Are Sun and Microsoft forming an unholy alliance?

Rumours are abounding after details of a deal to shield StarOffice users from patent-infringement litigation explicitly left OpenOffice.org users out in the cold

The Internet went all abuzz last week when a report by Todd Bishop of the Seattle Post-Intelligencer posited that Microsoft was keeping open its legal options against licensees of OpenOffice.org. The software is a freely downloadable open-source productivity suite that constitutes a significant portion of Sun's commercially offered StarOffice. It also exemplifies the threat that the open-source movement poses to Microsoft.

Bishop reached his conclusion after an examination of a document called the Limited Patent Covenant and Stand-Still Agreement that was recently filed by Sun with the Securities and Exchange Commission (SEC). The document included previously undisclosed text from the legal agreements that codify Microsoft and Sun's recently forged partnership -- text that results in significant legal protection for customers of StarOffice, but that explicitly denies that same protection to users of OpenOffice.org.

The revelation set off a wildfire of speculation and conspiracy theorising that burned through the Internet's news pages, blogs, and other public forums. For example, because open-source software lives under the threat of patent infringement licensees of it can be sued by any relevant patent holder at any time. Why, then, would Microsoft explicitly restate its right to sue OpenOffice.org licensees on the basis of patent infringement (as it did in the text of its agreement with Sun) when that right has pre-existed for Microsoft as well as others? To the extent that the larger agreement between Sun and Microsoft involved a significant amount of bargaining, why didn't Sun -- technically the steward of the OpenOffice.org open-source community -- request the same immunity for licensees of OpenOffice.org that licensees of StarOffice will get? Did Microsoft use some sort of leverage to make Sun agree not to intervene in the event it decides to sue OpenOffice.orglicensees? Did Sun capitulate, or are there undisclosed portions of the Microsoft-Sun pact still tucked beneath the pillows of Bill Gates and Scott McNealy?

Perhaps the quid pro quo is straightforward -- a mutually beneficial plot to force users to one of two legally safe, for-profit alternatives to OpenOffice.org: Microsoft's Office or Sun's commercially licensed StarOffice?

Characterising the legal risk that Microsoft's "reservation" creates, Daniel Egger, CEO of Open Source Risk Management (OSRM), said, "Businesses would rather be able to price-in [to their budgets] this sort risk ahead of time for a known amount than carry a small possibility of a very big loss as a result of a lawsuit. The main thing businesses want isn't a total absence of risk -- it's certainty about the risks they have."

Sizing up the risk is almost impossible. Earlier this year, OSRM published a study concluding that Linux may on infringe on up to 283 patents.

In his blog entry regarding the Seattle Post-Intelligencer story, ZDNet contributing editor Dave Rosenberg asked the most prolific CxO-cum-blogger in the tech industry -- Sun president and COO Jonathan Schwartz -- why he hadn't yet graced his own pages with an articulation of Sun's position now that the legalese had come to light. In an uncharacteristic bit of flaming, Schwartz rose to the occasion with a blog entry that refers to conspiracy theorists as "bizarro numbskull anti-Sun lunatics".

To understand the conspiracy theory, one must first understand the advantage for Microsoft and Sun should Microsoft ever choose to exercise its legal option. Microsoft and Sun have been very clear that the two most dangerous threats to either company are IBM and Red Hat. Though these threats lie primarily on the server side of the equation, Red Hat has already discussed its desktop Linux ambitions. Technically, there's no reason desktop Linux can't pose a legitimate threat to Windows and Microsoft Office. But most experts agree that that challenge for desktop Linux will be far greater -- perhaps insurmountable -- than it has been for the server-based usage of Linux (which has scored some significant traction against both Windows Server and Unix).

For a desktop Linux platform to even have a shred of hope, especially in businesses, it will have to be compatible with Microsoft Office. Few organisations are in a position to build a desktop strategy from scratch or rip and replace Windows and MS-Office. Companies that want to sample desktop Linux will require that it survive the rigors of their existing MS Office-dominated environments. For now, the primary hope for freely obtaining such interoperation is through OpenOffice.org; or, if companies are open to paying a licensing fee to Sun, StarOffice. As noted previously, Sun has already negotiated for legal protection from Microsoft's legal eagles for licensees of StarOffice. The lack of legal protection for OpenOffice takes the wind out of the desktop sails of not only Red Hat, but most other distributions of Linux, which are typically bundled with OpenOffice.org.

"The legal uncertainty," said OSRM's Egger, "will have a chilling affect on the adoption of OpenOffice, particularly larger companies with a lot to lose."

Brian Kahin, formerly an intellectual-property lawyer and now a visiting professor at the University of Michigan's School of Information and its Gerald R. Ford School of Public Policy, agreed "unequivocally" with Egger's conclusion. Kahin noted how legal concerns temporarily derailed the City of Munich's plans to migrate 14,000 desktops to Linux. Munich has since decided to continue the migration even though the legal issues aren't fully resolved.

As long as businesses aren't interested in assuming the legal risk associated with OpenOffice.org, and as long as Microsoft Office compatibility is an essential prerequisite to the deployment of desktop Linux, the "Munich effect" works to Microsoft's advantage. To the extent that potential users of OpenOffice.org are driven to StarOffice, the advantage is Sun's. To the extent that their common enemy Red Hat and others down the line, such as Novell, might be forced to drop OpenOffice.org, or license StarOffice (both of which would dig into Red Hat's or Novell's bottom line and their plans for desktop Linux), the advantage is both Microsoft's and Sun's.

Basically, anything that hurts Red Hat and the other Linux distributors is ultimately beneficial to the two companies. Any negative consequences to Red Hat could also ripple over to Microsoft and Sun's other mutual enemy -- IBM. (As an aside, any distribution that comes bundled with a fee-based product such as StarOffice would not be freely copyable or redistributable under the open-source licence that comes with the rest of the Linux distribution.)

Would Microsoft sue OpenOffice.org licensees? Microsoft hasn't said yes, but it hasn't said no, either. Most experts consider such legal action unlikely. Some believe it would be a PR disaster for Microsoft to start bullying the open-source community. Others believe that it could draw the attention of trustbusters. Egger believes it's not in Microsoft's business interests.

Kahin thinks the content of the stand-still agreement is likely to increase the already substantial political resistance to patents in Europe. "Sending this message, that patents are a threat to open source, is likely to draw some attention," said Kahin. "European governments are more supportive of open source. They see Microsoft as America's national champion and as a symbol of their dependency on the U.S., and as one monopoly supplier that happens to be a foreign company."

Although suing users or distributors of OpenOffice.org and upsetting the European Union might not be in Microsoft's business interests, some of Redmond's actions on other fronts create reasonable doubts about the company's intentions when it comes to intellectual property and open source. The last few weeks have been telling.

First, the IETF by Microsoft after Microsoft demonstrated some inflexibility on the intellectual property front, particularly when it insisted on keeping secret a patent application on its proposed technology. Next, AOL -- looking to distance itself from the brewing controversy -- withdrew its support for Microsoft's specification -- known as SenderID. Finally, Microsoft's patent application has been published, raising new concerns that it includes techniques for which prior art exists. In particular, some see the application as covering the techniques found in Meng Weng Wong's open-source-based Sender Policy Framework (SPF). eWeek reported Anne Mitchell, president and CEO of the Institute for Spam and Internet Public Policy, as saying, "I certainly believe that there is great cause for concern given some of the claims."

In light of the news about how Microsoft's patent application could affect the open-source SPF, OSRM's Egger said, "Microsoft is behaving in a way that's inconsistent. It doesn't reflect a single coherent strategy regarding IP and that can add to the uncertainty." It's an uncertainty compounded by the language in the Microsoft-Sun agreement that exposes OpenOffice.org licensees to legal action by preventing Sun from intervening should Microsoft choose to act. "Because the text is so clearly stated, it was clearly important to Microsoft to reserve the right to sue OpenOffice licensees in the future," said Egger.

Addressing the media inquiries regarding its intentions, Microsoft issued this response: "The agreement with Sun is a broad licensing agreement that spells out which technologies are included in the agreement and which are not. The agreement does not convey anything about Microsoft's views regarding technologies outside the scope of this agreement."

Bishop's report in the Seattle Post-Intelligencer states that "Microsoft declined to say whether it is contemplating any patent-related litigation against OpenOffice licensees, or on what grounds it would base any suit of that sort." Microsoft Watch's Mary Jo Foley reported that Microsoft was downplaying the impact of the OpenOffice component of its Sun settlement, and so was Sun. According to Foley's report, Sun spokeswoman May Petry called the patent clauses as specified in the Sun-Microsoft agreement "standard practice for any commercial company" and that "open-source code is conventionally provided without warranty and liability coverage and OpenOffice.org is no different. OpenOffice.org is unchanged and not disadvantaged by the settlement."

Using his blog to defend Sun, Schwartz characterised the conspiracy theorists as having overblown the situation. Pointing to a blog entry by Sun's open-source "Diva" Danese Cooper, Schwartz said, "OpenOffice matters. More so everyday." In her blog entry, which looks to restore normalcy to a situation that's spiralling out of Sun's control, Cooper writes: "In many ways, I think a strong community is the best hedge against legal troubles, too. All of Free/Open Source Software (F/OSS) is still virtually untested legally, so participation is about revolution, not business as usual. What really keeps big companies from suing F/OSS projects is the negative PR impact. And notice that OpenOffice.org is widely adopted in Europe, where Microsoft has also been having other troubles of late. A strong community behind OpenOffice.org makes it harder to pick on, period. We love the open source community, we spawned from it. We'll protect that community, that innovation, and our place in it, with all our heart and energy."

At issue for the general counsel's office in many corporations is not Sun's enthusiasm for open source, its verbal promise to protect the community, or the opportunity to join a revolution. Egger doesn't doubt the sincerity of executives like Schwartz and Cooper, and neither do I. Ask any lawyer how much sincerity counts when mitigating risk -- especially when there's a legal agreement in place. "Without a legally enforceable mechanism," said Egger, "Sun's intentions currently don't rise to the level of a defence you can legally count on."

Schwartz understands this -- and his own history proves it. At a dinner with the press during LinuxWorld 2003 in New York City when SCO began dropping hints of an impending lawsuit, Schwartz went for IBM's jugular. He advised me and the other journalists at the table that moving forward with Linux solutions from IBM and Red Hat without indemnification (which IBM and Red Hat didn't offer then, and still don't) equated to the sort of legal exposure that no company should tolerate. A year later, during an interview where I asked him about those remarks and the sort of indemnification that Sun was offering, Schwartz reminded me that "the one company that's interesting is IBM. IBM is the largest intellectual property litigator on the planet, yet they refuse to indemnify customers." Yet, today, with the tables turned, what's good for the goose apparently isn't quite so good for the gander.

In commenting on the issue, Egger was careful not to condemn Sun. "OpenOffice was given to the open-source community. Asking Sun to indemnify something they don't own is almost impossible." But when asked if Sun could have bargained with Microsoft for indemnification for OpenOffice.org licensees as well as those of StarOffice (at least from a Microsoft-initiated lawsuit), Egger conceded that there was no reason it couldn't have. Egger speculates that Sun simply had nothing to trade for something that Microsoft so explicitly wanted and this was low-hanging fruit compared to some of Sun's more important objectives in settling with Microsoft.

So far, Sun isn't commenting -- beyond what Schwartz, Cooper, and Petry have already said. This begs the question of how Sun executives can continue to ask the open-source natives not to get restless within moments of appearing to have betrayed them. He wouldn't say the things he said unless he meant it, which leads us in one direction: this probably isn't about pushing end users to legally safer solutions from Microsoft or Sun or undermining Linux (desktop or otherwise) as the conspiracy buffs have theorised. Whether or not the Securities and Exchange Commission required its disclosure, both Microsoft and Sun probably wanted the standstill agreement made public because it contains an important message from the two companies.

It's a message that OpenOffice.org could infringe on Microsoft's patents and that Sun cannot and will not offer sanctuary should OpenOffice.org licensees be subject to a patent infringement suit. It's doubtful, however, that the message is for licensees like you and me and other end users who want to make use of open source or who want to participate in the various open source projects. Microsoft knows the PR disaster it would have on its hands, especially in Europe, if it chose to do what SCO is doing. Knowing it would be suicide, neither it nor Sun will ever sue an end user or potential customer on the basis of patent infringement, and Sun will continue to pour a significant amount of energy into the open-source community from whence it came, as Sun's Schwartz and Cooper have promised. I believe them and you should, too.

The message is, rather, for the other "covered entities" listed in the agreement -- original equipment manufacturers (OEMs), replicators, distributors, and retailers. It's a message from Microsoft and Sun to companies like Red Hat and IBM that they will allow and, in Sun's case, even promote the benefits of open source for the open-source community. But, they're not willing to be IP benefactors to competitors like Red Hat and IBM that would just as soon destroy them with their own IP. If you doubt this, allow me to remind you of what Steve Ballmer said on the day that Microsoft and Sun went public with their watershed agreement: "It's an agreement that comes from two companies that believe in intellectual property, that develop intellectual property and that are respecting intellectual property."

At this point, if I were Red Hat, and I knew that Microsoft's team now boasts ex-IBM-patent portfolio architect Marshall Phelps -- who could probably prove that OpenOffice.org infringes on a Microsoft patent or copyright -- and that the provisions of the stand-still agreement pave the way for Microsoft to seek " back pay" on all copies of OpenOffice.org distributed to date (a copy of OpenOffice.org is distributed with almost every copy of Linux), I would be worried -- very worried. And if Red Hat has something to worry about, then one can only imagine the pickle that might put IBM in, not to mention a few other hardware and software companies that compete with both Microsoft and Sun and that also rely on the Red Hat ecosystem. Can you name them?

There's an old Arab proverb, "An enemy of my enemy is my friend." Need I say more?

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