Microsoft and Skype at loggerheads over patents

Patent protection is hindering innovation according to Skype, as the battle threatens to involve China

The ongoing row over software patents — as well as the role intellectual property rights (IPR) might eventually end up playing in China — surfaced again this week with telco BT seemingly ending up taking the middle ground between two names rarely out of the tech headlines these days, Microsoft and Skype.

Speaking at the European Leadership Forum (ELF) in London on Tuesday, Microsoft EMEA president Neil Holloway came out with what is now a familiar cry from the Redmond software empire — that it should legally be able to protect its investment in intellectual property.

It's a common refrain and a position held by most of the big software vendors.

However, it is not a view held by a new breed of software providers. Among those was fellow panellist Niklas Zennström, chief executive of VoIP darling Skype, bought in September by eBay for a sum upwards of $2.6bn (£1.5bn).

"Software patents are hindering innovation. Patents should be granted when there is real innovation and real investment in innovation," Zennström said.

Big software vendors are filing for hundreds of patents per year — in addition to thousands granted by patent offices annually — sometimes as defensive measures but often now as a revenue stream or bargaining tool with rivals in their own right.

Zennström singled out 'one-click' ordering, as patented by, as an example of the latter.

At the ELF event, which is put on by BusinessWeek annually, the subject of China's rise and that country's infamous disregard for intellectual property rights came up a number of times. BT CTO Matt Bross said in a matter of a few years — at the point when China has generated more IP of its own — IP will be better respected.

"When there is a war chest of intellectual property [in China] we'll find they are really quite good at enforcing IP," he said.

"Try to counterfeit an Olympic T-shirt in Beijing [in 2008]... and you'll find out real quick" how the attitudes are changing to IP, he added.

Skype's Zennström added that being open with his company's software and allowing others to develop plug-ins — helping create the Skype ecosystem — isn't always easy.

"We allow third-party developers to develop on our platform. It's a great way to do it. We are helping them be successful. But there is a mental threshold you have to go through. People [at Skype] say 'Maybe we could have done that'," he said.

BT's Bross said the culture at the UK's largest telco has changed so much in the past few years that now at the company's Martlesham research headquarters there are many entities — likely to include people from other companies and entrepreneurs — mixed in with BT's own people, such has been the change in thinking about the best way to move forward.