What should Microsoft do about the 235 "free software" patent violations?

A lot of pixels have been devoted to a story by Fortune Magazine (CNN coverage here) covering claims made by Microsoft that free software is violating 235 of the company's patents.

The core of the argument is summed up as follows:

The conflict pits Microsoft and its dogged CEO, Steve Ballmer, against the "free world" - people who believe software is pure knowledge. The leader of that faction is Richard Matthew Stallman, a computer visionary with the look and the intransigence of an Old Testament prophet.

Caught in the middle are big corporate Linux users like Wal-Mart, AIG, and Goldman Sachs. Free-worlders say that if Microsoft prevails, the whole quirky ecosystem that produced Linux and other free and open-source software (FOSS) will be undermined.

Microsoft counters that it is a matter of principle. "We live in a world where we honor, and support the honoring of, intellectual property," says Ballmer in an interview. FOSS patrons are going to have to "play by the same rules as the rest of the business," he insists. "What's fair is fair."

There's also a breakdown of the alleged violations given:

• Linux kernel - 42 violations
• Linux graphical user interfaces - 65 violations
• Open Office - 45 violations
• Email apps - 15 violations
• Misc - 68 violations

If suing was on the cards, rest assured that there wouldn't be this kind of banter going onDespite the breakdown of alleged violations, Microsoft still refuses to identify specific patents or explain how they're being infringed,.  Many involved in open source communities have asked Microsoft to do this but the company is probably unwilling to take this step for fear of generating a tidal wave of challenges.

First off, let's clear up one thing here.  Microsoft is not interested is suing.  It's already declared such action as being a non-starter as it would "get in the way of everything we were trying to accomplish in terms of [improving] our connections with other companies, the promotion of interoperability, the desires of customers."  If suing was on the cards, rest assured that there wouldn't be this kind of banter going on.

Now here's a question for you.  What should Microsoft do about this?  It seems to me that they have three options open to them:

• Ignore the situation and let the issue slide (effectively donating the patents to the open source community)
• Demand royalties or enter into licensing agreements
• Do nothing in the interim but keep an eye on the situation

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It's clear that Microsoft isn't going to ignore the issue and let it slide because the company wouldn't be engaging in this debate if that was the case (it's also not going to be a move that pleases Microsoft's stakeholders).  Same goes for doing nothing.  It seems that the only viable route for Microsoft to take is enter into discussions over possible royalties.

Some commentators are taking the view that this is signals a new Microsoft desperate to squeeze cash from Linux because its own business model is crumbling.  Given Microsoft's bottom line, this kind of statement is bordering on the ridiculous.  If Microsoft's business model is crumbling, other companies such as Apple, who have a far less muscular bottom line, must be in dire trouble (which they're not, of course).  Record quarterly profits aren't the usual sign of an eroding business model.

Some say that Microsoft needs to outline what the violations are and allow the open source community to code around the problems.  That's certainly a possible solution, but give me one reason why Microsoft should do this?

Some doubt the numbers.  I don't.  The open source movement is massive and with so much code being written, there are bound to be patent infringements.  As Robert McLaws wrote:

Let's face it. In the world of software development, everyone copies everyone. And Linux is, at it's heart, a decentralized operation to build software that competes against Windows by mimicking it, directly or indirectly. It may even have been done accidentally, which isn't terribly farfetched. Accident or not, it happened, and that's all well and good. But if you're an open source developer, and you think that duplicating someone else's technology doesn't open you or your organization up to liability, then you're an idiot.

The landscape has changed significantly.  Back when open source was the domain of geeks with high ideals, it's easy to overlook patent violations (in fact, it would be nuts to even waste too much time worrying about it).  But now that you have massive companies built on a foundation of open source, open source is big business and the rules have changed.

What are your views on the conflict between Microsoft and the open source movement?