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08.05.10

Microsoft Extorts Salesforce: Salesforce to Make Sales, Microsoft to Make the Money

Posted in GNU/Linux, Microsoft, Patents, Servers at 3:38 am by Dr. Roy Schestowitz

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Summary: Another timely lesson about the harms of software patents, which help Microsoft extort its rivals without ever taking them to court and having the patents tested

SOFTWARE patents are a nasty thing. In fact, over in Australia (and now in Slashdot) Ben Sturmfels works towards abolishment of software patents (for background see [1, 2, 3]). This is important because of precedence. In light of this heroic Australian action, OStatic brings up Sun’s Schwartz’ testimony about Microsoft extortion from Gates and Ballmer.

Schwartz goes on to detail a meeting he was in with Bill Gates and Steve Ballmer from Microsoft, in which Gates allegedly “skipped the small talk” and said: “Microsoft owns the office productivity market, and our patents read all over OpenOffice.”

The move by Australian software leaders to abolish patents seems a little over the top. Some ideas scream out for patents, and many software titans have been built on fairly patented software. Still, if anyone has any question that software patents get exploited, Schwartz’s post called “What I Couldn’t Say” is worth rereading.

Microsoft racketeering with software patents [1, 2, 3, 4, 5, 6, 7] recently hit Salesforce, which Microsoft sued with software patents for no apparent reason other than greed (it was sued by Salesforce in return). Salesforce uses GNU/Linux just about everywhere, at least on the server side. According to this press release from Microsoft, Salesforce allowed Microsoft to have itself extorted. Yes, Microsoft has once again successfully extorted using software patents and Mary Jo Foley says that ‘[w]hile the terms of the agreement aren’t being disclosed “Microsoft is being compensated by Salesforce.com”.’

The press calls it a “settlement”, but it doesn’t quite capture the fact that Microsoft is being paid a ‘patent tax’ by Salesforce (it’s the same with TomTom, which shows Microsoft becoming a Linux-sucking leech). From the Wall Street Journal:

Microsoft Corp. (MSFT) and Salesforce.com Inc. (CRM) announced Wednesday a settlement to their patent suits against one another, ending a three-month tussle the two software companies had over various software patents.

More on this racketeering:

In other news, a ‘company’ (patent troll) that sued Microsoft for patent violations didn’t get its way.

It is possible that Salesforce would have won against Microsoft in court, but litigation is expensive. By issuing threats/lawsuits Microsoft has managed to turn Salesforce into a cash cow, using just a few papers with the USPTO’s rubber stamp.

Software patents need to die because they destroy the software industry and only empower monopolies.

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12 Comments

  1. Florian Mueller said,

    August 5, 2010 at 5:10 am

    Gravatar

    My position on software patents is still the same, but concerning the way they are used, I think this here isn’t the worst-case scenario. In fact, it would be great news if the different companies against whom IBM holds certain mainframe-related IPRs could also get a license deal and then grow their business — but IBM, unlike Microsoft, doesn’t allow competitors to do that unless, hopefully, forced by regulators to grant licenses on FRAND terms.

    If IBM could content itself with being only what you, Roy, call a “leech”, that would be a fundamental improvement.

    Dr. Roy Schestowitz Reply:

    IBM leeches a lot using patents. Last time I checked, they make about a billion dollars per year just from patent tax (and Phelps had a role in it).

    twitter Reply:

    RAND is not acceptable either, especially the way Microsoft wields it. In fact, RAND is a propaganda term that should be avoided.

    … It is true that these licenses do not discriminate against any specific person, but they do discriminate against the free software community, and that makes them unreasonable. Thus, half of the term “RAND” is deceptive and the other half is prejudiced. Standards bodies should recognize that these licenses are discriminatory, and drop the use of the term “reasonable and non-discriminatory” or “RAND” to describe them. Until they do so, writers who do not wish to join in the whitewashing would do well to reject that term. To accept and use it merely because patent-wielding companies have made it widespread is to let those companies dictate the views you express.

    If you care about your sanity, privacy, software freedom and other basic rights dependent on a free computer/network you might also replace Windows 7 with GNU/Linux or other free software. Either way, you should not pretend that there is anything fair or reasonable about software patents.

    twitter Reply:

    It is difficult to reconcile Florian’s thoughts. I just noticed where he says,

    I’d only be concerned if someone suspected me of supporting an agenda that is anticompetitive and harms innovation … [and] In particular, I don’t want software patents to hurt either category [free or non free]. More importantly, I want FOSS to put competitive pressure on everyone because that will ensure that I also get to buy high-quality proprietary software at reasonable prices. I believe in choice.

    The FSF has made a reasonable case that fee only licensing that Florian advocates as “RAND” always discriminates against free software. The news about Salesforce demonstrates that damage is also done to non free software, thereby reducing the “choice” Florian seem to value over his freedom. Florian’s “Focus” on IBM, Groklaw and other organizations on the Microsoft hit list is looking harder to justify in reasonable terms. An honest person with his goals has to conclude that software patents are always bad and work to eliminate them rather than selectively chase offenses.

    twitter Reply:

    ack bad formatting. the passage above should have Florian’s statement clearly quoted:

    “I’d only be concerned if someone suspected me of supporting an agenda that is anticompetitive and harms innovation … [and] In particular, I don’t want software patents to hurt either category [free or non free]. More importantly, I want FOSS to put competitive pressure on everyone because that will ensure that I also get to buy high-quality proprietary software at reasonable prices. I believe in choice.”

    This should be obvious to anyone who follows the link provided.

    Dr. Roy Schestowitz Reply:

    Well, Florian is against software patents, but I don’t agree with his approach (respectfully). It was earlier that I found this submission about Salesforce. He still uses Slashdot to slant stories and push his agenda. Florian is spreading FUD against GNU/Linux in this case, because the deal/settlement is not about Linux. the FFII called it “‘Linux tax’ troll post”, which is funny because the FFII is in some way a succession of Florian’s work (it just took his campaign a few years ago) and here it is labelling Florian’s submission “troll”.

    Florian Mueller Reply:

    For the sake of accuracy:

    The FFII started the fight against software patents long before me. I became aware of the problem in the EU because of the FFII. I later handed my NoSoftwarePatents campaign to them, but still, they’re not just a succession of my work.

    Concerning the fact that Salesforce recognized a need to pay royalties for patents that read on Linux, we discussed that on Twitter yesterday and I believe that my interpretation is right.

    It’s not about FUD.

    The FFII Twitter account is used by multiple people. The most likely one to say that kind of thing about me there is “arebenti”. He’s been against my work all along, going back to the year 2004.

    I’ve mentioned the Salesforce deal in my most recent blog posting (on Microsoft’s use of patents):
    http://fosspatents.blogspot.com/2010/08/microsofts-use-of-patents.html

    Dr. Roy Schestowitz Reply:

    Defending Microsoft’s patent extortion is delusional at best. I will post a quick rebuttal later.

    Notice that IBM did not sue anyone and it actually gives lists of patents when inquired (Microsoft didn’t when it comes to Linux, which it sued through companies).

    Florian Mueller Reply:

    @twitter I don’t have a hit list based on who competes with Microsoft but based on my priority focus on exclusionary use (and, as a #2 topic, hypocrisy).

    twitter Reply:

    Please do not misscharacterize what I say, Florian. I do not know if you have a hit list to match the lists of journalists and websites you publish to, but I can say Microsoft does. Microsoft email exposed in court show that Microsoft’s hit list is basically the rest of the world with resources focused on key areas through programs like EDGI, Comphot and many, specialized lobbying groups. Tim Bray, Peter Guttman, Peter Quinn, Richard Stallman and PJ can also tell you that Microsoft’s hit list can be very personal.

    In your latest blog post you summarize your strained defense of Microsoft’s patent extortion,

    Microsoft doesn’t use its patents in a destructive way. They don’t just sit on their patents without doing nothing, but they’re a cooperative right holder who doesn’t use them to shut out competition.

    This opinion is not supported by Microsoft’s private letters and public statements about their schemes to exclude and destroy free software.

    Confronted with facts, you and fellow patent supporters have turned to smears. You had the nerve to republish nonsense from Forbes claiming that Groklaw and the FSF are corporate stooges. You then attempt to smear Roy by linking to Dana’s article that makes fun of you calling PJ an IBM troll. Dana is also a patent supporter and his comparison of your charges and Roy’s do Roy a great disservice. Roy’s assertion that your efforts serve Microsoft’s interests is reasonable and well supported. People who defend the indefensible always dip to the personal level because the facts do not support what they would like to prove.

    The threat Microsoft poses to free software can not be judged one issue at a time any more than their actions occur in isolation. Microsoft’s legal, technical, and social attack on the rest of the world, particularly free software, must be judged as a whole. Together, these things make Microsoft the primary threat to free software outside of the general decline of democracy in the Western world. Microsoft is a failing company but it is still a dangerous one. It should be noted that Microsoft and partners are chief collaborators with Communist China and are happy to see network and software freedom removed elsewhere too.

    Dr. Roy Schestowitz Reply:

    PJ has some questions for Florian now.

  2. twitter said,

    August 7, 2010 at 7:39 pm

    Gravatar

    PJ also covers Eban Moglen’s keynot at LibrePlanet 2010, where he talks about forming alliances with companies that depend on and contribute to free software.

    We need to think about the grand strategy of our continued forceful campaigning for free as in freedom. But we also need to be extremely aware of the extent to which we can now capitalize upon the achievements we have already set up and the alliances with forces not necessarily concerned with freedom that our technological sophistication has brought to them. … Microsoft will continue to attempt to get paid for what we do, by forcing people — or quasi-forcing people through intimidatory conduct — to take patent licenses to run our software….If we are to quell this nuisance we can only do so in cooperation with others who see clearly that this is a threat to the welfare of their customers.

    This is quite a relevant topic. The trouble people some people are making for Microsoft competitors who are also natural free software allies is right in line with Microsoft’s usual divisive policies. I see above even some of the usual BSD vrs GPL trolls. None of us should surrender our software freedom to any company, but we can encourage companies like IBM, Google and others that are not outright hostile to software freedom to continue their genuine march toward software freedom. Convicted felon, Microsoft, should never be trusted or paid because they are the worst of the exploiters. I look forward to a company ranking page similar to the FSF software license explanation page.

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