06.04.10

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Architect of Microsoft’s Patent Strategy Has Left the Building

Posted in IBM, Microsoft, Novell, Patents, Red Hat at 1:28 am by Dr. Roy Schestowitz

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The world`s largest troll, Norway

Summary: Marshall Phelps left Microsoft after equipping it with a software patents portfolio similar to the one he created for IBM

OVER a year ago we alleged that Microsoft's Marshall Phelps had failed to sign Red Hat on a patent deal and was therefore dismissed. The closest Microsoft ever got to ‘taxing’ Red Hat was its Amazon deal and maybe that case involving Acacia (assuming that Microsoft was a backer). As rightly pointed out in this new post, software patents are antithetical to software freedom.

Few topics can illicit a more guttural response from an open source advocate than the topic of software patents. In many respects they are the very anti-thesis of open source. In security there has been one particularly irksome patent that has bedeviled the industry for years and probably held back innovation and progress in gateway anti-virus technology. Now after all these years, as many have claimed in the past, the patent is on the verge of being over turned as invalid. The best news is that it very well may have been the open source community that showed it as invalid!

We now have it confirmed that Phelps left Microsoft and according to the following new article, Marshall Phelps left Microsoft after helping their anti-Linux strategy and doing similar work at IBM (which is also in favour of software patents). From Law.com: [via]

Last week, MDB Capital Group–an IP-focused investment bank that promises to help investors understand “the hidden value of intellectual property assets and future technological leadership”–held what it billed as its first annual “Bright Lights” intellectual property conference, bringing together IP-centric speakers from a variety of small and medium-size companies.

The Prior Art attended the opening panel, which included the heads of two of the largest, and most litigious, patent-holding companies—Erich Spangenberg and Paul Ryan, the CEO of Acacia Research Corp., the largest publicly traded patent-licensing company.

The panel also included representatives from consultancy ipCapital Group and RPX Corp., which buys litigated patents in order to strike deals between NPEs and operating companies, as well as IP guru Marshall Phelps. (Phelps is something of a legend for building IBM’s legendary $2 billion patent-licensing operation; most recently, he helped Microsoft build up a patent-licensing operation before leaving the company last year.

When Phelps was in Microsoft they managed to sign the patent deal with Novell and later on he wrote a book on the subject.

Novell poses a risk to Free software [1, 2]. Novell’s patents become ammunition against GNU/Linux itself and Nortel — a company whose name is similar to Novell — is in a similar situation: [via]

Nortel may raise $1.1 billion from patents

Nortel Networks Corp., the insolvent Canadian phone-equipment maker, may get as much as $1.1 billion (U.S.) for technology patents that analysts say would benefit potential bidders including Research In Motion Ltd.

Several days ago Florian Müller openly criticised the OIN, which is part of IBM’s reason/excuse to keep software patents in tact. “Mueller calls OIN a scam,” says the headline at ZDNet. It’s an overstatement. It also says:

Much of what Mueller has been doing of late is setting himself as an active FOSS advocate, and that’s a good thing.

That’s still in doubt (FOSS advocacy), but the agenda which favours abolition is clear and that’s the right route to take. In his latest post he proposes a grading system for conduct, suggesting that companies get classified for their attitude towards software patents.

Harmfulness ranking of ways to use software patents

[...]

That trend isn’t difficult to imagine. Just look at the current situation surrounding smartphones, a field in which there’s now a number of lawsuits and countersuits among big players as well as different non-producing entities (“patent trolls”) targeting large vendors.

In light of all that’s going on, which ways to use software patents are more harmful than others? After giving it some thought, I have arrived at this harmfulness ranking:

1. most harmful: malicious strategic patent holders pursuing exclusionary/anti-competitive objectives

2. second-most harmful: non-producing entities (“patent trolls”)

3. least harmful: cooperative strategic patent holders granting licenses to entire portfolios on acceptable terms

[...]

“Trolls” are a feature — not a bug — of the software patent system

The above subhead is a summary of a statement that Carlo Piana, a leading European FOSS lawyer, recently made on identi.ca/Twitter.

If one believes that certain general ideas should be “monopolizable” through patents, then it’s a natural consequence that some will obtain (or acquire) patents and try to derive commercial benefits from them without ever creating their own products. Far be it from me to defend the concept of “patent trolls” — I just want to point out that it wouldn’t be practical to impose an obligation on every patent holder to make actual products. At the most it might be possible to limit the procedural rights of a non-producing entity to the right to be indemnified (excluding injunctive relief).

Companies that still defend software patents are not genuine proponents of software freedom. And yet, it is better to meet half way and accept the fact that companies can change over time.

“Other than Bill Gates, I don’t know of any high tech CEO that sits down to review the company’s IP portfolio.”

Marshall Phelps

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2 Comments

  1. NotZed said,

    June 4, 2010 at 3:01 am

    Gravatar

    “Few topics can illicit a more guttural response from an open source advocate than the topic of software patents. In many respects they are the very anti-thesis of open source.”

    Bullshit. ‘open sauce’ says nothing about patents.

    Antithesis of free software yes, but not at all for open sauce.

    Dr. Roy Schestowitz Reply:

    IDG does not use the term “free software” unless it’s freeware, but I think the author intended to say “free software”.

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