Criticising Microsoft's unfair gain at student tech competition

Criticising Microsoft's unfair gain at student tech competition

Summary: Could the rules of a major student-orientated technology competition allow Microsoft to contract the unconditional, irrevocable rights to your work?

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In a high pressure yet equally friendly environment such as the multi-national, university tech student focused event like the Imagine Cup, the last thing the competing groups should be worrying about is who owns the rights to the project they have created.

One would automatically assume the students would maintain the rights to their own work, yet the rules and regulations of the event say otherwise.

I attended the Imagine Cup 2010 in Warsaw a fortnight ago and during the week (see my previous disclosure) I noticed a lack of clarity in the governing rules of the competition of which the winning group could be awarded USD $25,000.

I haven't been the first to notice this, with O'Reilly's reporter Kevin Shockey first pointing out the issues in 2005 when the Imagine Cup was still in its infancy. Though the rules and regulations have been re-written, they still contain the same facts and these issues can still be contested.

Shockey goes straight in for the jugular and states:

"So although as the legal notice states later, you are not granting a license of any copyrights or patents, you grant Microsoft an irrevocable, royalty free, fully paid up, worldwide license to use, review, assess, test and otherwise analyze your entry and all its content in connection with this contest."

"...I recommend any teams that are considering this competition to seriously evaluate the cost of giving Microsoft 'an irrevocable, royalty free, fully paid up, worldwide license to use' your innovation."

Could these rules, simply put, allow Microsoft to either contract the intellectual property (IP) rights of your work? And if not, in what way can Microsoft use the work that you have submitted for their own gain?

I went on what felt like Discworld adventure to find out; not only the facts but also the views and opinions of the ordinary student entrepreneur who have to contend with these issues.

What Microsoft said

The simple answer that Emanuele Ognissanti, Microsoft senior marketing manager told me was that the "rules and regulations were there to simply allow the competition to be judged". At this point, Suzi LeVine, Microsoft Educations director of communications, stepped in to clarify his response to the issues raised with the rules and regulations.

This near-hour long conversation was preceded by a phone call to speak to LeVine "as and when she was available", followed by 15 minutes of which the two aforementioned rushed from one side of Warsaw to the other to answer a single question I put forward on the original call. Already this response to one simple enough query made me question the motives of which the speed of this meeting was undertaken.

The rules have remained unchanged in recent years (they can be found here under the "How will my entry potentially be used"). But in a nutshell it contains the details of how the company will manage the rights and access to the project each student group submits.

LeVine admitted that "Microsoft was acting in a selfish way", by using the experience of past entries and competitions to entice new competitors and encourage future participants, but acting in a way to build on the merits of the competition "though acting in a self-serving way".

Students are mostly unaware of intellectual property (IP) unless they study law or computing. When a person creates something, whether it be a song, a video, a piece of software or anything in writing, it belongs to them unless they pass it on through a business deal.

The concern was how the IP was dealt with by Microsoft and whether by submitting a project through the competition automatically handed over any rights or IP out of the hands of the student creators into Microsoft's control. This is a previous worry with students falling victim to university rules, where by essays and academic credit material submitted to your institution could automatically become theirs and out of your control.

Eventually I got the answer I was looking for: "Microsoft unequivocally states, for the record, that students wholly and fully own their intellectual copyright". That's one issue we can put aside; the other which we cannot is the rights of which students automatically hand Microsoft to use their work.

What my colleagues (and the lawyer) said

However, after seeking legal advice from ZDNet Lawgarithms blogger and qualified lawyer, Denise Howell, it seems that this agreement is far less broad than similar license agreements, and seems fitting and not out of place with a competition such as this. But questions do still arise over how it can be interpreted and thus how far the student is protected, but also whether students submitting projects actually understand the agreement in the first place.

She said that  you don't expressly waive the right to compensation in connection with the use of their submission, though it could be a point to argue over; this was bad drafting on the part of the lawyer. If the company develops something similar, you waive the right to claim compensation from it. This will be explored later.

Dan Kusnetzky, another fellow blogger with ZDNet's Virtually Speaking column and expert analyst, told me that Microsoft would want to protect itself from the situation in which a developer was already working on something, of where a student developed something similar. This comment seemed to reach a consensus with my other colleagues.

In reply to Howell, ZDNet's Government blogger, leading political expert and academic, David Gewirtz pointed out the aggressive nature of many company's terms, conditions, rules and contracts, whereas Microsoft's are more often than not clean, usable and fair.

Compared to many other legal documents of which users are required to abide by, in other areas of Microsoft's dealings or even other companies - Research in Motion comes to mind - the specific area of the rules and regulations which I have beef with is succinct and reasonable on the face of it.

Though, the problem here is like with any other legal document, these terms could be contested by lawyers on both sides of a dispute, and this is something a small group of student entrepreneurs starting out in the technology business cannot afford.

What the students said

Ognissanti told me that he "believes most students understand the rules and regulations". These rules, written in English, are not translated to any other language as the legal context could literally be lost in translation. The students are obliged to accept the rules before continuing to the finals, the teams are also required to present and write their code and complimentary documentation in English.

Though all programming code during this competition was written in English, for many of these students, English not a first language, nor a language they can speak fluently or fully understand let alone fully comprehend a legal document. English is my first language, yet I still struggle to interpret these agreements.

One South-Asian team told me at the student showcase that though they understood a great deal of English, it was not their native tongue nor did they fully understand the 'How will my entry potentially be used' section of the rules. A Middle-Eastern team which spoke reasonable English yet had translatory assistance told me they had accepted the rules without fully being aware of these rules, and were uncertain of how the rights to their own creation could now be used.

Two European teams of which I spoke to, one team of which struggled with speaking English, told me that based on my colleagues' interpretation of the rules and regulations, they would not have entered the competition at all.

One South American team which spoke English as their mother tongue understood the rules; one of the students studies law and computing. However they believed that the event would be a networking opportunity and could attain employment at Microsoft. Though some competitors in the past have gone on to becoming employees, LeVine stated that there was "no causality between the event and employment". After telling the students this, they were clearly disheartened.

I inadvertently caused a minor argument between the teammates at this point.

So, what's the deal?

In short, students who do submit their products, services, applications and beyond all, excellent work to Microsoft through this competition keep their intellectual property rights. That's the good news.

The bad news is, is that you allow Microsoft a broad and loosely-defined license to your work in connection "with the competition". Though, of course having hundreds of departments and areas of the corporation, the strict boundary of the competition is wide ranging and can infringe upon areas which may not be directly involved with the competition itself.

Howell said students can still use their submission as they would like, though if it turns out Microsoft develops something similar (and this in itself is interesting: this could be past, present or future) then you waive your right to claim they took the idea from you or claim compensation for it.

Intellectual property is one thing, but students should be very wary of handing over irrevocable rights to your work, and be aware that you may get either no compensation from it, or worse - no recognition.

Topics: IT Employment, CXO, Enterprise Software, Government, Government US, Legal, Microsoft

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38 comments
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  • And this is a BAD thing..?

    Let's see...

    You get $25,000 USD cash. Not bad.

    You get to put the fact you won this competition on your resume (CV for you since you're a Brit).

    Even if you can't market that particular app for time immemorial, you still have that rather impressive feather in your cap that could net you a pretty darn good paying job or lucrative future programming gigs.
    Wolfie2K3
    • RE: Criticising Microsoft's unfair gain at student tech competition

      @Wolfie2K3 It is, but only if you are the one team that wins. Only the winning team gets $25,000 - and second and third place fall behind with ?10,000 then $3,000. Basically, the numbers don't add up. With all the teams in the final - over 130 groups and only one winner from each category, 95% walk away with absolutely - yet Microsoft still has the licence to use your work.

      See - now that's not fair!
      zwhittaker
      • What?

        @zwhittaker

        It's easy. Don't enter their competition and sign the deal. If you do that, knowing this, then you deserve what happens.
        Michael Alan Goff
      • Zac's right again

        @zwhittaker Even the public disclaimer made by Microsoft will not override the agreement the students are forced to sign-and I don't believe for a minute that Microsoft wouldn't take every advantage they can to make a buck. Who knows what value might be in one of these entries? Any student might come up with the basis for a whole new and highly successful OS, and could stand to make a handsome profit, but no, it will belong to MS. I can't think of any greater disincentive for competition than this kind of deceitful contract. These students probably aren't lawyers, and shouldn't have to hire one to enter a contest. I suppose that that are also not allowed to copyright their own work prior to entering (That would break Bill & Melinda's heart).
        Papa_Bill
  • RE: Criticising Microsoft's unfair gain at student tech competition

    But I thought it was Apple who shamelessly steals good ideas... at least that's what the Apple Haters keep saying.

    As NZ says "Cue the Double Standards"...
    athynz
    • And you thought correctly

      @athynz <br><br>Apple does indeed steal good ideas, Steve Jobs is very strict about what he chooses to steal. Jobs is a gentleman thief, he is both refined and very picky when stealing. True, oftentimes he fails to grasp the full extent of what he steals and messes things up but until now all those marginal cases have been successfully addressed by his <i>Reality Distortion Field</i> and all has ended well.

      Meanwhile Microsoft developed a much more relaxed approach, they steal without giving much thought to it (only money matters.) They are neither picky nor refined when stealing and they are certainly no gentlemen. Their poor results live to reflect Microsoft's relaxed attitude.
      OS Reload
    • Idiot

      @athynz

      I don't think this blog is about Apple and your post is about as irrelevant as it gets. It only exposes you as a petty and childish Apple fan boy, who apparently had their feelings hurt lately.
      Economister
      • Looks like I touched a nerve here

        @Economister

        How have my feelings been hurt recently? I don't own an iPhone 4 if that is what you are referring to... oh wait, you are one of the ones who keeps quoting Jobs saying that Apple shamelessly steals good ideas, right? And now here we have Microsoft in a position to steal ideas from students who usually do not have the protections of a larger tech company - but I guess that's okay because it's not Apple stealing these ideas it's Microsoft that is in a position to do so if they so chose.

        So judging by your knee jerk reaction you see the double standard here and won't admit it. Tell me, just how is the comparison between what Jobs has said and what Microsoft is doing here irrelevant? After all Microsoft DID steal the idea and code from Apple's original Macintosh OS to make Windows 1.0... but don't let the facts stop you from calling me names and attacking me personally....
        athynz
    • Except it isn't theft

      @athynz

      By joining the competition, you give them permission. It's part of the deal.
      Michael Alan Goff
      • RE: Criticising Microsoft's unfair gain at student tech competition

        @goff256 Sure... if one reads the fine print and really how many of these students will do so? And as the article said there are those who would not have even entered if this particular clause was made clear.
        athynz
      • RE: Criticising Microsoft's unfair gain at student tech competition

        @goff256 and @athynz (below) Yes, it is part of the deal but it's important to point out that students do need to seriously consider the pro's and con's of these sorts of competitions or events, because they could end up seriously losing in the long run. Losing money is one thing, but losing the ability to claim recognition for something I would say is far worse.
        zwhittaker
  • RE: Criticising Microsoft's unfair gain at student tech competition

    Seems normal for these types of competitions. Usually its the university that retains the rights of the projects, some professor takes all the credit, then moves on to bigger things, and the cycle repeats. And since these are students they would have released it under a free license anyway. If Microsoft needs to evaluate it then so be it.
    Loverock Davidson
    • Rubbish as usual

      @Loverock Davidson <br><br>MS is not a university, which may have spent time and money educating and supervising students, and will probably continue to do so, even better, if they were to benefit in any significant way. Universities spend their money for the ultimate benefit of the students, and therefore society. MS compensates its management and shareholders. A BIG difference, don't you think. Or maybe that is too big a concept for you to grasp, when MS is involved.
      Economister
      • Re-read the last two paragraphs.

        @Economister

        These two paragraphs reflect the problem I saw since the agreement was quoted, and as it has been explained by the experts quoted.

        The student may have completed a well-designed bit of code, but if MS mysteriously comes up with that same bit of code or something similar enough in the future, MS gets to copyright or patent it, locking out the student developer.

        And as to those who think that the students have the simple option of not signing and competing after reading the agreement: I think you are missing the facts that a) many do not speak English natively, b) native English speakers have trouble with the legalese used in the contract (which is entirely by design, for the advantage of whomever has a contract drawn up), and c) do you expect these small groups of students to hire teams of contract and IP lawyers to get a clear definition of what the contract means?
        seanferd
      • Oops

        @Economister No, the universities should have no rights here either. The students pay dearly and work their butts of to learn this stuff. The knowledge the schools have the SELL to the students.
        Papa_Bill
    • RE: Criticising Microsoft's unfair gain at student tech competition

      @Loverock Davidson This contract/rules and regulations are normal for these types of competition - you are not wrong there. Similarly, when a student at university submits work - there could still be IP rights held by the university. But - just because they are students doesn't mean they can't profit from their work, and it's wrong for a company to hijack these rights for their own gain.
      zwhittaker
      • RE: Criticising Microsoft's unfair gain at student tech competition

        @zwhittaker but you clearly mentioned that students still own the intellectual property and IP rights.

        If students see a potential (happens rarely) of making a profit, they can license IP to so many other companies. They can also choose to sell the software/hardware directly to consumers.

        Most importantly, MS is not stopping students to license their work to others or sell it.

        You also mentioned that if the competition was arranged by an university, then university professors would hold the IP and copyrights.

        Clearly, taking part in MS event is better than what universities are offering.

        Hope this clears the mis-understanding you are in about such competitions.
        samunplugged
    • If MS holds a "contest"

      @Loverock Davidson it should be exactly that - a means to encourage young people to enter the program development world. It should NOT be simply a means to rob the best and brightest minds of their talent. Tha same goes for *all* other companies - in all industries - who might engage in such legalized theft (No, of course MS isn't the first)
      Papa_Bill
  • The kinder, gentler Microsoft?

    Interesting discussion, but let's say a student comes up with the next killer application that turns out to be worth a fortune. The rules are somewhat ambiguous and their meaning has to be "settled in court". The student has no money and MS has billions. Anybody care to predict the outcome?<br><br>This is just another example of how MS operates. They could simply include a line that said they retained rights to evaluate the entries only for the purposes of the competition only. The real killer to me is the apparent right MS has to code its way around any obligation whatsoever. MS is just using the students hoping to get a brilliant idea for next to nothing. Typical MS behavior IMHO.
    Economister
    • RE: Criticising Microsoft's unfair gain at student tech competition

      @Economister Your first paragraph is exactly what I am arguing. I doubt it's limited to just Microsoft - and them being a good example in this case, it seems fitting. Nevertheless, I think you're absolutely spot on.
      zwhittaker