April 17, 2014

avatar

MS to Sue Linux over Patents?

A two-year-old internal memo from Hewlett-Packard predicted that Microsoft would soon launch patent-infringement suits against companies that distribute open-source products such as Linux and Apache, according to a Joe Barr story at NewsForge. (The article reprints the memo in full.) The memo is clearly based on statements made by Microsoft negotiators during a patent licensing negotiation with HP.

My first reaction to the story was that this was just a negotiating ploy by Microsoft, to scare HP into granting better patent licensing terms – an implicit threat to sue HP if you they rejected an offered deal. But after reading the whole memo, that seems unlikely. Apparently the eventual agreement did not protect HP against the threatened suits; so raising a false alarm about such suits would have made the negotiation harder for Microsoft, not easier.

Another possibility is that Microsoft really did intend at the time to file suits. If so, the question is why, two years later, no suits have been filed. Slashdot posters suggested that the SCO-IBM suit is providing the FUD (fear, uncertainty, and doubt) about open-source that Microsoft was hoping to create with its suits, rendering a Microsoft suit unnecessary. But if some FUD is good for Microsoft, why isn’t more better?

Perhaps Microsoft changed its mind, because it couldn’t find a strong enough patent to assert, or because it feared patent-infringement countersuits from the intended targets of its litigation. This one also seems unlikely. If Microsoft’s goal was to create FUD and run up a defendant’s litigation expenses, then even an iffy patent would suffice, and Microsoft would have no trouble at all finding a patent to use. And if the goal of a suit was just to create FUD, then it wouldn’t much matter who they sued, so they would certainly be able to find somebody without a big patent portfolio to go after.

Most likely, the lawsuit threat was a ploy, designed to create FUD at HP about its use of open-source products. And the HP memo is evidence that it was working; the author clearly wanted to reduce HP’s “exposure” from its use of open-source.

Comments

  1. Chris says:

    Or – Microsoft finally got big?

    Big companies with large market share eventually realize that making radically better products doesn’t get you radically more customers. I would guess that Microsoft reached this point a couple of years ago.

    But large companies usually also realize that silly, stupid, or pointless public actions can only serve to harm your reputation, and cost you customers. Instead, what you start to get is consistent, if unsparkling, behaviour, that is designed to be innocuous at worst. The best clue that this is going on is the use of the term “reputational risk” – you can’t win many more customers, but you might irritate some of the current ones.

    This is the dreaded corporate risk aversion at the core of things like “The Innovator’s Dilemma”, but it is also extremely hard to avoid.

    The other minor point that comes to mind is that while attempting FUD, you may also be informing your customers about the competition. You have to decide if the reward justifies the risk.

  2. Ruidh says:

    AN other explanation I’ve heard mentioned: MS didn’t want to sink the European SOftware Patent issue and was waiting for them to be enacted.

  3. Fred says:

    There’s some good comments (as always) over at Groklaw

    http://www.groklaw.net/article.php?story=20040712104852353

  4. brtleby says:

    Sometime in the last year Microsoft announced that it would begin a program of licensing its IP more widely.

    This was viewed by some as a move to the IBM model. IBM licenses its technologies liberally, netting them an additional $1B US a year for very little incremental effort.

    There is another possibility though, which is that MS is only interested in licensing things like CIFS/SMB and FAT to a few small companies in order to establish a precident, then go after IBM, HP, RedHat for back royalties.

    So, which is it? Its hard for an outsider to say, but rumor has it, there isn’t much staff devoted to patent licensing under this new program, certainly not as many as you might expect if they were treating licensing as a real business.

    Some dilligent reporting should be able to get a better picture. What do VCs say. Have they had luck with requests to review the portfolio? Have they had luck trying to license patents that aren’t spoilers for widely adopted open source software? Who has MS been shopping IP too, and what IP?