May 18, 2007 8:02 AM PDT
Week in review: Microsoft's patent offensive
The software company is claiming that free and open-source software violates 235 of its patents. In an interview with Fortune, Microsoft top lawyer Brad Smith alleges that the Linux kernel violates 42 Microsoft patents, while its user interface and other design elements infringe on a further 65. OpenOffice.org is accused of infringing 45, along with 83 more in other free and open-source programs, according to Fortune.
It is not entirely clear how Microsoft might proceed in enforcing these patents, but the company has been encouraging large tech companies that depend on Linux to ink patent deals, starting with its controversial pact with Novell last November. Microsoft has also cited Linux protection playing a role in recent patent swap deals with Samsung Electronics and Fuji Xerox. It has also had discussions but not reached a deal with open-source company Red Hat.
Microsoft could have several motives for rattling its patent saber: slowing down open-source rivals, raising fears of open-source legal risks among customers and winning payment for technology the company believes it deserves from a group that's generally been unwilling to pony up.
But according to Horacio Gutierrez, vice president of intellectual property and licensing at Microsoft, the company's move is designed to bring parties to the negotiating table that currently aren't there.
The software maker's more aggressive attempt to persuade open-source software companies to license its know-how follows some frosty responses to Microsoft's controversial patent deal with Novell last year. As an example of what it would like to see, Microsoft points primarily to the Novell patent deal struck in November, in which Microsoft is selling coupons that permit use of Novell's Suse Linux Enterprise Server along with the assurance that Microsoft won't assert its patents against customers.
But industry experts said the declaration's implicit demand--that companies with open-source software should figure out what Microsoft patents they're infringing and come to the negotiating table--is unrealistic at best. In general, searching for potential software patent violations isn't practical, given the number, breadth and opacity of patents in the United States.
In fact, searching for potential patent problems can actually leave a company financially exposed: if a lawsuit concludes a patent was infringed, a company or individual who knew about the potential infringement must pay triple the financial damages that would be paid by an unknowing infringer.
The developments had CNET News.com readers railing against Microsoft, open-source software and even the current state of the U.S. patent system. But some readers echoed the frustration brought on by the accusations.
"If every software developer had to review every patent on which he/she might be infringing before writing or releasing code, it would no longer be possible to develop software in the U.S.," one reader wrote to News.com's TalkBack forum.
Meanwhile, the U.S. Congress took a small step toward revising what many large computer industry companies charge is a broken patent system. A House of Representatives subcommittee overseeing intellectual-property law approved by voice vote the so-called Patent Reform Act. The bill's sponsors and the Silicon Valley set have hailed the measure as an effective approach to reducing excessive litigation, improving patent quality and discouraging inflated licensing agreements.
Microsoft this week also raised its stake in the advertising industry. The company on Friday announced that it would pay $6 billion to acquire digital-marketing company Aquantive to help it support more advanced advertising products and technologies in media planning, video-on-demand and Internet television.
Earlier this week, ad giant WPP Group said it would spend $649 million to buy digital marketer 24/7 Real Media, in which Microsoft was rumored to be interested. Last month, Google announced plans to acquire digital-advertising company DoubleClick for $3.1 billion, and Yahoo followed that up with its own acquisition announcement--a $680 million deal for Right Media.
New vision on patents
If Microsoft is worried about taking a hit on software sales, you wouldn't know it by the way the company heralded the sales performance of its new operating system.
Microsoft has sold almost 40 million copies of Windows Vista so far, Bill Gates told a crowd of hardware developers. That's more than the total install base of Windows' largest competitors, Gates quipped as he began his keynote at the Windows Hardware and Engineering Conference (WinHEC).
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