Summary: Decision regarding graphics to be made with readers’ consent, feedback
Any other suggestions would be welcomed. █
Patents Roundup: Patent Absurdity More Widely Understood, New Zealand’s Case Against Them Made Clearer, and Why Free Software Must Reject Them
Summary: The latest cases of patents intruding nations, interfering with economic sense, and turning Free/open source software into another monster
Today’s summary covers patents in general and software patents in particular. As predicted several years ago, software patents are pushing “open source” proponents to change themselves rather than fight back as they should.
The Economist Versus Patents
Patents make business sense to lawyers, but they rarely make business sense in general. Several famous economists, some of whom won the Nobel prize, are advocating the removal of patents (or at least some of them). The Economist has this new article which says that some patents do “more harm than good”. To quote just a part: [via]
George Church, a molecular geneticist at Harvard Medical School and a pioneer of whole-genome sequencing, is unpersuaded. Leaving aside the cystic fibrosis case, he says genetic testing benefits from incentives for innovation by luring in investors. He objects to the recommended reforms as “micro-manipulation of one small part of the patent system” that could have unintended consequences.
The film “Patent Absurdity” (mentioned already in [1, 2 3, 4]) is focused specifically on software patents and it received a lot of press coverage (more recently from Heise and eWEEK Europe). But another big battle over the issue actually takes place in New Zealand right now.
Software patents are a hot topic in New Zealand because they might be formally removed (explicitly excluded by scope).
The exclusion of computer software from a Patents Bill before Parliament is a step towards helping New Zealand become more innovative Labour MPs Lianne Dalziel and Clare Curran said today.
Later on, the same publication talks for patent lawyers, who of course want more patents of any kind.
InternetNZ is against software patents because it represents technologists, not lawyers.
InternetNZ (Internet New Zealand Inc) agrees with the Commerce Select Committee and Minister Hon Simon Power that software should not be patentable. InternetNZ outlined its position in a submission to the Committee in July 2009.
The New Zealand Computer Society polled its members and found that 81% supported the recommendation to remove Software from the Patents Act.
NZCS Chief Executive Paul Matthews said, “This is a big issue for the ICT sector. And whilst not scientific, this poll clearly backs up previous consultation showing widespread support from the ICT sector for the removal of software patents.”
We covered the views of NZCS in [1, 2, 3, 4]. It has been strongly against software patents all along. It’s usually a case of computer scientists versus lawyers who only pretend to serve them rather than tax them. Here in Europe we have this lawyers’ site promoting software patents a few days ago. They smell cash in more patent applications and lawsuits.
Although the UK and European patent offices have been granting patent claims that relate to computer programs for many years, a European Parliament rejected the proposed EC Directive on the Patentability of Computer Implemented Inventions (EC Software Patent Directive) in July 2006, which caused some controversy.
Corinne Day is a trainee solicitor who specialises in intellectual property law.
Well, Corinne Day should be focused on her field and not pursue what lawyers call “protection” with software patents. They pretend it’s a “protection” for software developers, but it’s really just protection of the lawyers’ way of life.
It is sad to find posts like this one from defeatists who are promoting “open core” and other such ideas (while occasionally denouncing the Free Software Foundation), listing Microsoft as part of “open source” and using this as reason to accept “intellectual property” like software patents (when it comes to “open source”, Microsoft is constantly changing what these terms mean using "promises" that it adds to software patents). To quote one portion of it:
In this future the notion of intellectual property will still exist, as will software patents (unfortunately). In this future, any software or services company, of any size, whether local or global has the opportunity to participate in the FOSS realm.
We must not accept software patents as they are incompatible with Free/open source software. The author is also using the term “intellectual property” rather than “copyright” and “patent”, which are separate and very different things. Free software relies heavily upon copyrights, but patents are antithetical to it. The use of the term “intellectual property” can also be found in this new post from OSS Watch. It’s part of the degradation we see among “open source” supporters, who turn it into another monster and encourage more of ZDNet’s typical FUD, which is debunked by The Source.
If anything, ”Open Source” is moving beyond “sexy” right into “required label”.
That label too is losing its uniqueness. The meaning changes and the OSI ought to fix this by intevening. █
Kin is the new Zin
Summary: How Microsoft failed — quite utterly in fact — to reignite interest in its mobile business; a leak of an Apple iPhone prototype leads to criminal investigation at the behest of Chairman Jobs and his morbidly-vain group
OUR previous two posts helped expose Microsoft's rather abysmal financial situation and systematic tax evasion (which it can pretend not to be an evasion because it controls the law through former employees and lobbyists). One area where Microsoft is/was losing billions of dollars would be the whole mobile business, whose losses Microsoft was trying to hide over the years using tricks that Microsoft Watch explained about 3 years ago (before it became a Microsoft PR outlet, post-morphing). More recently, the SEC started probing Microsoft about this allegedly inappropriate reporting of cash flow. People will hopefully be allowed to know what’s going on inside Microsoft (press releases are spin; they are rarely connected to reality, but reporters rely on them).
“More recently, the SEC started probing Microsoft about this allegedly inappropriate reporting of cash flow.”Pogson continues to write about the true impact of GNU/Linux on the price of Windows (and thus Microsoft’s financial performance). Sub-notebooks are an area where Microsoft’s competition is so great that Windows is given away almost for free and some sources say that Microsoft even pays OEMs to preinstall Windows (instead of charging for it).
Another area where Microsoft faces overwhelming competition is phones and as we showed last week, Microsoft stands not a chance with “Kin”. It’s just too far behind and the South African press seemingly agrees.
I just think that the company should be focusing its energies on getting Windows Mobile 7 out the door. The longer that OS is delayed the more customers Microsoft will lose and the more people will speculate that Microsoft doesn’t actually have a product to match the iPhone or Android.
More importantly, Microsoft can hardly charge for it, so what is its business model? Selling mobile phones as hardware? With designs like that (it seems like a Palm ripoff from ages ago), Microsoft’s mobile reality is a really gloomy one. Kin is nothing. It’s probably just another Zune (Microsoft can’t use this name for the phone because it’s tarnished just like “Vista” or “Live”), but this “Zune phone” enjoys far less hype than the Zune. A few days ago, Dvorak pointed out that:
We hear very little from [Microsoft's] outside agencies and almost nothing from the inside PR department.
Where are the exciting news stories about what the company is doing? This can’t be good for the company, it has always relied on a blanket of often obfuscating PR, especially when leading into the next generation cash cow.
Given Microsoft’s enormous debt, maybe it’s just not renewing contracts with PR agencies. The lack of buzz generated about Kin sure surprised us last week (we expected a massive blitz and journalists did too). Is this another sign of Microsoft’s demise?
Forbes has this new article which is titled “Microsoft’s Dismal Future” (it mostly speaks about phones, operating systems, and search).
Instead, since 2008 Microsoft has busied itself launching two very expensive operating system upgrades, Windows Vista and 7, in an effort to defend and protect its historical PC operating system business. They’ve been a huge investment, but both have won a less than enthusiastic response from the vast majority of users. Microsoft has turned to forcing new computer buyers to purchase them, since almost no one chooses to buy them. Additionally, it is in the midst of planning Office 2010, an enormously expensive upgrade of Office 2007, even though a huge number of customers still use Office 2003, completely ignoring or rejecting 2007 since it came available.
Instead of working hard to get into new growth markets, Microsoft, in the tradition of Xerox and Kodak, pours its talent, energy and money into trying to defend its PC operating system and office products markets, which have much slower growth and are under attack from new mobile devices.
Apple broke out of defending and extending the Macintosh platform, and Google avoided falling into merely defending the search business (unlike Alta Vista and AskJeeves). They did so by strategically using white space, meaning they’ve supported unfettered, unencumbered opportunities to pursue entirely fresh ideas and move them into solutions and then to the market quickly and effectively. Fundamentally, both companies are very different from Microsoft, because Microsoft hasn’t learned to use white space teams.
We are not proponents of Google or Apple. Both companies sell products and services that are proprietary (and sometimes painted as “open”). A few days ago Apple was sued yet again for its arrogant behaviour and shoddy products. This week we also learned that a police probe (no kidding!) was launched because secrecy was not honoured by Apple employees/partners.
Silicon Valley police are investigating what appears to be a lost Apple iPhone prototype purchased by a gadget blog, a transaction that may have violated criminal laws, a law enforcement official told CNET on Friday.
Apple is all about fake hype. It adds to the allure. It’s just hilarious when Apple has the police involved because its hype machine failed. If the “alien test” was applied (hypothetical extraterrestrials watching from above), Apple’s behaviour would make it akin to China’s [1, 2]. █
Summary: Even the Seattle Times, one of the local papers that sometimes seems to be Microsoft-sponsored propaganda, is starting to question what Microsoft is doing to Washington and how
THE PREVIOUS post showed that Microsoft has many reasons to avoid expenditures such as tax. To quote a key sentence, “Microsoft has a huge debt approaching a tenth of a trillion dollars.” Last week we added this Wiki page about Microsoft’s tax dodge and also evasion, for which it was found guilty in a court of law. Microsoft does not prioritise compliance with the law, so it’s probably a nonevent really.
A former Microsoft employee continues to expose the government cronyism that enables Microsoft to essentially legalise its evasion of tax (which can then no longer be labeled “evasion”). When former Microsoft managers write the law, why would the law paint Microsoft a “fraud”?
Struggling to close a $2.8 billion fiscal deficit, the Washington State Legislature ended its recent special session with two huge gifts for Microsoft:
1) It gave Microsoft an effective $100 million annual tax cut by revising the definition of the royalty tax. Under the old law, all of Microsoft’s $20.7 billion annual software licensing sales were taxable in Washington state at .484%. Under the new law, the royalty tax will be apportioned so that only the portion of sales to Washington State customers would be taxable, a tiny fraction of Microsoft’s taxable revenue.
2) It also gave Microsoft amnesty on an estimated $1.25 billion in unpaid taxes, interest and penalties that the company has avoided paying since 1997 by reporting this revenue from a small Reno, Nevada office. The state’s Department of Revenue has ignored this practice and refused to address precedents that call the legality of Microsoft’s accounting into question.
Most of the legislation was led by Chair of the Finance committee Rep. Ross Hunter, a 17 year veteran former employee of Microsoft.
Given that the Seattle Times waited until almost the close of the special session to acknowledge the dispute about Microsoft’s Nevada tax practice, we imagine that Chairman Gates has greatly appreciated this blog’s investigative work of his company’s tax practices and the quiet effective accomplishments of Rep. Hunter.
Please help promote this in Slashdot. It deserves more attention.
The Seattle Times, which is probably the Seattle publication that’s deepest in Microsoft’s pocket (we have explained just why on numerous occasions), says that “Microsoft chooses key time to remind Olympia of its clout” (we covered this in [1, 2]).
Microsoft insists the timing is coincidental.
Yet it chose Friday to publicize a study showing its massive economic effect on the state.
Not any Friday, but the Friday before lawmakers huddled for a last push to decide what taxes Microsoft and everyone else must pay to keep the state afloat.
This is actually part of quite a scandal and it deserves the front page of local papers (at the least). We wrote about this in length 6 days ago. █
[Update: A reader points out that "the graph is of cumulative debt. Which equates with MSFT having around $6Bn debt from being debt free in Q2 2008."]
Summary: Microsoft’s debt — like Novell’s debt — is a scarcely-explored subject in the media, but we’ve finally found the latest figures
OUR WIKI now contains this page about Microsoft’s financial situation. It is not what many people imagine it to be and last year we pointed out that Microsoft has debt. Yes, it’s true. We just couldn’t quite tell at the time how big the debt was, but now we have a clue. Here is some background reading:
- Shareholder Likens Steve Ballmer and Bill Gates to Bernard Madoff
- Did Microsoft Pay Millions of Dollars to Hide Information About Financial Malpractice?
- The SEC is Going After Microsoft (Again), Not Just Goldman Sachs
- Microsoft Has No Money Anymore
- Microsoft 2.0: A Company of Debt
- Financial Fraud Claimed at Microsoft; Microsoft Paid Microsoft Witness to Shut Up
- Charles Pancerzewski and Microsoft Fraud Revisited (Updated)
Business Insider shows data from a reliable source, indicating that Microsoft’s debt is going through the roof (increasing faster than Microsoft can keep up with). Read the numbers. While Google and Apple have no debt, Microsoft has a huge debt approaching a tenth of a trillion dollars. Microsoft relies on shareholders to put their money in this pit.
Tech companies, which generally throw off tons of cash, added a healthy sum of debt to their balance sheets last year, the Wall Street Journal notes.
We are increasingly welcoming a world where companies with a sort of overdraft claim to be “cash rich”. It’s the same world where a country with 14+ trillion dollars in debt pretends the problem will just go away and asks Microsoft to create computer games to mitigate perception issues [1, 2].
“While Google and Apple have no debt, Microsoft has a huge debt approaching a tenth of a trillion dollars.”Microsoft’s debt is not so unusual, but it is far greater than the rest. Novell’s own debt is an issue we explored last year.
Many of Microsoft’s business units make no money. They just lose a lot of money, but people continue to think about Windows and Office, which are the exception, not the norm. These are cash cows whose revenue is actually declining (Office revenue is still going down). We mentioned this some days ago when we cited Joseph Tartakoff, but as Tartakoff later points out (regarding the same article of his that he tweeted about 4 times): “Microsoft’s online losses up to a staggering $713 million, from $411 million a year ago” (this is not surprising at all).
That’s the loss in just one quarter and one business unit! It used to be over $2 billion in losses per year, now it’s around $3 billion in losses per year, assuming this new pace of losses carries on.
More information about Microsoft’s real financial performance is coming soon. We are going through reports and interpreting them. It doesn’t look too good.
Microsoft keeps taking on debt, whereas some of its biggest competitors remain debt free. Terry Porter writes: “It’s interesting that Google and Apple both deploy Unix and are debt free, so perhaps using Unix must be good for business?” █
“Microsoft, the world’s most valuable company, declared a profit of $4.5 billion in 1998; when the cost of options awarded that year, plus the change in the value of outstanding options, is deducted, the firm made a loss of $18 billion, according to Smithers.”
–The Economist, 1999
Summary: Clarification about the site’s current scope as far as Novell is concerned
TO repeat an important point that was missed by some readers (who still inquire), this Web site was not rebranded; Boycott Novell is still on and it is part of the scope of Techrights. Boycott Novell was all along covering a variety of issues beyond Novell.
If anything, now that weekly news summaries are gone, we expect to have more posts about Novell, not less. Novell issues will be addressed as soon as they come. █
Summary: IBM missed an opportunity to reward the father of GNU/Linux appliances, which is also not paying Microsoft for Linux
IBM, which loves to portray itself as an innovative company even decades after it helped invent some fundamentals of computing, has been getting close to Novell recently [1, 2]. But IBM merely rewards an imitator and possibly pretends that Novell has something to do with appliances. Sutor writes about “Appliances and Linux”, claiming that “This can be done manually or more easily via a tool like Novell’s SUSE Studio.” (we too had our SUSE appliance)
Had IBM cared about originators, it would then go to the source. Novell has a history of just copying other people’s ideas (sometimes even partners like Astrum) and then mass-marketing the copycats, pretty much like Microsoft does. IBM could have gone with rPath developers, whom Novell simply copied while shamelessly and falsely claiming credit for their ideas. █