Microsoft vs. Open Source: What's 235 Patents Among Friends?

Tuesday May 15th 2007 by James Maguire
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Analysts talk about Microsoft’s claim that open source software infringes on 235 of its patents. Is it just routine FUD, or are we headed into litigation hell?

It's a move that has the potential to radically reshape the software business. Or, it may be merely corporate saber rattling that has little real effect.

Whatever the case in the long run, when Microsoft general counsel Brad Smith told Fortune that open source software violates 235 Microsoft patents, it sent tremors through the tech industry.

“It’s going to create a lot of shock waves,” says IDC analyst Al Gillen, who notes that this kind of move has been expected from Microsoft sooner or later.

While Microsoft has made similar claims before – as in a 2004 speech by Steve Ballmer – this time is different, Gillen tells Datamation. “Putting a hard number to it and starting to be a lot more specific about it, begins to narrow down the discussion.”

Indeed, Microsoft’s claims have specific numbers attached, if not the exact patents allegedly violated. According to Fortune, the company claims that the Linux kernel violates 42 patents, and the Linux GUI violates an additional 65; email programs infringe on 15, and other open source apps violate an additional 68 Microsoft patents. OpenOffice – a direct competitor with cash cow Microsoft Office – violates 45 patents, Microsoft claims.

And with those numbers, corporate buyers of open source software have been put on notice. “If Microsoft begins to drive any kind of litigation or any further action, there’s going to be an awful lot of commotion in the industry,” Gillen says.

As Gartner analyst George Weiss notes, Redmond’s move is reminiscent of the SCO Group’s claims that Linux infringed on its intellectual property. “Excerpt this time we’re not dealing with SCO, we’re dealing with Microsoft” – a far larger and more sophisticated opponent.

A Cudgel Against GPL 3 (Stallman’s Blunder)

When Microsoft and Linux vendor Novell formed an alliance last November (presumably to help Windows and Linux software become more interoperable) it created the oddest of odd bedfellows. Not surprisingly, Microsoft brought a very proprietary sense of software licensing to the deal – which quickly upset the drafters of the General Public License.

Richard Stallman, founder of the GNU Project, has announced that the next version of GPL, GPL v3, would eliminate such deals. It’s unclear when GPL v3 will be finalized, but Weiss feels confident that it will exclude pacts like Microsft-Novell.

In response, Microsoft’s claim of 235 patent infringements is, “a retaliatory measure by Microsoft against Stallman’s GPL initiative,” Weiss says. “There using this as a cudgel against the GPL 3 that Stallman is trying to create, which would effectively, over time, cut out Microsoft and the agreement they have with Novell.”

But in the story’s oddest twist, Richard Stallman himself announced that a “thorough study” found that the Linux kernel infringed on 283 patents. (For a transcript of the speech in which Stallman announces that, go here. He does not mention Microsoft specifically.) Stallman, Weiss says, “made what I think is a critical mistake in announcing that he found some 283 violations – that’s the worst thing he could do.”

“So he put the whole Linux market on edge right there.” Microsoft, of course, is trumpeting Stallman’s comments about Linux violations.

Clearly, Redmond’s strategy isn’t intended to provoke warm fuzzies among Linux proponents. “Microsoft’s efforts to exert control over the Linux market absolutely infuriates Richard Stallman and the Linux market and the open source community in general,” Weiss says.

“If there’s anything they can’t stand, it’s an outside third party dictating to the users what open source applications they should be employing – and that’s exactly what Microsoft is doing. They’re interfering with the open source decisions of the user community in a threatening way.”

Disabling the Kernel

Microsoft, though it has listed the number of alleged violations, remains vague about their exact nature. At this point this is all a game of poker in which no cards have been shown.

“When Microsoft gets explicit about what they feel the infringements are, I believe you would find the Linux community fairly responsive to address the things that are legitimate infringements,” Gillen says. Adds Weiss: “If it’s just lines of code, obviously the Linux community thinks they can just swipe out the offending code and put other code in there.”

However, Weiss says, Microsoft is making it known that in its opinion these are not pure lines of infringement – these are design patent infringements.

“If the Linux community wants to redress these infringements, they’ll probably have to take out huge blocks from the kernel, and remake it,” he says. “And as far as Microsoft is concerned, if they had to do that, it would bring Linux down to its knees and it would never recover.”

The Big Question

The defining question in Microsoft’s patent claims is: what will Redmond actually do about these alleged violations?

The company, in an email response to internetnews about the matter, says its goal is not to litigate but to license its intellectual property to Linux users. The company expects to collect royalties from end users, or alternately, ink cross-licensing deals in which companies would allow Microsoft to access their patents. (In 2003, Microsoft launched a licensing unit, and has created cross-licensing pacts with the likes of SAP, Toshiba and Sun.)

But that strategy appears to be limited. Only a percentage of Fortune 1000 companies are tech firms that Microsoft could sign cross-licensing deals with. The other corporations, across retail, finance and other sectors, would presumably be asked to pay royalties. But without some threat of litigation, however hypothetical, why would a large number of companies agree to pay Microsoft licensing fees for using Linux and open source?

And for Microsoft to launch litigation based on these supposed violations has gaping pitfalls. One obvious flaw: large end users of Linux are often also large end users of Windows.

“Let’s face it,” Gillen says. “If you take any customer who uses a lot of Linux in their backend operations, I’ll bet they’re a big Microsoft shop in the front end. So Microsoft has to be careful that they don’t go out an initiate a lot of litigation against their own customers.”

“You drive the customers away with that kind of behavior.”

These factors make actual Microsoft litigation appear unlikely. Notes Gillen: “Who are they going to sue? Even if they sued, say, Red Hat, and they take one hundred percent of Red Hat’s revenue, when you talk about the kind of costs that Microsoft would incur for this kind of litigation…” there would be no real financial gain.

Sowing Confusion

Weiss says that what Microsoft really wants, rather than royalties, is to get large Linux users to buy into the agreement that Microsoft has with Novell, and to purchase SUSE Linux rather than any other Linux.

“It’s a step by step process of fighting Stallman, intimidating the market, and trying to create a flow of momentum toward Novell SUSE,” he says.

“It’s not necessarily that Novell has to be the winner, but if Novell gets bigger and more powerful, then they hope that Red Hat will maybe come into line. Or, if they don’t come into line, then the market gets more fragmented between multiple Linux distributions, and maybe the users will find that it’s better to go with a homogeneous approach like Microsoft’s.”

“Microsoft is saying, ‘We will protect you if you go with SUSE,’” a stance that could conceivably cause some migration away from Red Hat, he says. “Then Red Hat stock plummets, and Novell becomes more of an important distributor. There’s confusion in the market, migration going on from one distribution to another, and Microsoft sits on the sidelines watching the jousting.”

Gladiators in the Ring

Certainly the open source community has defensive measures in progress. Among other tactics, the Open Invention Network is gathering a portfolio of patents. Some observers suggest that, if Microsoft were to litigate, the OIN would reply by taking legal action against Windows based on this accumulated IP. “It’s a counter attack portfolio,” Weiss says.

At the end of the day, Microsoft’s motivation is partially saber rattling, Gillen says. The company wants to protect its brand from encroachments by Linux and other open source software. “They’re creating a certain amount of fear, uncertainty and doubt.”

“It’s about protecting against the lost revenue they would experience if Linux damages their position in the market,” he says. “That’s really what it’s about.”

Notes Weiss: “So we have a multiple number of scenarios there, and it’s really like two gladiators in the arena – or multiple gladiators, feeling each other out, stomping around the ring, and making some noises and threats. But nobody’s thrusting yet.” So far, “They’re positioning.”

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