October 25, 2007 5:44 AM PDT
Red Hat voices concerns over Microsoft patent model
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While Red Hat welcomed Microsoft's recent decision to comply with the European Court of First Instance's antitrust ruling, Michael Cunningham, general counsel for Red Hat, stated that the company was still concerned about Microsoft's patent model.
"We are reviewing the European Commission's announcement in the Microsoft abuse case and congratulate the Commission on the improvements announced (on Monday)," Cunningham said in a statement. "Our enthusiasm is somewhat tempered, however, by concerns that the patent arrangements may have not been made compatible with open-source licensing, especially given the pro-competitive effects to consumers of the open-source model. Accordingly, we will be carefully reviewing the arrangements in the coming days as further details are announced."
Angelo Basu, a competition law specialist at Pinsent Masons solicitors, said Microsoft's compliance with the ruling will mainly have a positive effect on the European software industry.
The main impact on the industry will be to remove the uncertainty that would remain, had Microsoft appealed the European Court of First Instance's ruling to the European Court of Justice, according to Basu.
"Pending the appeal to the Court of First Instance, Microsoft took a tough line and sought to extract terms for interoperability information at a much higher rate than was acceptable to the Commission or competitors, and it might have been expected to carry on doing so, pending a further appeal, which could itself have taken many years to come to a final ruling," Basu wrote in an e-mail to ZDNet UK. "Now it appears that there will be clear terms on which Microsoft will license its information so that businesses can go back to developing and selling software, rather than fighting with Microsoft."
Basu wrote that it is possible that Microsoft's decision will also send a signal to other IT businesses in a similar position to Microsoft that they ought to consider coming to a similar settlement with developers with which they may be in dispute.
The settlement will also have given the European Commission renewed confidence that it can take effective action against other companies that are reluctant to share interoperability information, or that put a high price on it, Basu said.
The decision will also have a positive effect on European open-source developers, as Microsoft seems to be guaranteeing that it will not pursue developers for alleged patent infringements, but instead will concentrate on software distributors and end users, Basu said.
"This is likely to be effective in removing the threat of litigation from the legions of independent open-source developers who would be least able to defend costly lawsuits and would therefore be most likely to be deterred from carrying on innovating and developing new products," Basu wrote. He added that the decision will focus Microsoft's resources so that commercial developers and distributors that decide not to accept the licensing terms will be put on notice that Microsoft will be able to pursue them.
"As with the Commission's action against IBM in the 1980s, it is likely that the Commission will believe that this investigation and the remedies coming out of it should be a 'one time, last time' solution so that it will not need to revisit Microsoft's conduct," Basu said. "This suggests that, short of any egregious behavior by Microsoft in a way which is not covered by the settlement, there will be little room left for distributors to argue to get more than what the Commission has extracted from Microsoft."
Tom Espiner of ZDNet UK reported from London.
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