Do Windows users have an "undisclosed balance-sheet liability" too?

Back in November, Steve Balmer claimed Linux users had an "undisclosed balance-sheet liability" because, he said, Linux was taking advantage of Microsoft innovations and patents. Perhaps Mr. Balmer should be more worried about Windows users. Could they face the same kind of liability, only on a much grander scale?
Written by Ed Burnette, Contributor on

Back in November, Steve Ballmer claimed that "every Linux customer has an undisclosed balance-sheet liability" because, he said, Linux was taking advantage of Microsoft innovations and patents. Perhaps Mr. Ballmer should be more worried about Windows users, who might face the same kind of liability under this logic.

Ballmer's unspoken threat was that if Microsoft so chose, it could sue Linux users or distributors like Novell and RedHat for patent infringement, and if it prevailed in court, could be awarded a possibly large amount of money (hence the "balance-sheet liability" part). As you know, MS believes that Novell paid it for the right to tell its customers that SUSE Linux was appropriately covered, i.e., that Novell had licensed those patents (whatever they might be) and thus was not subject to being sued. Novell may have other ideas about what they were paying for, but that's beside the point.

In a blog today, John Carroll says we should all stop bashing the Microsoft/Novell agreement because "Microsoft probably does own a few patents that intersect with technology found in Linux". Despite many calls from the community, Microsoft has not come forward with a list of claimed infringements (does this remind anybody of SCO?). So does John have insider information about these patents? No, his argument is:

What are the odds that a company that spends billions of dollars writing an operating system used by most computer users in the world does NOT own patents that are relevant to Linux? Remember that study back in 2004 that claimed to find 283 potential patent risks in the Linux kernel? That list was hardly definitive, as who knows how a judge will choose to interpret the text of a patent, and besides, that's just the kernel. Add on the entire stack of software that makes up a typical Linux distribution, and you get potential risk galore.

It's hard to argue with this, given the size of a modern operating system and the thousands of vague software patents that could, with a good lawyer, be interpreted to cover everything from cascading menus to french toast. But look at this next part. John continues, (my emphasis added)

The odds are high that most software potentially trips over a patent somewhere... Microsoft products included. I doubt Microsoft could have predicted the risk posed by the EOLAS patent, a patent that governed the ability to automatically use binary extensions in a web page.

John goes on to ask "What is Linux going to do about it?". I think the real question is, "What is Microsoft going to do about it?". Applying the logic of Ballmer and Carroll to Microsoft Vista one could say:

"What are the odds that companies like IBM, HP, and Oracle (just to name a few) that spend billions of dollars writing operating systems and other software do NOT own patents that are relevant to Vista? Add on the entire stack of software that makes up a typical Windows distribution, and you get potential risk galore."

So who is going to indemnify Windows users against all those infringements which, according to the statistics, must exist in Vista? Since Microsoft believes that that folks like Novell and Red Hat owe it money for using its innovations, then it stands to reason that Microsoft should owe others like IBM, HP, Bell Labs, Apple, and many many others for the innovations it has made its billions from. The potential "balance-sheet liability" for users of Microsoft Windows would be unprecedented! What is Microsoft going to do about it?

I'm making this point not because I seriously think Windows users are at risk of getting sued, any more than I think Linux users are at risk of getting sued. I'm making it because I think we're painting ourselves into a corner here. Who can tell what infringes what any more? Also, I wonder if we should even care. Patents were originally created to protect the little guy who invents a gizmo, tries to sell it, but sees another company come along, copy the gizmo, and make all the money selling their version. But today's application of patents to software is completely warped and twisted from that noble idea of fairness and reward for hard work.

John says that "getting rid of [software] patents is not a solution". In my opinion, that is pretty sad. I believe we're wasting our time and talents on paper problems that we invented ourselves. It's like all the obscure tax rules we have to deal with every year - a whole industry of tax accountants and lawyers and preparation software and books and classes has grown up around addressing a problem that doesn't have to exist. Billions of hours of productivity could be regained by going to a simple tax code, possibly an automatic flat tax. Likewise, billions could be saved by dumping this self-induced group nightmare of a patent system.

Countries that see what we're doing and avoid it will be at a competitive advantage. While we sit around gazing at our navels, they will be free to let developers develop, collaborate, and innovate in peace like God and Richard Stallman intended. Think about that during your next "IP due diligence" meeting. Or next year when tax time rolls around.

Editorial standards