Many communities dream of becoming the next Silicon Valley. But Seattle is actually doing it. The influx of entrepreneurs and of venture capitalists to bankroll them is slowly reshaping this city and a regional economy long buffeted by the booms and busts of the aerospace and timber industries. A start-up ecosystem needs social networks, support businesses and a business culture that views failure as a badge of honor, not shame. All of that is in place in Seattle.
Money is pouring in. During the last 12 years, venture capital investment here has more than tripled, to about $1 billion annually. Last year Washington tied with Texas as the third-largest destination for venture capital money nationwide, behind California and Massachusetts.
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As I have previously blogged, “Microsoft claims that free software like Linux, which runs a big chunk of corporate America, violates 235 of its patents. It wants royalties from distributors and users. Users like you, maybe.”Â The latest turn in the saga of MS vs. innovation continues.Â This time it could be very bad news for Microsoft.
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Richard Fontana, counsel for the Software Freedom Law Center and one of GPLv3’s authors, told me awhile back, “Now that Microsoft has effectively become a distributor of Linux, by distributing some 50,000 or so Novell SLES coupons, it has perhaps unwittingly restricted its ability to sue Linux users over its patents.
“While this is particularly clear under the forthcoming Version 3 of the GPL, the Microsoft lawyers who helped craft the MS-Novell deal appear to have overlooked the fact that, by procuring the distribution of lots of free software under GPL Version 2, among other licenses, Microsoft has already lost some of its power to assert patents against subsequent distributors and users of that software,” Fontana said.
Microsoft is doing its best to wiggle out of this. Gutierrez said, “We do not believe that Microsoft needs a license under GPL to carry out any aspect of its collaboration with Novell, including its distribution of support certificates, even if Novell chooses to distribute GPLv3 code in the future. Furthermore, Microsoft does not grant any implied or express patent rights under or as a result of GPLv3, and GPLv3 licensors have no authority to represent or bind Microsoft in any way.”
Microsoft contends they are not bound by the GPLv3.
Microsoft is “not a party to the GPLv3 license, and none of its actions are to be misinterpreted as accepting status as a contracting party of GPLv3 or assuming any legal obligations under such license,” Horacio Gutierrez, Microsoft’s vice president of intellectual property and licensing, said July 5.
“While there have been some claims that Microsoft’s distribution of certificates for Novell support services, under our interoperability collaboration with Novell, constitutes acceptance of the GPLv3 license, we do not believe that such claims have a valid legal basis under contract, intellectual property or any other law,” said Gutierrez, in a July 5 statement.
“In fact, we do not believe that Microsoft needs a license under GPL to carry out any aspect of its collaboration with Novell, including its distribution of support certificates, even if Novell chooses to distribute GPLv3 code in the future. Furthermore, Microsoft does not grant any implied or express patent rights under or as a result of GPLv3, and GPLv3 licensors have no authority to represent or bind Microsoft in any way,” he said.
Novell goes public with terms of Microsoft Linux deal – Network World
The patent agreement between the two companies seems to make it clear that Novell does not accept any of Microsoft’s patent claims. Section 3.4 says, “Nothing in this Agreement shall imply, or be construed as an admission or acknowledgement by a Party, that any Patents of the other Party are infringed, valid or enforceable.”
Sounds like the best news OS advocates could have hoped for
PC World – Microsoft Patent Claims Hint at Internal Issues
In a follow up to Microsoft takes on the free world, PC World has an article today which points to internal issues as Microsoft that may be driving their recent “behavior” vis-a-vis patents.
Microsoft’s claims that it will ask distributors and users to pay royalties for up to 235 of its patents included in open-source software, including Linux, is clearly an attempt to spread fear, uncertainty and doubt and make people hesitant to use open source as an alternative to commercial products, intellectual-property (IP) attorneys said. But the claims also raise questions about the business strategy behind Microsoft’s aggressive moves to seek licensing money from patents amid rumbles that customers have been slow to adopt Windows Vista and Office 2007, while new products such as the Xbox 360 remain unprofitable.
There may be a link between the timing of Microsoft’s claims against open source and the release of its Windows Vista product, said Stuart Meyer, partner at Fenwick & West in Mountain View, California. Rather than add features to Vista that would make business users want to adopt it, the OS’ distinguishing characteristic is the addition of an engine that will shut down users access to Vista if they are using a counterfeit or pirated version of the software, he said.
“Why do people want to want to switch to an OS that just includes new hurdles that have to be cleared?” he said. Microsoft may have decided that enforcing its IP through litigation is more important than offering innovative software that can compete on its own merits, a strategy that may leave many users unimpressed, Meyer suggested.
It remains to be seen whether Microsoft will be able to collect on its claims or if the open-source community will use them to strive for patent reform, currently a popular issue before the U.S. Congress. However, the claims certainly will raise important issues around how patent-infringement cases will be litigated in the future, said Paul Lesko, head of the IP litigation group at SimmonsCooper LLC in St. Louis.
Linux evangelist Eric Raymond seems to think the patents at issue fall under the latter category. “It is nearly as certain that those patents are all junk,” he said in an e-mail interview. “If Microsoft had sound and critically relevant patents to assert, they wouldn’t need to screw around with vague threats. They’d simply publish the patent numbers and it would be game over for Linux.”
Microsoft claims software like Linux violates its patents
Microsoft claims that free software like Linux, which runs a big chunk of corporate America, violates 235 of its patents. It wants royalties from distributors and users. Users like you, maybe.
Folks, it is time to take a stand. Yes, everyone is doing it (see patent activity chart), but that doesn’t make it right. I have quoted extensively from this well written article. Of course, Microsoft likes to play both sides of the issue, with their arguments carefully crafted to support their MBAs (Microsoft Benefit Analysis). Once again, innovation takes a back seat when Microsoft steps in.
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. 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, Microsoft is pulling no punches: It wants royalties. If the company gets its way, free software won’t be free anymore.
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.
FOSS developers, who do not have the resources to defend themselves against a Microsoft patent suit, felt safe as long as powerful corporate Linux users shared their cause. But now the big boys could just buy their Linux from a royalty-paying vendor like Novell, getting protection from lawsuits and leaving the little guys to fend for themselves. What the shortsighted corporate types didn’t grasp was that without the little-guy developers there might not be any high-quality FOSS for them to use five years down the road.
Microsoft’s big nightmare: free online apps
Moglen had another card to play. In his view, the fact that Microsoft was selling coupons that customers could trade in for Novell Linux subscriptions meant that Microsoft was now a Linux distributor. And that, as Moglen saw it, meant that Microsoft was itself subject to the terms of the GPL. So he’d write a clause saying, in effect, that if Microsoft continued to issue Novell Linux coupons after the revised GPL took effect, it would be waiving its right to bring patent suits not just against Novell customers, but against all Linux users. “I told Brad,” he recalls, “‘I think you should just walk away from the patent part of the deal now.'”
Smith didn’t, and Moglen kept his promise. On March 28, the Free Software Foundation made public revised GPL provisions, which are expected to take effect in July.
Microsoft and Novell both vow to proceed with their deal as planned. Microsoft claims that its mere distribution of coupons won’t make it subject to the GPL, as Moglen asserts. But even if Microsoft is right about that, there’s no doubt that distributors remain subject to it, and Moglen’s revisions will bar them from trying to strike deals like Novell’s.
That may be bad news for big corporate customers, which, judging from early reports, like the Novell deal. Presumably at least part of its appeal is that it provides peace of mind about Microsoft’s patent claims. In the first six months, such marquee clients as Credit Suisse, Deutsche Bank, AIG Technologies, HSBC, Wal-Mart, Dell and Reed Elsevier have all acquired Novell Linux coupons from Microsoft.
Microsoft had hoped that the Novell deal would become a model it could use to collect patent royalties from other distributors of free software. In that respect, its “bridge” to the free world appears to have failed. That, in turn, seems to have taken us a step closer to patent Armageddon.
“The only real solution that [the free-software] folks have to offer,” Smith says, “is that they first burn down the bridge, and then they burn down the patent system. That to me is not a goal that’s likely to be achieved, and not a goal that should be achieved.”
When it comes to software patents, though, Moglen thinks that’s exactly the goal to be achieved. “The free world says that software is the embodiment of knowledge about technology, which needs to be free in the same way that mathematics is free,” he says. “Everybody is allowed to know as much of it as he wants, regardless of whether he can pay for it, and everybody can contribute and everybody can share.”
In the meantime, with Microsoft seemingly barred from striking pacts with distributors, only one avenue appears open to it: paying more friendly visits to its Fortune 500 customers, seeking direct licenses.
If push comes to shove, would Microsoft sue its customers for royalties, the way the record industry has?
“That’s not a bridge we’ve crossed,” says CEO Ballmer, “and not a bridge I want to cross today on the phone with you.”
I wonder why not, Steve?
UPDATE: Response has been swift and almost unanimously against Microsoft.
More from the Seattle-PI
Mary Jo Foley’s reaction over at ZDNet
Set-top Boxes Open Up
“However, many assert that it’s Microsoft Corp. –which doesn’t make STBs and is often accused of attempting to lock in users to its own priority technologies %u2013 that has done the most to advance the role of the set-top box. “
I always love it when a writer makes a vauge reference to some nebulous 3rd party like “many”. Who are these “many”? “However, many assert that it’s Microsoft Corp. – which doesn’t make STBs and is often accused of attempting to lock in users to its own priority technologies – that has done the most to advance the role of the set-top box.However, many assert that it’s Microsoft Corp. – which doesn’t make STBs and is often accused of attempting to lock in users to its own priority technologies – that has done the most to advance the role of the set-top box.”
I have never met anyone, anywhere that would assert Microsoft has ever done anything but “open” hardware in an attempt to dominate a market. Microsoft creates the appearance of openness while denying to others the benefits thereof.
While multi-function devices like the Xbox 360 are very interesting and may help IPTV service providers differentiate service, remember this too is a Microsoft controlled platform.
Technologies such as OCAP provide a level playing field for a number of companies wishing to innovate on a cable operators network. While OCAP may not prove to be a panacea, technologies such as OCAP, where everyone has access to the platform, will do more to open up the STB market than anything Microsoft has ever or will ever do.