November 10, 2004 6:55 AM PST
Microsoft to back customers in infringement cases
The software maker announced on Wednesday that it will indemnify nearly all its customers against any claims that their use of Microsoft software infringed on any intellectual-property claims. The company said the protection extends to current and older versions of its software, including its Windows operating system, Office desktop software and SQL Server database.
The company already offers unlimited protection to its volume license customers but is adding the indemnity for customers who buy its key products in other ways, such as from a computer maker or even off a retail shelf.
"When we looked at things, there was no reason not to provide that coverage to all those folks as well," said David Kaefer, director of intellectual-property licensing for Microsoft. The protection covers four main types of claims: patent, copyright, trade secret and trademark.
The protection extends to nearly all of Microsoft's products, with the main exception being embedded versions of Windows, largely because customers are able to modify the code.
Of course, it's not just altruism that motivates the software maker. The company plans to make indemnity a new plank in its "Get the Facts" campaign, which touts the advantages of Windows over Linux.
Chief Executive Steve Ballmer talked about indemnity as a key differentiator during Tuesday's shareholder meeting.
"We enhance the intellectual-property indemnifications we give our customers," Ballmer said at the meeting. "We can stand behind our products in a way that open source can't because they have no one standing behind them."
Kaefer said the argument is resonating with some customers who are concerned about liability. "More and more customers are realizing you don't get what you don?t pay for," he said.
Hewlett-Packard and Novell have offered liability protection to some Linux customers, but both Microsoft and analysts note that most of the protections from the Linux vendors are more limited.
Last year, Microsoft lifted a cap for its volume-licensing customers that had limited the dollar amount of protection Microsoft offered its customers against intellectual-property claims resulting from their use of Microsoft software.
Microsoft has been beefing up its own intellectual-property portfolio, a move that Kaefer said does make it easier for Microsoft to offer such protections.
"The reason we are able to do this at all is because we have done some of the things that you have to do earlier in the process," he said.
As part of the announcement, Microsoft highlighted two customers--Regal entertainment and ADC Telecommunications--that said that indemnity was key to their choice of Windows over Linux.
"We simply aren't interested in having to worry about potential legal risks of deploying Linux in this environment," ADC Telecommunications manager Jamey Anderson said in a statement.
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