Text 17870, 178 rader
Skriven 2007-05-13 22:58:02 av mike (1:379/45)
Ärende: It's a shame that Microsoft can't compete in the marketplace...
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From: mike <mike@barkto.com>

Microsoft was the first to complain when companies used the courts instead of
the marketplace to compete.   Now, it appears, that Microsoft
is finding those same courts to be useful.


http://money.cnn.com/magazines/fortune/fortune_archive/2007/05/28/100033867/

===
Microsoft takes on the free world

(Fortune Magazine) -- Free software is great, and corporate America loves it.
It's often high-quality stuff that can be downloaded free off the Internet and
then copied at will. It's versatile - it can be customized to perform almost
any large-scale computing task - and it's blessedly crash-resistant.

A broad community of developers, from individuals to large companies like IBM,
is constantly working to improve it and introduce new features. No wonder the
business world has embraced it so enthusiastically: More than half the
companies in the Fortune 500 are thought to be using the free operating system
Linux in their data centers.

But now there's a shadow hanging over Linux and other free software, and it's
being cast by Microsoft (Charts, Fortune 500). The Redmond behemoth asserts
that one reason free software is of such high quality is that it violates more
than 200 of Microsoft's patents. And as a mature company facing unfavorable
market trends and fearsome competitors like Google (Charts, Fortune 500),
Microsoft is pulling no punches: It wants royalties. If the company gets its
way, free software won't be free anymore.

The conflict pits Microsoft and its dogged CEO, Steve Ballmer, against the
"free world" - people who believe software is pure knowledge. The leader of
that faction is Richard Matthew Stallman, a computer visionary with the look
and the intransigence of an Old Testament prophet.

]Caught in the middle are big corporate Linux users like Wal-Mart, AIG, and
Goldman Sachs. Free-worlders say that if Microsoft prevails, the whole quirky
ecosystem that produced Linux and other free and open-source software (FOSS)
will be undermined.

Microsoft counters that it is a matter of principle. "We live in a world where
we honor, and support the honoring of, intellectual property," says Ballmer in
an interview. FOSS patrons are going to have to "play by the same rules as the
rest of the business," he insists. "What's fair is fair."

Microsoft General Counsel Brad Smith and licensing chief Horacio Gutierrez sat
down with Fortune recently to map out their strategy for getting FOSS users to
pay royalties. Revealing the precise figure for the first time, they state that
FOSS infringes on no fewer than 235 Microsoft patents.

It's a breathtaking number. (By comparison, for instance, Verizon's (Charts,
Fortune 500) patent suit against Vonage (Charts), which now threatens to
bankrupt the latter, was based on just seven patents, of which only three were
found to be infringing.) "This is not a case of some accidental, unknowing
infringement," Gutierrez asserts. "There is an overwhelming number of patents
being infringed."

The free world appears to be uncowed by Microsoft's claims. Its master legal
strategist is Eben Moglen, longtime counsel to the Free Software Foundation and
the head of the Software Freedom Law Center, which counsels FOSS projects on
how to protect themselves from patent aggression. (He's also a professor on
leave from Columbia Law School, where he teaches cyberlaw and the history of
political economy.)

Moglen contends that software is a mathematical algorithm and, as such, not
patentable. (The Supreme Court has never expressly ruled on the question.) In
any case, the fact that Microsoft might possess many relevant patents doesn't
impress him. "Numbers aren't where the action is," he says. "The action is in
very tight qualitative analysis of individual situations." Patents can be
invalidated in court on numerous grounds, he observes. Others can easily be
"invented around." Still others might be valid, yet not infringed under the
particular circumstances.

Moglen's hand got stronger just last month when the Supreme Court stated in a
unanimous opinion that patents have been issued too readily for the past two
decades, and lots are probably invalid. For a variety of technical reasons,
many dispassionate observers suspect that software patents are especially
vulnerable to court challenge.

Furthermore, FOSS has powerful corporate patrons and allies. In 2005, six of
them - IBM (Charts, Fortune 500), Sony, Philips, Novell, Red Hat (Charts) and
NEC - set up the Open Invention Network to acquire a portfolio of patents that
might pose problems for companies like Microsoft, which are known to pose a
patent threat to Linux.

So if Microsoft ever sued Linux distributor Red Hat for patent infringement,
for instance, OIN might sue Microsoft in retaliation, trying to enjoin
distribution of Windows. It's a cold war, and what keeps the peace is the
threat of mutually assured destruction: patent Armageddon - an unending series
of suits and countersuits that would hobble the industry and its customers.

"It's a tinderbox," Moglen says. "As the commercial confrontation between [free
software] and software-that's-a-product becomes more fierce, patent law's going
to be the terrain on which a big piece of the war's going to be fought.
Waterloo is here somewhere." Party crasher

Brad Smith, 48, became Microsoft's senior vice president and general counsel in
2002, the year the company settled most of its U.S. antitrust litigation. A
strawberry-blond Princeton graduate with a law degree from Columbia, Smith is a
polished, thoughtful and credible advocate whom some have described as the face
of the kinder, gentler, post-monopoly Microsoft. But that's not really an apt
description of Smith; he projects intensity, determination, a hint of Ivy
League hauteur, and ambition.

We're sitting at a circular table in Smith's office in Building 34 on the
Redmond campus, with a view of rolling green lawns splashed with pink-blossomed
plum trees. In the 1970s and 1980s, Smith recounts, software companies relied
mainly on "trade secrets" doctrine and copyright law to protect their products.
Patents weren't a big factor, since most lawyers assumed that software wasn't
patentable.

But in the 1990s, all that changed. Courts were interpreting copyright law to
provide less protection to software than companies had hoped, while
trade-secrets doctrine was becoming unworkable because the demands of a
networked world required that "the secret" - the program's source code - be
revealed to ever more sets of eyes.

At the same time courts began signaling that software could be patented after
all. (A copyright is typically obtained on an entire computer program. It
prohibits exact duplication of the code but may not bar less literal copying.
Patents are obtained on innovative ways of doing things, and thus a single
program might implicate hundreds of them.)

In response, companies began stocking up on software patents, with traditional
hardware outfits like IBM leading the way, since they already had staffs of
patent attorneys working at their engineers' elbows. Microsoft lagged far
behind.

As with the Internet, though, Microsoft came late to the party, then crashed it
with a vengeance. In 2002, the year Smith became general counsel, the company
applied for 1,411 patents. By 2004 it had more than doubled that number,
submitting 3,780.

In 2003, Microsoft executives sat down to assess what the company should do
with all those patents. There were three choices. First, it could do nothing,
effectively donating them to the development community. Obviously that "wasn't
very attractive in terms of our shareholders," Smith says.

Alternatively, it could start suing other companies to stop them from using its
patents. That was a nonstarter too, Smith says: "It was going to get in the way
of everything we were trying to accomplish in terms of [improving] our
connections with other companies, the promotion of interoperability, the
desires of customers."

So Microsoft took the third choice, which was to begin licensing its patents to
other companies in exchange for either royalties or access to their patents (a
"cross-licensing" deal). In December 2003, Microsoft's new licensing unit
opened for business, and soon the company had signed cross-licensing pacts with
such tech firms as Sun, Toshiba, SAP and Siemens.

At the same time, Smith was having Microsoft's lawyers figure out how many of
its patents were being infringed by free and open-source software. Gutierrez
refuses to identify specific patents or explain how they're being infringed,
lest FOSS advocates start filing challenges to them.

But he does break down the total number allegedly violated - 235 - into
categories. He says that the Linux kernel - the deepest layer of the free
operating system, which interacts most directly with the computer hardware -
violates 42 Microsoft patents. The Linux graphical user interfaces -
essentially, the way design elements like menus and toolbars are set up - run
afoul of another 65, he claims. The Open Office suite of programs, which is
analogous to Microsoft Office, infringes 45 more. E-mail programs infringe 15,
while other assorted FOSS programs allegedly transgress 68.

Now that Microsoft had identified the infringements, it could try to seek
royalties. But from whom? FOSS isn't made by a company but by a loose-knit
community of hundreds of individuals and companies. One possibility was to
approach the big commercial Linux distributors like Red Hat and Novell that
give away the software but sell subscription support services. However,
distributors were prohibited from paying patent royalties by something whose
very existence may surprise many readers: FOSS's own licensing terms.
===

  /m

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