Friday, August 6, 2010

Microsoft’s use of patents

Finally, here's a posting on the world's largest software company and one of the largest software patent holders.

In recent months, many people have asked me why I commented so much on IBM and, in their opinion, so little on Microsoft. To some people, this even became a matter of whether or not they could trust me.

Wouldn't Microsoft's name be associated almost automatically with the question of patents affecting free software and open source? Could this blog be on a mission to divert attention away from Microsoft's doings? That's what some said or implied. Dana Blankenhorn made fun of those kinds of assertions on his ZDNet blog.

Just business as usual

Actually, in the four months since I started this blog, there hasn’t been any major news concerning Microsoft's patents in a FOSS context, only an unspectacular license deal between Microsoft and one of its customers (HTC, a manufacturer of smartphones, some of which are Android-based).

There was a high court ruling in Germany upholding a Microsoft FAT patent, and I voiced my criticism. I was going to analyze whether that represented a landmark case, but a ruling by the same court on a Siemens patent stole the show.

Even in the absence of relevant news, I did mention Microsoft on many occasions. This Google search lists all pages of this blog on which Microsoft is mentioned (about 30 by the time I'm writing this). Furthermore, I discussed the EU antitrust case against Microsoft in my presentation at LinuxTag 2010.

But it simply wasn't Microsoft who threatened an open source startup with patents; it wasn't Microsoft who told the US Supreme Court that software patents liberated programmers and made free software fly; and it wasn't Microsoft CEO Steve Ballmer who said a patent pool was being assembled to go after Ogg Theora and other open source codecs. They’re not even part of a group luring ever more open source companies into a dangerous patent trap.

A reality check

Having a bogeyman is easy and convenient. Taking a more differentiated perspective is the harder thing to do, but sometimes it's necessary in order to identify and confront the real issues. That's what I try very hard to do. I know that some people will disagree with me initially, but I'm in this for the long haul.

All proprietary software companies view patents as a kind of strategic leverage that may help them fend off threats from open source. IBM has been a patent bully for decades and its open source activities haven’t changed that (they’ve only become more hypocritical). Microsoft, Oracle and SAP all took a critical perspective on software patents earlier on, but at least in a couple of those cases it's likely due to the rise of free software that they became avid mass-producers of software patents (and lobby for them all the time).

Since Microsoft is the most profitable one of those, I, too, believed for some time that they might want to wage a patent war against FOSS to protect their turf. That concern played a key role when I founded the NoSoftwarePatents campaign. I saw Microsoft behind about every pro-patent lobbying entity I was fighting against, and I fought very hard.

But that's history and doesn't prevent me from recognizing the fact that my fears haven't materialized. After all those years -– and 5-6 years is a really long time in IT –- it’s time to face the facts. At least so far, Microsoft doesn't use its patents in a destructive way. They don't just sit on their patents without doing nothing, but they're a cooperative right holder who doesn't use them to shut out competition.

Further below I'll talk about the four patent suits they filed, and let me already say that none of them has me worried.

Microsoft and FOSS

Every company is unique, but at this stage I don't see a fundamental difference between Microsoft’s attitude toward FOSS and that of other large proprietary vendors.

All of them obviously prefer not to open-source their core products because the proprietary model makes them more money. They all view free software as a potential competitive threat to their core businesses. At the same time, they all have benefits from FOSS and try to maximize them. Businesses are opportunistic, not ideological.

Microsoft as a platform company needs developer support. Developers, however, generally like FOSS. So I can't see how Microsoft would go to war against the community.

Stephen Spector, the community manager of the open source virtualization project, recently listed the all-time top ten open source applications according to SourceForge, every single one of which is also available for Windows. He then asked a good question: "Can we now officially end the 'Microsoft is the Devil' argument and focus on more productive efforts to work together or is Microsoft forever the enemy of open source?"

Glyn Moody, a FOSS-specialized blogger, wrote a thoughtful piece on the Codeplex Foundation (started by Microsoft but trying to become independent). Glyn's whole article is worth reading. Let me just quote the first sentence: "One of the most fascinating strands in the free software story has been Microsoft's interactions with it."

Almost a decade has passed since that "cancer" remark (which didn't refer to GNU/Linux as a whole, only to the self-propagating copyleft principle of the GPL). Times have changed:

Last year, Tim O’Reilly, who is a very principled man and staunchly pro-FOSS, entered into a strategic book publishing alliance with Microsoft Press. A couple of weeks ago, Microsoft switched the license of two programming languages, IronPython and IronRuby, from a license of their own, which actually had been approved by the Open Source Initiative, to the Apache Software License 2.0. I don't expect this trend to be reversed. It should accelerate.

I don't think there's any company (not even an open source company, whether self-proclaimed or true) whose dealings need not be scrutinized. All I'm saying is that I refuse to substitute my past fears for today's reality. Looking at market dynamics, the regulatory environment and other relevant factors, I think there's a pretty good chance that Microsoft's peaceful coexistence with FOSS will continue and become ever more fruitful.

Personal remarks on hypocrisy

This is a bit of a digression, but I'd like to describe one problem that I have with other companies in the industry and not with Microsoft: open double standards. I've never seen Microsoft lobby politicians and regulators in the name of open source. Everyone knows they're a proprietary software company. That's their business model; it's their way of life. No denying.

I'm a pluralist. We don't all have to be the same and do the same.

But what I really can't stand is the way in which some claim to be "open" when it’s just about commercial interests. IBM, Oracle and Google have core businesses that are closed. Nevertheless, under the umbrella of "OpenForum Europe", an entity that lobbied for software patents, they falsely claim to advance the cause of FOSS. IBM is the worst one in that respect. Not only do they claim to be "open" but they even misuse the Free Software Definition for their purposes. I don't deny that they make important contributions to some FOSS projects, but they're also responsible for some of the most harmful things, especially when it comes to patents.

My criticism of that kind of hypocrisy is nothing new. This ZDNet article from January 2005 quotes me on that subject.

Microsoft doesn’t have that kind of problem.

Competition is key in all markets

Let me also take the consumer's perspective. I think we're way past the point at which we’d have to be afraid of Microsoft dominating all of IT. I want all of them –- including but not limited to Microsoft -– to face serious competition. That's the best recipe for innovation.

There are now certain markets in which it's positive if Microsoft exerts competitive pressure on the leaders (Internet search, relational databases, even smartphones). The incumbents in those markets are similarly closed as Microsoft. I don't think we'd be better off with Google running it all, Oracle acquiring it all, or Apple "curating" it all.

Richard Stallman, the founder and leader of the software freedom movement, said something interesting in June. Here's my translation of his remark, which was quoted by leading Spanish newspaper El Mundo:
Apple is more evil and much more restrictive than Microsoft because it even limits our right to run applications.

The right way and the wrong way to use patents

My long-standing opposition to software patents has many reasons. The biggest concern has always been that such patents could be used to require a company or FOSS project to remove certain functionality, potentially driving a company out of business or shutting down a FOSS project.

I ran my own start-up from 1996 to 2000, and was a shareholder of MySQL AB from 2001 to 2008. So I know what it's like to worry about the viability of a business and to have responsibility for others. The thought of patent litigation killing a company is just dreadful. Compared to that, a patent holder who collects a limited amount of royalties but lets you stay in business is hugely preferable. Any day of the week.

If it were up to me, most software patents would never be granted in the first place. But if companies meet the legal criteria for obtaining them and pay their fees, it would be unrealistic to assume they’re just going to sit on them. If we don't want them to use their patents at all, we have to persuade governments not to grant them in the first place.

A patent is the right to prevent anyone from using the claimed invention. It's an exclusionary right. Patent law itself doesn't require a right holder to be cooperative. He may, but does not have to, offer a commercial license. Other laws, such as antitrust rules, may impose such requirements, but only under exceptional circumstances.

That's why I think the most one can realistically expect a patent holder to do is to grant licenses on fair, reasonable and non-discriminatory (FRAND) terms. If that happens, then at least everyone can innovate and go about his business. It makes those patents non-exclusionary in practical terms. Such license agreements certainly have a competitive impact, but they don't eliminate competition.

By contrast, the strategic exclusionary use of patents can have disastrous effects and is even worse than so-called trolls.

License deals are generally good news

In most of the news about Microsoft and patent litigation, they're actually the defendant. There are also occasional announcements of license deals.

I know and understand that some members of the FOSS community view those very negatively, especially when companies such as Amazon and HTC pay patent royalties to Microsoft that relate to their use of GNU/Linux, but for the reasons I explained above, those deals are an inevitable consequence of software patents and companies simply have an obligation vis-à-vis their shareholders to make money.

A license deal is always good news in the sense that a dispute has been avoided (or resolved). It also means that the licensee has determined that his business is still profitable even when paying such royalties: otherwise there wouldn’t be a point in a deal.

One can argue that patent royalties aren’t reconcilable with the concept of free software. Since software patents exist, this would conversely mean that free software is incompatible with today's legal framework. At any rate, patent royalties are a partial restriction of freedom, while the exclusionary use of patents (such as demonstrated by IBM in the TurboHecules context or, apparently, Apple vs. HTC) has a truly devastating effect on everything: freedom and beyond.

Let's also consider that the vast majority of IT companies who end up paying such royalties are very much in favor of software patents. They pay for what they themselves want.

Patent suits started by Microsoft: only as a last resort

I've looked up information about all four patent suits started by Microsoft thus far. A consistent element is that Microsoft only sued those companies because they were absolutely unwilling to do a license deal. In each of those cases, Microsoft announced the filing of the respective lawsuit and pointed out that the defendant refused to license (or even to negotiate). Microsoft tried (in most cases for a year or more) to resolve the situation amicably, and went to court as only a last resort.

In none of the four cases, the defendant was a traditional software company. The defendants include three hardware companies and one cloud company (

Two of the three cases involving hardware companies -- Belkin and Primax -- didn't even relate to software patents but to patents on peripherals.

The TomTom suit was filed in early February 2009 and settled the following month. TomTom tried to countersue Microsoft over some of its own patents. Of the eight patents asserted by Microsoft, five related to TomTom's proprietary software and only three to Linux, on top of which TomTom builds its closed-source technology. In a wider dispute, I can see why Microsoft would also use those FAT patents: they’ve survived different "patent busting" attempts, so they’re legally very strong. TomTom ultimately accepted to license those for some time and will try to work around them in the future.

The case was settled a few days ago. agreed to pay royalties for patents in three areas: operating systems, cloud computing and customer relationship management. The reference to operating systems suggests to me that also recognized a need to license certain patents that it would otherwise infringe by running its servers on Linux, but the dispute appeared to be primarily about cloud computing and customer relationship management. had also tried to assert some of its own patents against Microsoft, but I doubt that those represented a major threat.

All four lawsuits resulted in a license deal. So Microsoft got what it proposed in the first place, just that some wanted to test Microsoft's determination to actually take them to court. I think Microsoft can’t be blamed for those companies’ brinkmanship. There was serious doubt whether TomTom even had the financial strength to defend itself in a multi-year patent suit with all the uncertainty it would have created for its business. So they should have done a license deal. They might have speculated that their use of Linux would shield them. It didn't.

The key thing to me is that all of those lawsuits could have been avoided easily. If Microsoft continues to use its patents in the cooperative, reasonable way it has used them so far, then I don’t think there’s a threat to FOSS projects or companies.

As long as companies have a chance to strike a deal on fair, reasonable and non-discriminatory terms and stay in business, no problem. Of course, should that ever change, I'll adjust my position to reality once again.

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