EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

05.25.07

The Economics of FUD

Posted in Courtroom, Deals, Deception, Finance, FUD, Intellectual Monopoly, Law, Microsoft, Novell, OpenOffice, Patents, Red Hat, SUN, Ubuntu at 9:13 pm by Shane Coyle

Once upon a time, I had opined that Microsoft’s true bounty in the Microvell deal was Novell’s complicity in Microsoft’s attempts to undermine the E.C. Decision and fines, and that the FUD was merely a bonus.

Apparently, I hadn’t any appreciation for just how much of an economic interest the monopolist has in using any and all means to defend their position for as absolutely long as possible. While reading through the Linux Foundation’s response to Microsoft’s recent patent saber-rattling, I was taken aback at the truly staggering sums involved:

In the time it will likely take you to read this article, Microsoft will have made $500,000 in net profit. It’s instructive to note that the majority of that profit comes from its Windows operating system and Office suite of business software. Not coincidentally, those are the two product lines most threatened by Linux operating systems and Open Office.

Given the high stakes involved, it’s not surprising that Microsoft would take steps to protect its turf. In fact, it makes perfect sense. Let’s face it: If you were making $1 billion a month, what would you do? Perhaps engage in rhetoric and hyperbole to generate some old-fashioned FUD (fear, uncertainty, and doubt)? Just looking at the numbers, it’s easy to see that even if the scare campaign merely delays a customer’s migration from Windows to Linux by a single day, Microsoft is $34 million dollars better off.

Think about that – just one week of Novell-Fueled FUD pays for all of those SUSE subscriptions (7 days @ $34M each = $238M, MS payed $240M for 350,000 SUSE subscription coupons). Each and every day that Microsoft has been able to use Novell’s capitulation to FUD Linux since November 9th 2006 has been pure profit.

Does anyone still really want to argue that Novell was the party of advantage, as evidenced by the relatively larger (but insignificant to Microsoft, as these number indicate) payment for the patent covenant?

As far as the statement from the the Linux Foundation, they have called on Microsoft ("a rational actor") to "work with the Linux ecosystem to restore confidence in the patent system by making sure they are issued only for truly unique, innovative, and novel functions that advance the state of the art." The statement also includes not-so-subtle reminders to Microsoft that they are not the only people to hold significant patent portfolios.

Joining in the patent cold war recently, on the side of Free Software and toting a significant and focused patent portfolio of their own, was Sun’s Jonathan Schwartz, who has pledged to rally to the aid of Red Hat and Ubuntu, if need be. (It should be noted that Sun engaged in a controversial deal with Microsoft back in 2004, in which Sun secured protection from potential IP claims regarding OOO by MS for only Sun StarOffice customers – sound familiar?)

Of course, neither Microsoft nor Sun want to truly test their spurious software patents in a court of law, but moments such as these allow us some insight into the dispositions, and motivations, of the "leaders" of the software industry.

In this case Microsoft, Novell and Sun all have a vested interest in the perpetuation of the software patent myth, and would prefer just an adjustment of the broken system.

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

2 Comments

  1. Roy Schestowitz said,

    May 25, 2007 at 10:53 pm

    Gravatar

    Good take on the main issues.

    What I cannot understand if what Zemlin has described in the past as “admiration” (IIRC) for Microsoft. We have seen some shades of this in Mark Shuttleworth recently. All in all, they seem to be constructive as long as no exclusionary contract is involved.

    Zemlin: “We ask Microsoft to stop engaging in FUD campaigns that only serve to undermine confidence in the U.S. intellectual-property system. Instead, please work with us to make the patent system tighter, more reasonable, and efficient for everyone in the software business.”

  2. Shane Coyle said,

    May 25, 2007 at 11:04 pm

    Gravatar

    If you are in the software business (or looking to be), you may do well to invest heavily in OpenOffice.org development – it seems that whichever company is the primary contributor to the codebase gets a visit (and a check) from MS legal in exchange for your tacit acknowledgement of their "IP"

    If you haven’t any morals, it could be a winning business plan.

What Else is New


  1. Links 30/8/2016: Fedora 24 Reviewed, Ubuntu Patched

    Links for the day



  2. Links 29/8/2016: Linux 4.8 RC4, Maru OS Source Code

    Links for the day



  3. Let Them Eat Patents

    A reality check regarding software patents and regarding those who truly benefit from an expensive patent system with an even more expensive litigation process/proceedings



  4. Nothing Whatsoever Has Improved at the European Patent Office, It's Just Summer's Recess (and Silence)

    The European Patent Office (EPO) has done absolutely nothing to improve the work atmosphere, it just alters the marketing strategy somewhat



  5. Links 28/8/2016: Q4OS 1.6, ConnochaetOS 14.2

    Links for the day



  6. The United States Has Gotten Over Software Patents

    A roundup of new articles about software patents in the United States, 2 years into the post-Alice era (the US Supreme Court deeming patents on software too abstract to have merit)



  7. More Lies From President Benoît Battistelli and the EPO Crisis Which Continues to Deepen

    The European Patent Office (EPO), collectively speaking, is still wrestling with a Battistelli infiltration (a circle of high-level managers) which habitually lies and viciously attacks those who dare counter these lies



  8. Links 27/8/2016: Torvalds and GPL, “DOD Must Embrace Open-Source Software”

    Links for the day



  9. Links 26/8/2016: Maru OS Resurfaces, Android More Reliable Than 'i' Things, PC-BSD Becomes TrueOS

    Links for the day



  10. Good Job, David Kappos, Says the 'Boss' (IBM)

    Responses to the latest call against Alice (eliminator of many software patents), courtesy of the man from IBM (still paid by IBM) who was responsible for the policy that blindly approved a lot of software patents in the US



  11. Being for Patent Quality or Against Patenting Excess Does Not Make You Anti-Patents

    Like IAM, which tries to portray sceptics and critics of software patents as "anti-patents", IP Watchdog (or Watchtroll as we call it) is 'trolling' the Electronic Frontier Foundation, simply because it expressed an opinion that patent maximalists cannot tolerate



  12. Erosion of Patent Quality Enables Patent Extortion With Large Portfolios of Low Validity Rate

    Revisiting the EPO's vision of poor patent examination and the effect of discriminatory granting practices, favouring patent bullies such as Microsoft (which actively attacks Linux using low-quality and usually pure software patents)



  13. The EPO's Francesco Zaccà Presenting in Turin Alongside Patent Trolls (Like the Patent Mafia Sisvel) and Lobbyists/Front Groups for Software Patents, UPC

    Benjamin Henrion (FFII) on seeing the EPO alongside patent trolls and other nefarious actors, doing what they do best, which is undermining public interests and harming patent quality



  14. The EPO, USPTO, and Patent Microcosm Peddle Myths About Patents in Public Universities and Research

    Tackling some of the commonly-spread myths about patents as "saving lives" and "promoting research" (in practice leading to the death of poor people and promoting trolls)



  15. Large Corporations' Lobbyist David Kappos Disgraces Former Employer USPTO by Meddling in Their Affairs on Software Patents, Downplaying the Supreme Court

    The latest lobbying from David Kappos, who blatantly exploits his connections in patent circles to promote software patents and work towards their resurgence after Alice v CLS Bank



  16. Journal of Intellectual Property Law and Practice Calls the European Patent Office “Rotten”, Other Sources Scrutinise Recent Moves

    The patent office which was once known for being the best bar none is rotting under the Frenchman Benoît Battistelli, who made himself and his friends the main clients of the Office



  17. PTAB Emerges as Hero of USPTO Because Quality of Patents Improves, Software Patents Are Effectively Dead (or Dying Once Reassessed)

    With help from the Patent Trial and Appeal Board (PTAB) -- not just patent courts -- software patents drop like flies by the thousands



  18. Creative Technology, Now Operating in 'Patent Troll' Mode, Shot Down by the ITC; Jawbone Too Shot Down

    Some good news from the U.S. International Trade Commission (ITC), which may have put an end to Creative's new war on Android (using old patents)



  19. Corporate Media in India Misrepresents Startups to Push for Software Patents

    A parade of misinformation as seen in Indian (but English-speaking) press this week as questions about patentability of software resurface



  20. Links 25/8/2016: Linux Turns 25, NetworkManager Turns 1.4

    Links for the day



  21. Links 24/8/2016: More From LinuxCon, Uganda Wants FOSS

    Links for the day



  22. Links 23/8/2016: GNOME 3.22 Beta, Android 7.0 Nougat

    Links for the day



  23. The Linux Foundation Gives Microsoft (Paid-for) Keynote Position While Microsoft Extorts (With Patents) Lenovo and Motorola Over Linux Use

    This morning's reminder that Nadella is just another Ballmer (with a different face); Motorola and Lenovo surrender to Microsoft's patent demands and will soon put Microsoft spyware/malware on their Linux-powered products to avert costly legal battles



  24. Not Just President Battistelli: EPO Vice-Presidents Are Still Intentionally Misrepresenting EPO Staff

    Evidence serving to show that EPO Vice-Presidents are still intentionally misrepresenting EPO staff representatives and misleading everyone in order to defend Battistelli



  25. Battistelli the Liar Causes a Climate of Confrontation in French Politics, Lies About Patent Quality (Among Many Other Things)

    Battistelli's lies are coming under increased scrutiny inside and outside the European Patent Office (EPO), where patent quality has been abandoned in order to artificially elevate figures



  26. The Collapse of Software Patents and Patent Law Firms Trying to “Overcome” Alice

    The United States continues its gradual crackdown on software patents (which are viewed as abstract and thus unpatentable), whereas in Europe things are murkier than ever



  27. Apple's Patent Wars Against Android/Linux Make Patent Trolls Stronger

    Apple's insistence that designs should be patentable could prove to be collectively expensive, as patent trolls would then use a possible SCOTUS nod to launch litigation campaigns



  28. Links 22/8/2016: Linux 4.8 RC3, Linux Mint 18 “Sarah” KDE Beta

    Links for the day



  29. Links 21/8/2016: Apple and Microsoft Down, Systemd Spreading to Mount

    Links for the day



  30. Links 20/8/2016: Android Domination, FSFE summit 2016

    Links for the day


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts