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12.18.11

Groklaw on MOSAID (Patent Troll for Microsoft)

Posted in Microsoft, Patents at 11:54 am by Dr. Roy Schestowitz

Reports on the Lala land of SCO-like patent trolls with Microsoft strings

French hills

Summary: Interesting new articles from well informed reporters at Groklaw

LAST week there was an interesting report about MOSAID, whose relevance to Linux/Android we explained many times before. Groklaw has a very good article on the subject and to quote just a bit:

It appears we will soon be finding out a lot more about the Nokia-Microsoft deal and the Microsoft-Nokia-MOSAID agreement and the entire Microsoft patent strategy against Android.

The International Trade Commission has granted [PDF, 70 pages] Barnes & Noble’s request that the ITC recommend that Barnes & Noble be granted international assistance from the Ministry of Justice of Finland under Article 3 of the Hague Convention to obtain testimony from Stephen Elop, CEO of Nokia, and other key executives of the company, as well as help to obtain certain documentary evidence, like the signed agreements between the three entities Microsoft, Nokia and MOSAID.

The ITC also granted Barnes & Noble’s request for permission to seek evidence from MOSAID Technologies, a Canadian corporation, via a letter rogatory. The Administrative Law Judge ruled [PDF] that it was evidence that is “reasonably necessary to investigate fully Barnes & Noble’s affirmative defense of patent misuse against” Microsoft, so he recommended to the US District Court for the District of Columbia that it issue the letter rogatory.

Why two different processes? You go one way if the country, like Finland, is a signatory to the Hague Convention, and another way if the country, like Canada, is not. Remember that these are both requests, not demands. Canada can say no. In theory, so can Finland, but given the treaty involved, it would seem it would be unlikely.

We saw that coming long before any major Web sites paid attention to the issue.

Also in the same site there is an update on Lodsys, which got patents from Microsoft’s patent troll. To quote a portion:

Although the Lodsys cases continue to remain in the early stages, with jockeying between the plaintiff and defendants, we are continuing to see shakeout. Most recently Trend Micro has been dismissed from the Lodsys v. Brother case without prejudice, and adidas, Vitamin Shoppe, and BestBuy have been dismissed from the Lodsys v adidas case without prejudice. In each of these instances, the dismissals have made reference to the defendant’s reliance on products/services from ForeSee (or in the case of BestBuy, ForeSee and iPerception). In other words, ForeSee (and iPerception) are moving into the position of indemnifying their customers from the Lodsys claims.

Microsoft is suing Linux by proxy and hardly makes denials anymore. It is in this light that we need to invoke antitrust and reform, which Pamela Jones is not too optimistic on because:

Groklaw had two eyewitness reporters, RFD and Webster, at the oral argument of Mayo Collaborative Services v. Prometheus Laboratories Inc. on Thursday at the US Supreme Court, and each provides impressions of the experience. I’ll show you in a minute. All the filings are at that link. The transcript is now available too, as is the audio recording, so you can follow along with as much detail as you’d like.

Readers have suggested that we keep the patent focus in this Web site, so we shall. But we do not do this from a lawyer’s (or paralegal’s) perspective as most of us are programmers. Maybe this makes Techrights more unique.

Quick Mention: Ryan’s Blog

Posted in Microsoft, Site News at 11:51 am by Dr. Roy Schestowitz

Holidays

Summary: A bit of promotion of a fairly new blog

RYAN from Techrights (he is considered the jester in the IRC channels) has a new blog and in it he describes some of his problems with Microsoft, which once made him a Microsoft MVP.

Here is the latest rant, “Microsoft to auto-destroy many copies of Windows with IE “upgrade””:

Regardless of what version of Windows the user has, an Internet Explorer update is always dangerous since Microsoft continues to claim it is a system component and not a web browser. It means that at best, you need to reboot your computer, and if the upgrade goes wrong it can mean anything from Internet Explorer not working to the Windows shell failing in inappropriate ways. Internet Explorer installations and upgrades have had a significant number of cases of destroying the operating system beyond being salvageable since at least Windows 95.

No decent operating system claims the web browser is an integrated component that can’t be removed. The Internet Explorer situation is a continuing monopoly abuse and Internet Explorer itself is a relic from the 1990s, when Microsoft tried killing Netscape by forcibly installing their own web browser into Windows.

Microsoft has proceeded to other forms of monopoly abuse, including the complicated patent wars which we will write about later.

Updates on Novell and Other FOSS Taxers

Posted in Microsoft, Novell, OpenSUSE, Patents, Turbolinux at 11:32 am by Dr. Roy Schestowitz

Summary: Bits of news about Microsoft helpers who put a patent tax on Free software

THE state of Novell continues to be tracked and will be caught up with later this month.

One of Novell’s products, Vibe/Pulse, was declared dead earlier this year, but Novell keeps uploading videos about it [1, 2, 3, 4, 5, 6]. It is probably not a marketing spillover because there are signs that Novell refuses to let this project go. Mixed messages for sure.

Disdain of Novell is a defence of the interests of FOSS because Novell forms a bridge for Microsoft to charge a tax/toll on FOSS. There is this new product coming from another company that does this. It is called Tuxera and it helps Microsoft tax file systems in Linux (and Android). We sometimes aptly call it “taxera”.

There is not much news from Novell, but those who try to keep abreast of things scrape some material that we will cover later this month. Novell won’t be named for much longer because it was bought. Then there is the story of Linspire/Xandros and Turbolinux, whose staff we find in new places:

Prior to Lyris, Luis oversaw global business development and sales at Turbolinux, where he led the launch of international subsidiaries in Argentina, Australia, Germany and the UK. Rivera also led international sales at IMSI, a publicly traded software publishing company, and business development at @Road, a mobile resource management solution provider.

In other news that we shall cover more thoroughly later this month, OpenSUSE (Attachmate) plans to have presence at FOSDEM despite the fact that SUSE is a bit of a pariah. To quote:

FOSDEM is the biggest event organized by and for the Free and Open Source (FOSS) community. Its goal is to provide developers a place to meet, come together and share and discuss ideas. The event happens 4-5 February 2012 in Brussels, Belgium. And there will again be a cross-distribution mini conference at FOSDEM this year. By organizing a mini conference where all distributions participate in we foster collaboration and cross pollination. You are hereby invited to hold a session.

This is actually quite harmless because it does not involve any of Microsoft’s trojan horses that Novell/SUSE is used for (e.g. Mono, Microsoft kernel drivers, OOXML). Let us know of any Novell news we might have missed (in comments/IRC).

Executive Director of The Economic Opportunity Institute Slams Microsoft for Not Paying Tax

Posted in Finance, Microsoft at 11:10 am by Dr. Roy Schestowitz

Design

Summary: Microsoft’s practices of tax dodging have not dodged the attention of people who address the problem

THE problems with Microsoft are numerous. We can only ever effectively address one at a time. Putting aside technical problems, there are also legal problems and Microsoft’s history shows complete disregard for the law. No company — even of comparable size — can really be named for that, mercenaries aside.

The Executive Director of The Economic Opportunity Institute writes an opinion piece which names Microsoft’s attitude toward taxation. To quote, Microsoft “still needs to skimp on taxes. By running its licensing sales through a shop in Reno, Nev., it avoids royalty taxes that could be funding high-quality schools for Washington’s children.

“The Legislature has enabled Microsoft to continue this ruse. Last year the state budget included a provision to ensure that only Microsoft’s licensing revenue from Washington state customers is taxable. For good measure, the Legislature agreed to an amnesty clause that legally prohibits the state from trying to collect back taxes owed by Microsoft before the narrower definition of taxable licenses was passed.

“So how much did public school students and their teachers and professors lose from this ruse? Somewhere between $100 million and $400 million a year for the past 15 years. (We can’t get much more accurate because we can’t see Microsoft’s internal corporate accounting.)

“Add the $104 million Microsoft got in tax deferrals from the state in 2010, and the $2 million it received in tax credits, and you are a long way along the path to figuring out the revenue problem in our state.

“Microsoft’s corporate counsel recently weighed in on the state’s budget woes: “It’s important for the state to avoid further reductions in higher education funding… It’s similarly important to maintain investments in K-12 education across the state…” Which, I guess, is (squishily) endorsing the proposed sales tax increase that would directly hit low- and middle-class families in the pocketbook. But it’s the waste, fraud and abuse in our own tax code that we should be going after — not the students at Everett High School, not the students at Everett Community College, not their teachers and professors, not their parents, and not their daily purchases.”

It is even worse than that because the legislation in place had former Microsoft folks responsible for it. They broke the system.

We have already explained this point along with many others in previous posts on the subject. One of the better sources of information on this subject is a former Microsoft employee who further explains:

1) $1.51 Billion in Tax Savings: Based on Microsoft’s own reporting, I estimate the company has saved $1.51 billion in taxes, interest and penalties since 1998. For the first time, we’ve published our entire analysis in a Google Docs spreadsheet: Financial History of Microsoft’s Nevada Tax Dodge.

This estimate includes the $104 million that Microsoft saved last year after Chair of the Finance Committee Ross Hunter, a former Microsoft Executive, led the Democratically controlled Legislature to drastically shrink the Royalty Tax from a tax on worldwide revenue to one based just on sales to Washington State customers. Hunter’s action will continue to cost the state more than $100 million annually going forward. Hunter even slipped in a section to grant Microsoft amnesty from its past abuses.

2) $4.37 Billion in Tax Savings: The Royalty Tax rate actually was 1.5 percent (more than three times higher) prior to 1998, but was cut in response to software industry lobbying. Scenario B in the Financial History shows that if not for its lobbying to cut the Royalty Tax from 1.5 to .484 percent, Microsoft would owe $4.37 billion in taxes, interest and penalties.

Separately he notes: “When I interviewed Microsoft’s General Council and Vice President Brad Smith in 2004 for Citizen Microsoft, he admitted the tax avoidance effort, while attempting to make light of its scope…”

So even Microsoft admits that it is doing this. But it does not really respond to queries about it. Once in 4 years when there are elections in the US it simply bribes the candidates (as we showed before) which keeps regulation at bay. That is a subject for another day. The “Occupy” protesters have legitimate reasons to be upset. Bill Gates and Microsoft hardly pay any tax. But the problem is even broader because more plutocrats and corporations receive exemptions they do not deserve and they use the media which they own to justify it with sound bites like “job creators”.

IRC Proceedings: December 17th, 2011

Posted in IRC Logs at 9:55 am by Dr. Roy Schestowitz

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