Microsoft profits from Linux patent FUD

Microsoft profits from Linux patent FUD

Summary: For the first time, Microsoft has publicly gotten a company using Linux servers to say that they've signed a Linux patent licensing deal, but it's far from the first time that Microsoft has convinced Linux-using businesses into paying for Linux.

Patent Absurdity

Microsoft has long made some nice cash from convincing Android vendors that they should pay them for Linux-related patents. Now, for the first time, a company that uses Linux on its servers. Amdocs has publicly paid off Microsoft for patents covering Linux. Mind you, there's never been any proof that Linux violates any of Microsoft's patents. Despite that, several C level executives have made similar contracts and tell me that Microsoft has been shaking them down for Linux patent licensing agreements for years.

One involved attorney explained, “Microsoft has been doing this for years, although I don't know whether a patent cross license, as compared to a monetary payment, has usually been part of the deal.” An executive added, “ In our case we had no patents of our own. We had to sign an NDA [non-disclosure agreement] barring us from revealing any of the Microsoft's Linux infringement claims.”

Why would a company do this? A C level executive told me, “We use a lot of Microsoft software as well, and it was cheaper than fighting with them over our contracts. We want to do business, not fight over legal claims that have nothing to do with us.”

Another told me that, When Microsoft bought the Novell patents  in 2011, “We knew Microsoft had to share those patents under the GPLv2, but our in-house counsel thought that didn't mean that Microsoft still couldn't charge for their use.” So this business decided “It's just part of the cost of doing business with Microsoft if you use Linux in the data-center and who doesn't?”

This doesn't come as much of a surprise for those of us who've been following the business side of Linux. Jim Zemlin, executive director at The Linux Foundation, said, "Microsoft's patent license agreements are not news. The company is trolling for dollars and companies are compelled to settle for less money than it would cost to litigate with Microsoft.”

Zemlin continued, “The key to remember here is this: When Microsoft signs a patent license agreement with a company and that company uses Linux, it doesn't mean that the company concluded they needed a license for Linux. It only indicates that it concluded it needs a license to at least some of the Microsoft patents. Patent license agreements cover any and all technologies between the two companies. In the case of Amdocs: yes, they run their business on Linux servers, as most companies do today, but it is a mistake to conclude that Linux was the impetus for the licensing agreement. For Microsoft this is an attempt at another sound bite for a tired and dying FUD campaign."

Mark Webbink, a visiting professor of law at Duke University, executive director of the Center for Patent Innovations at New York Law School and former Red Hat agreed. “I don't think this is the first MS patent licensing deal covering Linux on servers, and like the others it is a licensing deal with a user, not a Linux 'developer/distributor. (d/d)'"

“What continues to fascinate me, Webbink said, “is that, with the exception of Novell, those d/d's remain license free. You would think if it really had something, MS would have asserted patent infringement against Red Hat a long time ago.”

This was, however, to Daniel B. Ravicher, Executive Director of the Public Patent Foundation (PUBPAT)  the first he'd “heard of MS asserting patents against users of Linux on servers, although it doesn't surprise me. They stopped innovating long ago, so all they can do now is try to become a leech on Linux. They'll have to take cheap payments or eventually go to court, and with the range of equitable defenses that can be asserted against them, including patent misuse, I think they'd have a tough road to hoe there.”

In the meantime, though, until some business decides to fight Microsoft's Linux patent claims, or Microsoft does after a Linux distributor, it appears that, just like with Android, Microsoft will continue to profit from unproven Linux intellectual property claims.

Related Stories:

Microsoft inks patent deal with service provider using Linux servers

World's most profitable Android company? Microsoft!?

Linux patent defense group expands open-source protection

Microsoft gets Novell's Patents rights but must share them with Open-Source Software

What is in those Microsoft Linux patent agreements?

Topics: Linux, Data Centers, Enterprise Software, Legal, Microsoft, Servers

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  • Kudos to Microsoft

    They are a for profit company and have to protect their IP or they lose it.
    • Welcome to the Grand illusion

      Come on in and see what's happening
      Pay the price, get your tickets for the show
    • Kudos to Apple too

      They are a for profit company and have to protect their IP.
      Liverack Dovidson
    • Another one

      Oh look, another moronic troll. If you don't protect a TRADEMARK, you lose it. IP (ie: patents) don't work that way.
    • Its true. Its not like others give away IP.

      Lets put some of SJVN's own point right out front;

      From one company’s attorney:

      “In our case we had no patents of our own. We had to sign an NDA [non-disclosure agreement] barring us from revealing any of the Microsoft's Linux infringement claims.”

      So thus ends the nonsensical claims that even the companies paying Microsoft do not know what the Linux infringement claims are. That was such obvious trash. Of course they know what the infringement claims are.

      And this one:

      "Microsoft's patent license agreements are not news. The company is trolling for dollars and companies are compelled to settle for less money than it would cost to litigate with Microsoft.”

      So first of all, we know that the agreements made are not for some astronomical sum, secondly we also know that these companies see no peripheral reasons why they should fight it out in court even if it would cost more than to settle. Peripheral reasons ALWAYS include the main reason, that if the claim is baseless and you give in it would only invite more baseless claims. The whole stance of these companies under any circumstance appears to be that they are not afraid of Microsoft making baseless claims in the future based on Microsofts current stance. It strongly suggests that these companies feel Microsofts claims have at least some merit. Companies that fight baseless claims and win can usually get costs.

      Keep all this in mind.

      Lets add this one into the mix;

      “We knew Microsoft had to share those patents under the GPLv2, but our in-house counsel thought that didn't mean that Microsoft still couldn't charge for their use.”

      Ha! And guess what! Looks like your in house counsel was right.

      I just do not get what all the whining is here. Even their in house counsel is saying we think Microsoft has the right to charge for their use.

      Perhaps SJVN thinks Microsoft has become an IT charity. They purchase patents just to share for free?

      Please Please Please people. This is now officially a dumb article without any real point to it.

      Let me sum up what SJVN’s point seems to be.

      As follows:

      Microsoft is a big company. They make lots of money as it is. When they spend money by investing it into patents, they should share those patents with other companies for free. They could afford it. After all, everyone loves Microsoft don’t they? Wont other companys share the love when they get patents Microsoft wants to use?

      You have to give it up man. The whole thing has reached the dead end of Nowhere Street.
      • in reply to cayble

        How much did you get paid from microsoft to comment here?
        [quote]everyone loves Microsoft don’t they? [/quote]

        This shows where you work.
        Jerez Spa
      • Another reply to Cayble

        Your comment is too long and too full of illogical claims to refute step by step. The only thing I'm not quite sure of is do you honestly think the way you write or is your intention to mislead those who don't have full grasp of the subject.
      • OK...

        So they get the patents. Why not publicly show the patents so that if a company (especially a startup) wants to avoid litigation by MS for patent infringement they actually CAN avoid it? Why enforce an NDA unless there is something to hide?
      • where does this go?

        Hi :)
        So if i bought a Mercedes car then it should be reasonable to expect BMW to charge me a wodge of cash because BMW cars use some similar components such as wheels?
        Regards from
        Tom :)
  • The Linux foundation is very well funded

    so why don't they go after MS legally? You know, go to court and force MS to stop this abuse of patents they own?

    Oh, yeah, that would require MS to actually abuse the patents. Probably lose that suit of you go to court.

    Good luck on the spreading of FUD, you are the champion!
    • When it comes to FUD...

      Microsoft are the champions. They made it a household word!! I swear I could hear singing over at One Microsoft Way, "We are the champions."
      Arm A. Geddon
    • What do you mean?

      What would be lawsuit for? They cannot file claims on behalf of companies who did not authorize it.
    • The Linux foundation is very well funded

      Oh really? you are talking about the same non-profit technology consortium right?
    • The Linux Foundation

      cannot go to court against Microsoft because they lack standing. You can only bring a suit if you were the injured party.

      This is why Microsoft is not suing The Linux Foundation, or Google, or anyone else who is not also a Microsoft customer. Microsoft only sues people who won't fight back because it is too expensive to risk the deals they already have in place with Microsoft. If Microsoft sued someone who would actually fight back, their bogus patents would be invalidated. I mean, Microsoft invented the idea of a loading icon, so long as it is on top of the image being loaded, and it runs on a handheld device? That is the actual patent MS is using, which is why they require their victims to sign an NDA before they settle.
      • Exactly...

        To see what happens when Microsoft tries to sue someone who intends to fight them in court just look at the Barnes & Noble Nook Color debacle. Microsoft wanted $30.00 licensing fees per Nook Color shipped. Barnes & Noble was like: "No way, dude, See you in court."

        Did the case ever make it to trial? Nope. Instead Microsoft and barnes & Noble reached an agreement in which *Microsoft* ended up paying Barnes & Noble $300 million dollars.

        The long & the short of it is that Microsoft is acting like any one of a number of fly by night patent trolls, gong after companies that don't have the resources or the will to fight them in court.
        • Speaking of FUD

          I think you meant to say that Microsoft INVESTED 300 million in a partnership deal with B&N as a result of the legal action and NOT that microsoft somehow had to PAY B&N.

          Microsoft took Samsung to task on this same issue and Samsung also entered into an agreement with microsoft. Are you suggesting Samsung doesn't have enough money to fight microsoft?

          Samsung seems to have enough money to fight Apple and Apple has more money than microsoft does. That puts a pretty large hole in your speculation don't you think?
          • "I think you meant to say that Microsoft INVESTED 300 million"

            Oh, right - they "invested" it. Oh, they had to twist B&N's arm using patent claims to make them except that investment!
            Thank you though - i laughed so hard i almost knocked over my monitor.
          • Could B&N have used the partnership as an out?

            it could very well be true that B&N felt they were losing, and made a deal with MS on something MS could use?
            NoMore MicrosoftEver
          • Invested

            I think if we could take a look at that investment deal, we would find that Microsoft got just what they wanted. They wanted money and they invested money to get it. They are probably making money from their investment in B&N as well as their old investment in Apple. That is why you invest money. Why sit on it, when it can be making you money.
          • according to MSNBC


            The Windows creator will invest $300 million in return for a 17.6 percent equity stake in the new business

            To me, the key takeaway is this guarantees the long-term viability of the Nook," said Bob O'Donnell, an analyst at IDC.

            So, MS bought 17.6% of the new company. Sounds like an investment rather than a loss. After all, if B&N had a wonderful case, they didn't need to sell 17.6%, they could have kept if for themselves.