Summary: Competition crimes/violations from Apple and Microsoft in particular but also in general, exploiting the broken patent system in the United States

IN MONTHS or years to come we are likely to cover Apple's and Microsoft's patent attacks on Linux. It's really that old guard and a case of last resort in action. Apple and Microsoft have reached the point of actually collaborating (or colluding) in their fight against Linux/Android. They use some bogus patents, embargo based on fake evidence, extortion, and patent trolls.

No fruit, just lawsuits!

Apple fan sites, in their usual way, spin Apple as a "victim" by saying that "Apple [got] Sued by a Third Party using Powerful Patents from Palm & 3Com". To quote this fan site would be unwise, but it's just something to be aware of. The reality is, Apple has been threatening several Linux-based platforms over the years, always using patents. It also threatened Palm. So who is Apple to claim to be a victim of Palm patents? How silly do these fan sites have to be? The patents in questions are worse than a joke; they are an insult to the USPTO and a real harm to everyone who buys electronic products. Apple and Microsoft just generally cannot compete fairly, so as Google puts it (paraphrased) "when Microsoft’s products fail, it wields patents". The same goes for Apple, whose sales are falling behind those of several Android backers, even in isolation.

The problem with patents is widely understood. A OECD study says the quality of patent filings has fallen dramatically. To quote:

The quality of patent filings has fallen dramatically over the past two decades. The rush to protect even minor improvements in products or services is overburdening patent offices. This slows the time to market for true innovations and reduces the potential for breakthrough inventions, according to a new OECD report.

In other news of more minor relevance, things are not so rosy in India, either:

Reference to the name Upaid instantly reminds one of January 2009, the Satyam shock and class-action suits. The dispute between the two ended up with a tax issue, which was referred to the Authority for Advance Rulings (AAR). Among withholding tax issues, the AAR recently ruled on “hidden royalties”. Upaid was in the business of designing and developing software technology relating to payment-processing platforms and services. It conceived of an intelligent processing platform for which it outsourced the software development to Satyam. After all the agreements were done and dusted, two products — Call Manager and Net Manager — were developed. Patents were approved.

Two employees of Satyam also produced declarations that they had developed the patents which were assigned to Upaid, who turned out to be bad paymasters, forcing Satyam to acquire 22.06 per cent of its equity and offset its receivables. Disputes resulted in the termination of all agreements, with Upaid getting the intellectual-property (IP) rights and Satyam discontinuing software development.

Notice the terrible language in this article, not just "intellectual property" but also "develop patent". How on Earth does one develop a piece of paper with ink on it? This whole system seem to have become somewhat rotten, especially when nothing physical is produced (e.g. in the software industry), which implies natural abundance.

Dr. Glyn Moody has this good new analysts of the antitrust violations of Microsoft as well as those mafia-like tactics which we wrote about before (that make it racketeering too). To quote:

Why Barnes & Noble is an Open Source Superstar

As I've noted many times, one of the biggest threats hanging over open source is patents, because of the way trivial but indispensable software techniques have been patented in some jurisdictions (mostly the US). Things are made worse by the fact that vague threats can be made in this area, for example this famous assertion in 2007:

Microsoft General Counsel Brad Smith and licensing chief Horacio Gutierrez sat down with Fortune recently to map out their strategy for getting FOSS users to pay royalties. Revealing the precise figure for the first time, they state that FOSS infringes on no fewer than 235 Microsoft patents.

It's striking that Microsoft has never said exactly which patents it thinks free software infringes upon, although not surprising. If it did, it would be possible to see whether there were any likely infringement and, more damagingly for Microsoft, to look for prior art or other grounds for those patents to be revoked. By keeping everything as vague accusations, Microsoft gets the best of both worlds: it is able to imply that free software is in big trouble, but without running the risk of being proved a paper tiger.

That's what makes Barnes & Noble's principled stand against Microsoft's patent bullying so important. As PJ writes on Groklaw:

Barnes & Noble has done the world a tremendous favor, by pulling aside the curtain and revealing Microsoft's patent campaign tactics against Android in lurid detail.

It reveals the assertion of "trivial" and "invalid" patents against Barnes & Noble and some shocking details about an "oppressive" license agreement that would have controlled hardware and software design features that Microsoft presented, thus limiting to what degree Barnes & Noble could offer upgrades and improved features to its customers if it had signed it, features it says none of Microsoft's patents cover. Microsoft worked so hard to keep it all secret, and I think you'll see why. It's ugly behind that curtain.

[...]

However, the Barnes & Noble filing goes further than simply listing these patents: it also provides detailed information about prior art or other reasons why they are all invalid. But even if they were valid, they are pathetic in the extreme. That Microsoft is using such flimsy weapons against Barnes & Noble exposes how its whole approach is a sham. It is obviously hoping that the sheer effort and expense of fighting them in a long-drawn out court process will persuade manufacturers simply to roll over and license them as the easier option. And indeed, that has worked with companies like HTC and Samsung signing up, to their eternal shame.

Barnes & Noble, by contrast, emerges with considerable honour here, since it refused to buckle, and as a result is able to provide us with the first real glimpse into Microsoft's new strategy as a patent troll following the continuing failure of Windows Mobile in the market. And that is a key factor, as Barnes & Noble points out in its submission to the FTC (also on Groklaw), where it calls for a full anti-trust investigation into Microsoft's behaviour

The rest is worth reading. We are working on a petition to have Microsoft executives prosecuted for these acts. Rich powerful people never/rarely get prosecuted because of the bias of the system, but at least it makes a loud statement about the lack of justice. This raises awareness. ⬆