
After all was said and done, and the article collected a firestorm of opinions and comments the plan moved forward. Microsoft signed several companies to cross license patent deals. The deals are similar to the ones offered to Novell and offer protection against any future legal actions regarding patent infringement. In the past twelve months, Microsoft has announced similar agreements with companies such as Fuji Xerox Co. Ltd., NEC Corp., Nortel Networks, Xandros, Samsung, Linspire, and Seiko Epson Corp.
Last week, in a keynote address at Red Herring East, Phelps said that patent licensing deals are a way for companies to share rights and revenue over patented technology.
“For those of you in VC, this is going to be a radical departure. We used to define competitive advantage as 'I've got and you don't.' Or 'You've got it, but I got better.' Well, today it's 'You got it and I got it, but I make money when you use it,” said Phelps. The comment was made as an explanation as to why companies are shifting to licensing their patented technology. “We are not in the licensing for money. Most people look at IBM and say why can't we do that? Well, I know how IBM did it and most companies will never do that. Rather than have it be the business, make it serve the business,” said Phelps later in his address.
No matter how Microsoft spins it, or attempts to spin it most of the FOSS community still sees the deals and attempts from Microsoft as extortion, “pay us or we sue” is the bottom line, and it works apparently because of the growing list of deals signed.
“Allegations of “infringement of unspecified patents” carry no weight whatsoever. We don’t think they have any legal merit, and they are no incentive for us to work with Microsoft on any of the wonderful things we could do together. A promise by Microsoft not to sue for infringement of unspecified patents has no value at all and is not worth paying for. It does not protect users from the real risk of a patent suit from a pure-IP-holder (Microsoft itself is regularly found to violate such patents and regularly settles such suits). People who pay protection money for that promise are likely living in a false sense of security,” Mark Shuttleworth, Ubuntu founder said.
Apparently, Shuttleworth is not alone, in regards to Intellectual Property (IP) Mandriva CEO Francois Bancilhon explained that his company is no fan of the software patent system as it stands. Considering the current patent system to be “counter productive for the industry as a whole” mirroring several others in the FOSS community. “We also believe what we see, and up to now, there has been absolutely no hard evidence from any of the FUD propagators that Linux and open source applications are in breach of any patents. So we think that, as in any democracy, people are innocent unless proven guilty and we can continue working in good faith. So we don’t believe it is necessary for us to get protection from Microsoft to do our job or to pay protection money to anyone.”
Mandriva is the latest open source company to draw a line in the sand, there will be no patent deal with Microsoft. Red Hat issued a statement last November, where it called deals like those that were signed with Novell and innovation tax. Earlier this month, they stood behind that statement when they joined Ubuntu with regard to refusing to sign with Microsoft.
“An innovation tax is unthinkable,” Red Hat said. “Free and open-source software provide the necessary environment for true innovation. Innovation without fear or threat. Activities that isolate communities or limit upstream adoption will inevitably stifle innovation.”
As the war of words continues and the lines are drawn the new version of the GPL was released last Friday. The new draft, will allow Novell to use GPLv3 rather then prevent it from doing so as previously thought. One twist is that once Novell adopts GPLv3, Microsoft will be subject to the terms because of the SUSE Linux Enterprise Server subscription coupons it gave to joint customers.
The Free Software Foundation the non-profit behind the GPL expects that adoption of the new license will take off. FSF founder Richard Stallman, wrote an essay last month on why developers should upgrade and use GPLv3. One of the perks for using the new GPL is broad patent lawsuit protection from Microsoft for open source users, which is granted under GPLv3. The final text of the GPLv3 was released June 29th.
Your Talkback on this Story