Chris J Powell

Patent Licensing – Good Business or Legalized Extortion

I do not pretend to like the way that Software Patents are used to spread FUD (Fear, Uncertainty and Doubt) and that is not likely to change.  Companies like Microsoft continue to amaze me in that they find ways to leverage their Patent Portfolio to strong arm a protection racket.  If this kind of activity was done by an individual or group of individuals it would be considered organized crime and International Law Enforcement would seize assets and incarcerate individuals.

My colleague @dstahl forwarded me some details that Microsoft is back at its muscle flexing that started more than a decade ago that eventually lead to the licensing deal with Novell that “protected” Linux from lawsuits.  The basic premise of Microsoft’s play here has been to publicly state that Linux violates 235 of its Patents but I was unable to locate what those were (for the most part at least)…and there for seek Patent Licensing deals that either open a Royalties payment scheme or the exchange of more Patents in a “Mutually Assured Destruction” promise.

Now Microsoft does not really hide the fact that they do this and have dedicated a large portion of its business to striking deals like this…in fact Microsoft makes more money from the Android Operating System than Google does because of its own licensing deals with mobile manufacturers.  The Microsoft Site even has its own Justification Page for explaining their stance on Intellectual Property (IP).

The latest “victim” of the Linux and Open Source Extortion racket is Amdocs who on July 24 inked a deal with Microsoft that would:

The patent agreement provides mutual access to each company’s patent portfolio, including a license under Microsoft’s patent portfolio covering Amdocs’ use of Linux-based servers in its data centers.   Although specific terms of the agreement are confidential, Microsoft indicated that Amdocs will pay Microsoft an undisclosed amount of money under the agreement.

If you would like to see the full press release it can be found here.  There is no doubt in my mind that in the world of Software Development that there will be instances where the infringement of a process or protocol will happen…much of the time it is an innocent mistake and if given the chance, there are alternative ways to come to the same conclusion and build a better mouse trap but that is when you know what the infringement is.

I remember thinking back in 2006, Novell sold its Open Source soul to Microsoft and then the companies started to line up to jump on the opportunity to have a sense of protection and benefit from an IP Partnership.  It was this move that actually led me to stop using and interacting with the SuSE OS and it has been almost 6 years since I have even downloaded openSuSE in my vast collection of Linux Distros.

This may seem naive but how can this continue to happen.  There are harsh penalties for kids who bully other kids on the play ground. There is even an active stream of Anti-Bullying in the Workplace that can be found  But companies can bully and strong arm other companies to enter into protection rackets that prevent them from being sued by each other.

The Free Dictionary defines Racketeering as:

Traditionally, obtaining or extorting money illegally or carrying on illegal business activities, usually by Organized Crime. A pattern of illegal activity carried out as part of an enterprise that is owned or controlled by those who are engaged in the illegal activity. The latter definition derives from the federal Racketeer Influenced and Corruption Organizations Act (RICO), a set of laws (18 U.S.C.A. § 1961 et seq. [1970]) specifically designed to punish racketeering by business enterprises.

So I have to ask…how is it that the legal system can be so messed up that what street gangs and Organized Crime does is illegal (sure it is more about the threat of violence) but when Microsoft exerts is Patent Claims…it is all ok…because the only threat is a law suit…and those are legal.  Over at they posed a very interesting question:

But it certainly raises more questions than it provides answers: What patents does Microsoft hold that means a company running Linux-based servers in its data entres needs a licence? How much would that licence costs? What does it mean for other firms running Linux in their datacentres?

I really just don’t get it.  I understand that Intellectual Property is important to the success of a company but when the Patents in question are either so broad that they cover EVERYTHING…or in the case with Microsoft’s Patent Protection Pitch…the violation of 235 unnamed and undefined Patents means you now have to pay us “X” per year…then we won’t sue you.  That sounds a lot like the school yard bully saying…you have to give me your lunch money EVERY day or I will beat you up!

Well that is enough of the deep introspective thought about Microsoft.  I am starting to feel the bile and general frustration bubble up.


Chris J Powell

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