Bonum Certa Men Certa

Microsoft's Patent Troll (IV) Helps Increase Microsoft Tax, BSA Changes Intellectual Monopoly Laws

Nathan Myhrvold



Summary: More analysis of Microsoft's 'Android tax', the involvement of its former CTO in patent extortion, and lobbying through front groups

TECHRIGHTS has spent several years covering and warning about Microsoft's aspirations to tax GNU/Linux -- an effort that began in 2006 when Microsoft signed a patent deal with Novell.



Novell has been sold and broken down into components that include SUSE. It did not take long for SUSE to become Microsoft sponsored (through cash injection), which works well for Microsoft because SUSE legitimises a 'Linux tax'. This is a very simple fact that Jos from OpenSUSE has been arguing with me about. It was actually Jan from Red Hat who came out in my support in the face of heckling from Jos, whose position is understandable given the company which pays his salary. Here he is speaking about openMind, an event which we are told has been hijacked or exploited by Microsoft and its friends to change perceptions (our source asked not to be quoted verbatim on this). "At the (pretty cool) openMind conference in Tampere, Finland," writes Jos, "it came up that a big advantage of Tumbleweed is that it always has the latest hardware support. Thanks to the rolling release, Tumbleweed comes with the latest Linux kernel which plays a big part of the hardware support of a Linux distro."

Just bear in mind that today's openMind is a pro-Microsoft event (as much as it can be given the "open") and this includes the Nokia which is tied to Microsoft and obviously suffers more massive layoffs this week, like most companies that enter Microsoft's nest. A couple of days ago we learned that following Microsoft's intervention inside Nokia, Intel too was moving away from MeeGo and establishing Tizen with the Linux Foundation instead. This is a success story to Microsoft, which managed to paralyse a great GNU/Linux distribution for mobile devices, vehicles, etc. That's just the way Microsoft operates. When it comes to Android, Microsoft has become a major parasite and SJVN writes that: "According to a Goldman Sachs‘ tech analyst note, as reported by Business Insider, that’s exactly how Microsoft is cashing in on Android. Goldman Sachs estimates that Microsoft will pick up $444-million in revenue from its Android patent deals for fiscal year 2012. For those of you playing at home, that’s $3-$6 per Android device. Yes, that may well be more than Microsoft makes from its own troubled mobile operating systems." For code it never wrote at all; this cost is being passed to customers.

"This is a success story to Microsoft, which managed to paralyse a great GNU/Linux distribution for mobile devices, vehicles, etc."In a new article by Richard Hillesley he calls it a protection racket and the foreword explains: "Software patents are a racket for the protection of incumbent cartels and monopolies against innovation and competition, says Richard Hillesley

"The casual observer could be excused for believing that litigation and teams of lawyers were the largest part of technical innovation in the computing industries, such has been the part played by litigation and threats of litigation around patents, copyrights and trademarks during recent years.

"Litigation has become a highly profitable way of doing business. Big money can be made for a relatively small outlay and litigation predicated around the “ownership” of ideas, patents and copyrights requires minimal investment in staff, research, manufacture or the trading of hard goods.

"In fact all these activities have become superfluous in some areas of industry where possession of “Intellectual Property” has become the primary objective of trading. Pick the right target to make a claim against and the chances are that they will pay up before it gets to court. Throw enough patents at the competition, and you can slow them down. Make a patent stick and you can make a lot of money."

More people need to change this emerging status quo, which normalises atrocious behaviour and makes it "business as usual". As ECT put it, "Samsung, Microsoft Deal Tugs at the Rug Under Google's Feet" because Google was never even given the chance to defend its own platform from this extortion. We wrote about it yesterday and showed that media distortion makes things worse, with Microsoft boosters portraying it as an acceptable transaction and a matter of obeying the law rather than actually breaking it. Larry Dignan writes that "Microsoft cements position as Android's patent toll collector" and in curious spin from Murdoch's press it is claimed that "Samsung also will work with Microsoft to develop smartphones and tablets based on Microsoft's Windows software."

"More people need to change this emerging status quo, which normalises atrocious behaviour and makes it "business as usual"."The article contains a lot of euphemistic language and regarding Windows at Samsung, this is not new. Microsoft did the same thing after it had signed the Android patent deal with HTC. Here is an example of a very poor headline from the corporate press. Microsoft goes around the room threading to sue companies and this is somehow being portrayed as a legitimate practice.

Meanwhile it turns out that Wistron, which Microsoft extorted recently, is now coughing out money to Microsoft's patent troll as well. To quote: "Wistron Corporation and Intellectual Ventures (IV€®) announced today that they entered into a license agreement. The deal provides Wistron with access to IV’s extensive patent portfolio of more than 35,000 IP assets, and also provides them membership in IV’s IP-for-Defense program. Wistron is among the world’s largest original design manufacturer (ODM) companies producing information communications technology (ICT) products."

This is just a troll to be paid to the world's biggest patent troll, Intellectual Ventures. Why should this be tolerated? Where is the value to the industry and to customers?

As pointed out in a new comment on an article about Google, "software patents are doing more harm then google is. remove the patent system and go back to software copyrights and all will be well again. I find it very funny that microsoft railed against software patents early on until they had acquired a large amount of them, then they rallied for software patents. now they are getting bit by their own snake as software patents are killing innovation.

"If Google had given equally to republicans, this issue would never have come up."

This whole patenting frenzy at Microsoft can even see in this week's headlines, some of which say that Microsoft strives to get more patent monopolies on phones [1, 2]. As we claimed earlier in the week, Microsoft's business plan is to sell mobile patent licences, not mobile phones. This would essentially make Microsoft qualify as a patent troll, as soon as it drops actual products due to poor sales.

For better coverage of the Samsung deal, see this Linux site. It is not saturated with euphemisms and spin.

Microsoft has been relying on a shift in law -- a shift that puts great focus on patents and copyrights maximisation, to the extent where one can claim to own someone else's code for merely achieving something similar. Based on the following new report, lobbying from the Microsoft front group, Business Software Alliance, has been considerable enough to reach about half a million dollars in publicly-disclosed spendings (the real numbers are usually orders of magnitude higher):

The Business Software Alliance spent $440,000 on lobbying on issues relating to cloud computing and other topics in the second quarter, down slightly from the year before, according to disclosure documents filed with Congress.

The organization lobbied Congress and various government agencies on issues concerning online privacy, patent issues, and criminal punishments for violation copyrights, it said in a disclosure report it filed July 20 with the House clerk's office. The alliance is an industry group that has an extensive focus on fighting software piracy.


In our Cablegate collection we have amassed some examples of BSA lobbying, some of which is indirect. This helps set the scene for Microsoft's patent extortion, not just so-called 'piracy' crackdowns.

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