"Intellectual property is the next software."

--Nathan Myhrvold, Microsoft patent troll

Summary: Windows cannot compete with cheaper, better, freer competition; TomTom revisited

Old Software Paradigms Be Damned

PROGRAMMERS AND OTHER PEOPLE had actually been sharing code before proprietary, closed-source software came about. Then emerged a new method for distributing software, but it predated the World Wide Web (WWW). Nowadays, with old protocols like FTP and also newer ones such as bittorrent and P2P, the economics of media -- much like the economics of software -- are changing. As the media industry has learned the hard way, it is a simple case of "change or perish." They absolutely must evolve; the sooner, the better. Having realised that bullying one's customer is a poor and unsustainable business decision/strategy, the conglomerates more recently attempted a model wherein the scarce elements, namely concerts and merchandise/memorabilia, are sold along with the privilege of access to music (unlimited). This is similar to the services model (a la Red Hat) whereas DRM or subscription to streams may be more similar to SaaS in the world of computing.

At present times, Microsoft is coming to grips with what the music industry has been wresting with for quite a delirious period of prolonged agony and maybe constant collapse. But Microsoft is still in its earlier stage of demise where the customers are being bullied or sued. Unable to counter what it calls "Linux infestations", Microsoft is hopelessly trying to create artificial scarcity inside 'its' software market, using software patents that pertain to thought alone, i.e. no device present [1, 2] even though it's necessary.

MarketWatch has this new column on why Microsoft's business model is bound to fail (and already fails, for a fact).

I've been playing with one of many new systems that are hitting the market which allow the user to quickly boot the machine and go directly to a small version of Linux rather than wait to load Windows.

[...]

Until now, the average computer user has been ignoring this trend. But the economic conditions and the emergence of powerful inexpensive computing has to make people rethink the Microsoft proposition.

If Intel can provide users with powerful little systems for $99 and has been pushing prices lower and lower over the years, why can't Microsoft? Intel makes elaborate hardware in billion-dollar factories. Microsoft stamps out a disk.

This discrepancy has to end soon.

It's a dilemma which revolves around the question of scarcity. Software can be duplicated, hardware cannot. In order to impede this natural trend Microsoft has resorted to creating or reinforcing imaginary property (software patents). The company lobbies very hard for them, even in Europe [1, 2, 3].

In order to compete properly, Microsoft will have to find new ways of making money from gratis software. Dumping techniques (e.g. [1, 2, 3, 4, 5, 6, 7, 8, 9]) have a limited shelf life, but as Carla wrote just earlier on, Microsoft calls in the lawyers and MBAs, not the engineers.

I don't know about American business as a whole, but it sure does describe some of the major players in tech, and the idea of Microsoft sending people to a conference to wring their hands and lament "Oh dear, the country is like all too greedy and shortsighted, and what ever shall we do?" is so ludicrous I laughed out loud. It's like alcoholics and gambling addicts ranting about "the trouble with people is they have no self-control." It's like serial killers complaining about how people are too violent and bloodthirsty. It's like cats criticizing dogs for eating poop. Ok, so maybe in cat culture there is a significant difference between licking one's own behind and eating poop, but to me it's a pretty meaningless distinction.

In another sterling example of diversion and lack of self-awareness:

"Josephine Cheng, an IBM vice president and fellow at its Almaden Research lab, suggested the problems in the U.S. were partly because we have "too many MBAs and lawyers. We need to go back and focus on basic science, technology and education and don't [encourage] so many people" to become MBAs and lawyers.""

While it's fun to pick on the MBA kids and lawyers, it's still missing the point by a few orders of magnitude. Who hires all those MBAs and lawyers? Why would any smart American kid want a tech career with a big company? The tech industry has destroyed many of the legal protections that US workers fought for decades to gain.

This is apparently where Microsoft wants to be. To quote Arno Edelmann, who is Microsoft's European business security product manager, "usually Microsoft doesn't develop products, we buy products."

So, is Microsoft really much of a software company? Based on its lawsuit against TomTom, it is not. As Google pointed out some days ago, patent applications too are nowadyas being written by lawyers and that's just what Microsoft bets on. How sad.

What Microsoft Was Hoping to Achieve

As Jeremy Allison explained it, Microsoft had potentially chosen to challenge the GPL and it chose a target which is less able to afford defence of the GPL (TomTom itself is a former GPL violator). Microsoft may also have embraced an approach of "move to Windows or we'll sue you until you drop."

Some of the analysis of this train of thought was accumulated here and the Huffington Post has this good article.

So here's what it looks like to me

1. Microsoft has abandoned its long history of not suing on software patents, in order to attack the Linux operating system. (Other patents at issue are specific to GPS systems.)

2. It has attacked Linux in the embedded devices market, where Linux has been conspicuously successful. This avoids the problem of suing developers or users of Linux distributions, such as Red Hat, which would threaten the many large Microsoft customers that use both Windows and Linux.

3. Even if the Linux community rides to the rescue, TomTom will be under pressure from its shareholders to settle quickly on "undisclosed terms" and, weakened as is, to avoid the cost and uncertainty of making a posterchild of itself.

4. More likely, TomTom will sell out to Microsoft, which tried to buy TomTom in mid-2006. Companies with large patent portfolios can drive hard bargains. With TomTom in a bind at the bank, Microsoft can use its patents to acquire TomTom on the cheap.

5. By demonstrating its willingness to sue a small company, Microsoft can induce others to settle, while undermining confidence in the market for embedded Linux. By contrast, when IBM sought to impress the world with its patent portfolio, it at least picked on Amazon -- a company able to defend itself and with a reputation for asserting patents aggressively. (Remember the one-click ordering patent that Amazon used in its holiday-season attack on Barnes and Noble?).

The head of the OSI has responded to this article, which we'll return to in a moment.

Is It Patentable Anymore?

A lot of the above is hinged on an important assumption. It's the assumption that in this post-Bilski era [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14] software patents cannot be challenged and eliminated in the courtroom (let alone be granted).

Well, here is a very relevant new article from Law.com.

During the heady dot-com heyday, patent attorney Scott Harris and his buddies set off to patent a far-out sounding "paradigm" for marketing software to customers.

The idea reached the end of the road Friday when the U.S. Court of Appeals for the Federal Circuit determined that it's not worthy of a patent. Citing its recent decision in In Re Bilski, which found that pure business methods aren't patentable, the court ruled that the "Applicants do no more than provide an abstract idea -- a business model for an intangible marketing company."

What a bummer, eh? Groklaw writes more about the subject:

The Federal Circuit Court of Appeals, the one that handles patent cases and which ruled in In Re Bilski has ruled in another business methods case, In Re Ferguson [PDF]. The "inventor" tried to patent a "paradigm" for marketing software.

No. I'm not kidding. Not just a software patent; a method for *marketing* software. Here's the short version of what the ruling says:

As to Applicants' method claims, which at least nominally fall into the category of process claims, this court's recent decision in Bilski is dispositive.

Dispositive. So he lost, though he may appeal, and that's why I put the word inventor in quotation marks. I've done the PDF as text for you now. The ruling is the dernier cri in patent law, and if we're looking for prior art, such as in the Microsoft v. TomTom or the Red Hat cases, we need to keep up, so we know what the rules are currently.

Speaking of Groklaw, patents in de facto standards, and Jeremy Allison, here is a highly relevant bit from Grokdoc:

This quote from Jeremy Allison discussing Microsoft's proprietary "extended" Kerberos specs says it all:

This is course is a very clever way to pretend to distribute the spec, whilst making it completely impossible to implement in Open Source kerberos servers. If you did of course the full weight of US anti-reverse engineering laws would descend upon you.

The EU commision has a section on MS' handling of Kerberos in their (long) final decision against MS (PDF, too long to quote, search for "Kerberos"). A snippet:

Already in its reply to the Commission’s first Statement of Objections, Microsoft stated that it in fact published "on 26 April 2000 […] details concerning its use of the Authorization Data field […]". Microsoft thereby referred to a specification called Microsoft Authorization Data Specification v. 1.0 for Microsoft Windows 2000 Operating Systems.

However, this specification only described the structure of the authorization_data field and does not describe in detail the meaning of the various fields. Furthermore, the text of the document provided that "the Specification is provided to you solely for informational purposes […] and pursuant to this Agreement, Microsoft does not grant you any right to implement this Specification". Thus, the specification could not be used by competitors to adapt their work group server operating systems so that they could participate in Microsoft’s Kerberos-based security architecture.

Another ongoing debate out there is to do with a thesis dismissing the economic value of patents as a whole. Here is another article on this subject which was brought up some days ago.

Michele Boldrin and David K. Levine, two leading economists from the Washington University in St. Louis, believe that the time has come for patents and copyright to disappear as pieces of legislation from the laws of all countries. They say that the most important asset that any nation now has in front of the economic crisis is innovation, but that these two types of laws hinder it, and prevent new and potentially marketable products from reaching customers. In their new book, “Against Intellectual Monopoly,” the two argue the necessity of making copyright and the patenting systems obsolete.

Here Be Villains

Microsoft has chosen to shake up and bark up the wrong tree. An IBM employee and known OS/2 advocate back is the days (Jason Perlow) is warning that Microsoft could go down the same path as Unisys if this charade against TomTom continues. We've already seen public protests over the TomTom case, along with other related issues.

Unisys became a pariah in the Open Source community, their patents for LZW expired, and when they entered the Open Source consulting business years later, they lost all of their credibility and many companies and individuals refused to work with them as a result.

Unisys has still never completely recovered from this. As a former Unisys employee I can speak with authority about this, because every time I used to talk to my friends in the Open Source community about what we were trying to do with Linux and Open Source in our professional services business, I would get the usual “Hey, weren’t you the guys who…” preamble.

End of discussion.

If this litigious behavior from Microsoft continues, I don’t see why consumer electronics manufacturers which use embedded Linux couldn’t just go and standardize their own flash memory filesystem equivalent to PNG. After all, there are other perfectly good file system formats that could be used to store data on SD cards and other flash devices, such as UBIFS and LogFS, which are even more efficient and more resilient at storing data. UBIFS and LogFS also have the advantage of being journaled, whereas FAT32 is not.

Dana Blankenhorn speaks of a form of retaliation against Microsoft and the OSI's blog points out that Microsoft is annoying a lot of angry people at this very sensitive time.

For more than 10 years Microsoft has toyed with the idea of using the entirely questionable practice of using software patent litigation as a kind of trump card in its battle against open source innovation. The idea was present in Halloween III and stepped up a notch in May 2007 when Microsoft's general counsel Brad Smith made the unsubstantiated claim that Linux infringed 235 Microsoft patents. As many of you may recall, Microsoft played very coy, refusing to identify a single infringement with any specificity. (The open source and free software communities have a great track record [1], [2], [3] of devising alternative implementations to avoid the possibility of patent infringement, and so perhaps Microsoft was more interested in using the element of surprise attack than indeed any timely remedy of the infringement. But that is mere speculation.)

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Whatever the arguments may be, by filing against TomTom Microsoft has effectively pulled the pin from their legal grenade and have lobbed it into the center of the open source community. Can we pick it up and throw it back (like the FTC attempted to do with Rambus)? Will the grenade be judged a dud (if Bilski holds)? Will the legal shrapnel kill those who are trying to protect our village? And if it does, will Microsoft win anything more than a pyrrhic victory? As Brian writes, Microsoft's actions are despicable. But I remain optimistic. I believe that thanks to the financial meltdown and the stories of fraud and abuse coming from the most well-polished offices on Wall Street that the world understands now, better than it has for a very long time, that sustainable success depends on success we can all share and participate in. When monopolies rise all-powerful, when the power of a company becomes so great that we no longer question our need to police it, then that is the moment we must say "ENOUGH!". It is neither a sustainable nor a desirable condition to become beholden so such power, and we should do nothing, neither legally nor legislatively, to protect those monopolies against our own interests. Rather, we should fight against them with every strength that we have, knowing that when they are defeated, we can all build a stronger, shared success.

Like Unisys, SCO used to be a large company whose products were still established enough to marketed and sold, at least to an extent. Look where it's at today.

Et tu, Microsoft? ⬆

"Pamela Jones [...] has told Infoworld that Microsoft will be the next SCO Group"

--Heise