Microsoft Wants to 'Kill' Open Source

The Redmond giant said open-source software violates hundreds of its patents; bloggers ask which ones, and how it plans to collect

by Aaron Ricadela

Now that the computer industry has its first accounting of how many patents Microsoft says are violated by open-source software, the question for many tech vendors is how aggressively the software giant will begin enforcement. And judging from the reaction in the blogosphere, the new disclosures inspire fear.

Microsoft has already begun collecting payments and gaining access to the patent portfolios of companies that use the open-source Linux operating system in their products. The list includes Novell (NOVL), Fuji Xerox, and Samsung Electronics.

License to Code

Microsoft sees those agreements as templates for future cross-licensing deals, and it's rattling a legal saber to gain an edge. When it comes to compensating Microsoft for its intellectual property, discussion is less painful than litigation, according to Horatio Gutierrez, Microsoft's vice-president of intellectual property and licensing. "The alternatives to licensing are alternatives that aren't very attractive for anyone," he says.

Microsoft contends that the Linux operating system and other open-source software programs violate 235 of its patents. The company plans to use that intellectual property to collect royalties from companies that make, distribute, and use Linux. Microsoft's plans were disclosed in a May 14 article in Fortune.

Linux and other open-source software are covered by the General Public License (GPL), which lets users modify programs' source code so long as they redistribute their changes to other users. Microsoft says the Linux kernel, which controls the software's most basic functions, as well as other elements of Linux and open-source productivity and e-mail software infringe on its patents, Fortune reported.

Let's Make a Deal

Now, the question is how will Microsoft collect. The GPL prohibits companies that sell or use Linux from paying royalties for technology embedded in its code. But a licensing deal Microsoft struck on Nov. 2, 2006, with Novell, distributor of the Suse version of Linux, appeared to circumvent that restriction by enacting a pledge by the companies not to sue each other's customers for potential patent infringements (see BusinessWeek.com, 11/3/06, "Linux Linkup for Microsoft, Novell").

As part of the deal, Novell agreed to pay Microsoft a portion of its Linux revenue worth at least $40 million. But Joe LaSala, senior vice-president and general counsel at Novell, says none of his company's software violated Microsoft's patents, and that the agreement was about technical compatibility between the companies' products. "We're quite explicit about that," he says. "We've heard their arguments."

Nevertheless, Microsoft has pursued deals that incorporate similar legal principles. Among these are licensing deals Microsoft struck on Mar. 22 with Fuji Xerox, a joint venture between Fujifilm Holdings (FUJI) and Xerox (XRX); and on Apr. 18 with Samsung. Gutierrez says the arrangements resemble aspects of the Novell agreement. Those companies received licenses from Microsoft for technologies used in Linux and other open-source software contained in products they sell. "Nobody thought it was possible to build a bridge between the worlds of commercial and open-source software," Gutierrez says. Microsoft is also considering other means of compensation for its Linux-related intellectual property, he adds.