Friday, November 17, 2006

Microsoft | Linux | Patent Infringement

Whew! What a controversey.

Mary Jo Foley is saying in If Linux violates Microsoft's patents, let's see the proof:
"If there is offending code, I think Microsoft should show it and prove it. Why not set up a Web site with a few code snippets that show how Linux violates Windows patents — if such snippets really exist?"
From Adrian Kingsley-Hughes comes, Ballmer: Linux "Infringes our intellectual property" where he is
"Reading between the lines here, Ballmer is saying that all other Linux users out there are stealing from Microsoft and its shareholders."
Of course these articles are certainly resulting in heated reaction from their readers. Let's look at what Steve Ballmer is quoted as saying in "Todd Bishop's Microsoft Blog" article Ballmer on Novell, Linux and patents:
"What we were able to craft, with a lot of hard work with Novell, was an agreement essentially where we would do the technical work in a variety of different areas to improve interoperability between the two environments. And we agreed on a, we call it an IP bridge, essentially an arrangement under which they pay us some money for the right to tell the customer that anybody who uses Suse Linux is appropriately covered. There will be no patent issues. They've appropriately compensated Microsoft for our intellectual property, which is important to us. In a sense you could say anybody who has got Linux in their data center today sort of has an undisclosed balance sheet liability, because it's not just Microsoft patents. Because of the way open-source works, there's nobody who's been able to do patent coverage or patent indemnification behind that.
In reference to Novell, Ballmer's saying that "we agreed on . . . an arrangement under which they pay us some money for the right to tell the customer that anybody who uses Suse Linux is appropriately covered" certainly provides the implication that Microsoft's patent license attorneys negotiated an agreement with Novell wherein Novell agreed to pay a license fee for continued use of Microsoft's patented technology.

This is the way it works in the patent world. When a company believes that another is infringing their valid patent rights, they generally first contact the other company, referencing the patent(s) and claims that they believe are being infringed. The attorneys for the other company then conduct their own analysis of the patents and advise their management of their evaluation.

Sometimes these cases go to litigation before the courts. Other times the companies come to an agreement. Such agreements may be a patent license exchange where they give each other rights to make, use or sell products under each other's patents. The agreement may be that the other company will pay the patent holder an agreed upon amount of money for each item manufactured under the subject patent(s). There are also paid-up licenses, non-exclusive licenses. It is complex, which is why good patent attorneys are highly sought.

Not knowing the facts -- and that is something that would likely be business confidential between Microsoft and Novell -- it certainly appears that in the instant situation, a license has been granted to Novell under certain specified Microsoft patents for the fee paid by Novell to Microsoft.
When Steve Ballmer said that "There will be no patent issues", this further implies that there will be no issues in that case due to the negotiated terms of the license agreement between Microsoft and Novell.

In a quick assignee search in the USPTO from 1976 to date, there are 5802 issued patents assigned to Microsoft. Some are design patents, others are apparatus or method patents. When you consider PCT, EP and other national filings, there is no question that Microsoft has a massive patent portfolio. Having worked with people in the patent field in one way or another for many, many years, I assure you that this is no simple process. It is also, as pointed out by Steve Ballmer, a very costly process, not only to obtain each patent, but to maintain the patents through their life cycle. Microsoft has the right to assert their patent rights.

Something that many people are misunderstanding is that Microsoft is not claiming patent rights of "open source", but rather the patent rights to certain aspects of the technology -- rights under Microsoft patents that Novell has paid Microsoft for the privilege of using.

For information on patent infringement, see
35 USC 271.

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