If you earned $34 million a day from Windows and Office, you too would try to spook the market with patent threats
Last week, Microsoft (MSFT) initiated what can only be described as a rather bizarre public-relations campaign in which they alleged that Linux and Open Office may violate hundreds of the software maker's patents. While some of the mainstream press reported Microsoft's statements as news, many journalists and bloggers keenly identified the most intriguing aspect of this aggressive maneuver: a glimpse of a threatened giant struggling to keep a grasp on its empire. What most people don't realize is that the story really isn't about patents at all—it's about a rational actor trying to protect its privileged position.
In the time it will likely take you to read this article, Microsoft will have made $500,000 in net profit. It's instructive to note that the majority of that profit comes from its Windows operating system and Office suite of business software. Not coincidentally, those are the two product lines most threatened by Linux operating systems and Open Office.
Patent Wars Shortchange Customers
Given the high stakes involved, it's not surprising that Microsoft would take steps to protect its turf. In fact, it makes perfect sense. Let's face it: If you were making $1 billion a month, what would you do? Perhaps engage in rhetoric and hyperbole to generate some old-fashioned FUD (fear, uncertainty, and doubt)? Just looking at the numbers, it's easy to see that even if the scare campaign merely delays a customer's migration from Windows to Linux by a single day, Microsoft is $34 million dollars better off.
But as we said before, Microsoft is, above all, a rational actor. The software maker is hesitant to instigate a patent war, as it has too much experience with the downside of such litigation. Just ask Microsoft about its MP3 patent dispute, in which a jury recently ordered the software maker to pay $1.5 billion to Alcatel-Lucent (ALU).
The Linux Foundation's membership comprises hundreds of companies, organizations, and individuals heavily invested in the continued success of a vibrant Linux ecosystem. Microsoft, our membership, and software users in general all know that a patent war guarantees only one sure outcome: The customer loses. Customers want choice and innovation. That's why open-source is winning. That's why Microsoft should embrace open-source to bolster competition in the marketplace. Competition will make us all better. Even Microsoft.
Reform the Patent System
The Linux Foundation does believe the current software patent system is problematic. The superpowers have their stockpiles. The trolls have their stashes. Rather than spurring innovation, which is of course the raison d'être of the patent system, today's patent games will divert dollars away from research and development in the U.S. Instead, those dollars will fund innovative activities in countries that have better things to do with their time and money than litigate.
That said, we are also rational actors working within an existing system. Touch one member of the Linux community, and you will have to deal with all of us. Microsoft is not the only—perhaps not even the largest—owner of patents in this area. Individual members of the Linux ecosystem have significant patent portfolios. Industry groups, such as the Open Innovation Network and our own legal programs at the Linux Foundation, aggregate our membership's patents into an arsenal with which to deter predatory patent attacks. With our members' backing, the Linux Foundation also has created a legal fund to defend developers and users of open-source software against malicious attack. We don't expect to but, if needed, we will use this fund to defend Linux.
In 2005, Microsoft General Counsel Brad Smith called on Congress to reform the patent system for software, stating reforms were needed to curb "abusive litigation." We agree. In fact, we call on Microsoft to work with the Linux ecosystem to restore confidence in the patent system by making sure they are issued only for truly unique, innovative, and novel functions that advance the state of the art.
We ask Microsoft to stop engaging in FUD campaigns that only serve to undermine confidence in the U.S. intellectual-property system. Instead, please work with us to make the patent system tighter, more reasonable, and efficient for everyone in the software business.