Microsoft Continues War on Open Source

It’s no secret that Microsoft has been unhappy with the open source software movement for a long time. Ever since Eric Raymond posted the first Halloween document in 1988, it’s been clear that the software giant considers such software a threat to its monopoly. Microsoft’s latest salvo claims that open source software violates 235 of its patents.

The claim was first made in Fortune. The magazine interviewed Brad Smith, a Microsoft lawyer. He claims that the Linux kernel violates 42 Microsoft patents, and its user interface and other elements violate an additional 65 patents. OpenOffice supposedly violates 45 patents, and other open source software infringes 82 more.

Does this mean that Microsoft is preparing to fight open source software in the courtroom? One has to wonder. It doesn’t seem as if this would be the most intelligent move for the company. It isn’t that it would pit Microsoft against the likes of Richard Stallman and Eric Raymond; rather, it would pit the software company against IBM, Dell, Sun, HP, Oracle, and other companies that directly support Linux-related work. For that matter, many Google engineers are involved in creating open source software during their “20% time.”

Microsoft might also find itself making some strange enemies, alienating firms they can ill afford to lose. It has been estimated that more than half of the companies in the Fortune 500 use the Linux operating system in their data centers. With open source software’s reputation for being high-quality, customizable, and more crash-resistant than certain proprietary software, this is understandable. But these are often the same companies that run Microsoft’s operating system and Office suite on all the computers at company headquarters and in the branch offices. Is Microsoft simply hoping that the Fortune article will scare them into using proprietary software? Or is something more subtle going on here?

Microsoft’s rights might not be as clear-cut at it is trying to imply. And the fact of the matter is, the laws pertaining to intellectual property rights surrounding software, open source or otherwise, are very complicated. Some aspects fall under copyright law, while others fall under patent law – and the requirements for obtaining a copyright versus obtaining a patent are as different as night and day. In this article, I plan to examine some of these issues and others in an effort to shed some light on the landscape.

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The Fortune piece describes Microsoft as “a mature company facing unfavorable market trends and fearsome competitors like Google.” Feeling a bit beleaguered, perhaps the software giant believes it needs to get its hands on as much money as possible – and surely it deserves payment in the form of royalties for patented software, right? Indeed, Microsoft has already approached a number of large companies that use open source software and entered into direct patent license agreements with them. As the Fortune article explained, the special licenses governing open source software forbid the distributors of such software from paying royalties, but not the users.

One would think Microsoft would be happy with that much. Then again, is it about the money, or the principle? And if it is about the principle, who is in the right here?

Microsoft’s Steve Ballmer tries to make it sound like it’s about the principle. “We live in a world where we honor, and support the honoring of, intellectual property,” he insists, saying that those who use open source software must “play by the same rules as the rest of the business. What’s fair is fair.”

That’s as may be, but those rules look like they’re about to change. At the end of April, the U.S. Supreme Court handed down a decision in KSR vs. Teleflex that “will make it harder to get new patents and to defend existing ones,” according to Peter Lattman, posting on the Wall Street Journal Law Blog. In order to be patentable, an invention must be new, useful and unobvious. This ruling considers the issue of obviousness in a way that seems to apply particularly well to software patents.

The ruling is very subtle in that it addresses patents that are obtained on new products that combine elements of pre-existing inventions. The Supreme Court stated in a unanimous opinion that a combination derived from only “ordinary innovation” that “does no more than yield predictable results” is not entitled to patent protection. Justice Anthony M. Kennedy noted in the opinion that “Were it otherwise, patents might stifle, rather than promote, the progress of useful arts.” You can check out the full 31-page PDF of the decision if you wish.

This decision has been hailed by a number of legal observers as injecting some common sense into patent law. And it’s easy to see how this might affect software patents when you realize that the creation of new software often involves combining a number of pre-existing elements to yield a predictable result. Morgan Reed, executive director of the Association for Competitive Technology, noted that “The KSR decision…will make it much harder to obtain and enforce the kind of absurd software patents that are threatening the future of the patent system.”

I am not a lawyer, but as far as I know, patents don’t get “grandfathered.” If Microsoft tries to assert its patents in court in an attempt to get royalties, those patents can be challenged (in all honesty, patents can always be challenged). But they won’t be challenged only under the law and precedents that were considered good when the patent was granted. KSR vs. Teleflex can now be cited as a precedent – and don’t think for a minute that a sharp lawyer is going to ignore it. Microsoft should be concerned, to say the least.

{mospagebreak title=The Open Invention Network}

There are other reasons Microsoft might have a hard time trying to gain its patent rights in a courtroom. For instance, there is the Open Invention Network. It was set up in 2005 by IBM, Sony, Philips, Novell, Red Hat and NEC. Its whole purpose is “to promote Linux by using patents to create a collaborative environment…Patents owned by Open Invention Network are available royalty-free to any company, institution or individual that agrees not to assert its patents against the Linux System,” according to OIN’s web site.

OIN already has an impressive list of more than 100 patents which it owns. It also has an easy-to-fill-out form page for anyone who wants to sell or donate a patent. With a growing portfolio to its own credit, OIN seems quite prepared to file a counter suit should Microsoft make the mistake of assuming, for example, that Red Hat is an easy target for a patent lawsuit.

Certainly OIN wasn’t daunted by the Fortune article. Jerry Rosenthal, OIN’s chief executive officer, says the article’s whole purpose was to perpetuate “unwarranted fear, uncertainty and doubt among current and potential Linux users and distributors.” He pointed out that there never has been a patent lawsuit against Linux, and that the open source operating system “has excellent intellectual property vetting.”

Meanwhile, in an article that appeared in Information Week, Linus Torvalds, the force behind Linux, responded to the Fortune piece with something approaching scorn. “It’s certainly a lot more likely that Microsoft violates patents than Linux does,” he said. “Basic operating system theory was pretty much done by the end of the 1960s. IBM probably owned thousands of really ‘fundamental’ patents. The fundamental stuff was done about half a century ago and has long, long since lost any patent protection.” He would like to see Microsoft name the patents it thinks are being violated. Then the patents can be either struck down if they are bad, or coded around if they’re strong enough to stand.

Torvalds thinks Microsoft’s bluster is a sign of weakness. “So the whole, ‘We have a list and we’re not telling you,’ itself should tell you something. Don’t you think that if Microsoft actually had some really foolproof patent, they’d just tell us and go, ‘nyaah, nyaah, nyaah!’” To be quite honest, one can almost picture Steve Ballmer doing just that, at least in private.

{mospagebreak title=Pot, Meet Kettle?}

Before you get too excited about the 100 or so patents owned by the OIN, keep in mind that Microsoft owns literally thousands of patents. It won’t reveal the specific ones being infringed because it figures that free and open source software advocates will begin filing challenges to them. All of which raises the question: is Microsoft itself infringing software patents?

The deal hammered out in November of last year between Microsoft and Novell hints at that possibility. The two companies agreed not to sue each other’s customers for patent infringements, then worked out complicated revenue and marketing collaboration deals that included a $108 million “balancing payment” from Microsoft to Novell to cover patents.

Both Novell and Microsoft were mum at the time about whether the deal indicated that any patents were infringed. David Kaefer, the director of business development for intellectual property and licensing at Microsoft, said that "For the same reasons that Novell will not say if there are any Microsoft patents they infringe, Microsoft is not going to come out and admit that it has a set of products that infringe Novell’s patents."

So is Microsoft vulnerable in court? At the end of the Fortune article, Steve Ballmer was asked if his company would sue its customers for royalties if it really came down to the wire. “That’s not a bridge we’ve crossed,” he replied, “and not a bridge I want to cross today on the phone with you.” To me, that sounds like neither money nor principle are on the line, but market share; it’s the kind of response you would expect from someone who can’t afford to lose goodwill.

The larger point is that Microsoft was hoping to do deals similar to the one it made with Novell with other large open source software distributors, such as Red Hat. Indeed, Ashlee Vance of The Register thinks the whole point of the piece in Fortune was “to remind Red Hat that it will need to go ahead and strike a deal like Novell.” As Vance correctly pointed out, however, Red Hat may not be the company Microsoft should worry about most when it comes to open source software. “Close partners such as IBM and HP – companies with more than ample patent portfolios – would not sit idly by as Microsoft tried to derail their lucrative Linux server businesses.” And it’s knowing just how convoluted a set of mutually-assured-destruction patent lawsuits could get that will keep this from ending up in the courtroom.

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