It's OK as long as "Microsoft loves Linux"
JUST before the weekend James Bottomley (formerly Novell) wrote about patents in relation to Free software1. It is encouraging to see the subject brought up because anyone with a clue knows too well that software patents and Free software are not compatible.
"...this is what Microsoft now boils down to; it's describing itself as the very opposite of what it is while continuing to attack GNU/Linux vendors with patents, even as recently as weeks ago."Days ago it restarted with dedicated Microsoft propaganda sites (like MSPoweruser with "Azure IoT customers can now get access to 10,000 Microsoft patents"). This latest lie from Microsoft is a reversal of narratives (e.g. "Microsoft gives 500 patents to startups" -- a bizarre spin on the word "give"). Then, citing the above, another site called it a "donation". Looking a little deeper into it, it reinforces our asseration that Microsoft 'bought' LOT Network for PR purposes. Here they go:
“The LOT Network is really committed to helping address the proliferation of intellectual property losses, especially ones that are brought by non-practicing entities, or so-called trolls,” Microsoft Corporate Vice President and Deputy General Counsel Erich Andersen said in the report. “We want to help the LOT Network grow its network of startups. To provide an incentive, we are going to provide these patents to them.”
Microsoft Corp. today launched an initiative to provide legal protection against so-called patent trolls for startups, as well as for larger companies that use its Azure cloud platform to power “internet of things” projects.
Patent trolls, or nonpracticing entities as they’re formally known, are an oft-discussed concern in the tech industry. They’re firms whose business model is to acquire technology patents and use them to launch lawsuits against other companies. Such litigation poses a particularly big threat for startups, which often don’t have the resources to engage in a prolonged legal battle.
The realm of Software Patents is often considered to be a fairly new field which isn’t really influenced by anything else that goes on in the legal lansdcape. In particular there’s a very old field of patent law called exhaustion which had, up until a few years ago, never been applied to software patents. This lack of application means that exhaustion is rarely raised as a defence against infringement and thus it is regarded as an untested strategy. Van Lindberg recently did a FOSDEM presentation containing interesting ideas about how exhaustion might apply to software patents in the light of recent court decisions. The intriguing possibility this offers us is that we may be close to an enforceable court decision (at least in the US) that would render all patents in open source owned by community members exhausted and thus unenforceable. The purpose of this blog post is to explain the current landscape and how we might be able to get the necessary missing court decisions to make this hope a reality.
What is Patent Exhaustion?
Patent law is ancient, going back to Greece in around 500BC. However, every legal system has been concerned that patent holders, being an effective monopoly with the legal right to exclude others, did not abuse that monopoly position. This lead to the concept that if you used your monopoly power to profit, you should only be able to do it once for the same item so that absolute property rights couldn’t be clouded by patents. This leads to something called the exhaustion doctrine: so if Alice holds a patent on some item which she sells to Bob and Bob later sells the same item to Charlie, Alice can’t force Bob or Charlie to give her a part of their sale proceeds in exchange for her allowing Charlie to practise the patent on the item. The patent rights are said to be exhausted with the sale from Alice to Bob, so there are no patent rights left to enforce on Charlie. The exhaustion doctrine has since been expanded to any authorized transfer, even if no money changes hands (so if Alice simply gave Bob the item instead of selling it, the patent still exhausts at that transaction and Bob is still free to give or sell the item to Charlie without interference from Alice).
Of course, modern US patent rights have been around now for two centuries and in that time manufacturers have tried many ingenious schemes to get around the exhaustion doctrine profitably, all of which have so far failed in the courts, leading to quite a wealth of case law on the subject. The most interesting recent example (Lexmark v Impression) was over whether a patent holder could use their patent power to enforce any onward conditions at all for which the US Supreme Court came to the conclusive finding: they can’t and goes on to say that all patent rights in the item terminate in the first authorized transfer. That doesn’t mean no post sale conditions can be imposed, they can by contract or licence or other means, it just means post sale conditions can’t be enforced by patent actions. This is the bind for Lexmark: their sales contracts did specify that empty cartridges couldn’t be resold, so their customers violated that contract by selling the cartridges to Impression to refill and resell. However, that contract was between Lexmark and the customer not Lexmark and Impression, so absent patent remedies Lexmark has no contractual case against Impression, only against its own customers.