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Treasonous Melco-Microsoft Linux Deal Already Costing Melco Business

Posted in Deals, GNU/Linux, Kernel, Microsoft, Patents at 8:31 am by Dr. Roy Schestowitz

Bad Melco

Summary: Melco’s submissive surrender to Microsoft extortion has immediate negative effect on business

WHEN Melco met Microsoft they decided to have a little racket going by letting Linux vendors suffer while they get their secret protection deal signed. Melco Holdings was one among several, but unlike TomTom for example, it did not dispute Microsoft’s claims and revealed nothing about patents — if any — that Microsoft claimed privilege for. This is what makes Melco selfish and truly damaging to the Free software which it is exploiting. As Information Week puts it in an article about Melco, Microsoft has nothing… nothing that it is willing to show. It only barks and then extorts, even if it is toothless.

The Linux community has argued that their OS does not violate any patents, and has challenged Microsoft to publicly specify exactly which patents it believes are at issue. To date, Microsoft has declined to do so.

Jay Lyman, mostly an advocate of GNU/Linux, spins the whole thing as a partly positive development, but it is wishful thinking.

Supporters of Linux and open source should be able to take the compliment, the validation and the opportunity without alarms going off every time an organization that touches Linux or open source is involved in IP licensing or litigation. After all, tell me, what enterprise organization doesn’t touch open source software in some way today? This is further validation that Linux and open source have arrived and are here to stay.

The Inquirer covered this too and so has Sean Michael Kerner, who emphasises:

Microsoft has not specifically disclosed which patents it is licensing to Melco – which is a cause for concern in my opinion.

As opposed to the TomTom incident where Microsoft exposed which patents it had issues with, in this new deal with Buffalo we don’t know. As such it could be any one or a number of patents that Microsoft has claimed that open source infringes on.

Eruaran remarks: “Send Ballmer and his execs [should go] to jail. That’s what you’re supposed to do with extortionists.

‘Max Stirner’ writes: “I am truly disgusted. I didn’t buy a buffalo router with Linux to pay [...] MS!

“Sad to say, I won’t be buying any more Buffalo products.”
‘SB’ writes: “I have a router that is Buffalo and also some of their USB wifi and all of it works excellent with Linux. Sad to say, I won’t be buying any more Buffalo products. Any company that caves into MS extortion is setting a bad example for the FOSS community. And no, I don’t hate MS or hate Windows. They’re decent products and they have their place. But MS’s behaviour in trying to strong arm everyone to maintain their products dominance with frivolous threats of patent infringement is annoying and stifles innovation. If they really had a case they would have sued every linux vendor and distro a long time ago.

By signing a patent deal with Microsoft, Melco has already lost business. Who is next to do so and end up out of business (sold behind closed doors) like Linspire or virtually on life support like Novell?

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  1. aeshna23 said,

    July 18, 2009 at 8:58 am


    I’m rather sure that I have noticed some people who read BoycottNovell out of opposition to Roy’s position on software patents and related issues. I invite such people to explain why they believe Roy is wrong on this issue, because this issue is a big issue here. A big issue here is not whether RMS (peace be upon him) tells bad jokes or not.
    If we are going to rumble, let’s do it on something important, not the color of the doghouse.

  2. David Gerard said,

    July 18, 2009 at 9:01 am


    I wonder if they paid Microsoft more than a token amount, or are getting other kickbacks – whether Microsoft is viewing this as an exercise in perception management rather than a direct income source.

    Roy Schestowitz Reply:

    Here is what I found out in IRC just minutes ago. Maybe they could use some kickbacks for this ‘medal’ in Microsoft ‘s cartel lineup that helps future intimidation (you’d have to ask them to be sure, but don’t expect answers… remember that Novell was paid hundreds of millions for its patent deal).

    wallc I just finished the Melco article.  wasn’t Melco already a struggling company? Jul 18 14:42
    *amarsh04_ (n=amarsh04@ppp121-45-176-122.lns11.adl2.internode.on.net) has joined #boycottnovell Jul 18 14:43
    *amarsh04 has quit (Read error: 110 (Connection timed out)) Jul 18 14:43
    wallc Maybe they just didn’t have the resources to fight MS?  Microsoft has a reputation for intimidation. Sad, really. Jul 18 14:44
    schestowitz wallc: I sort of hope they were Jul 18 14:45
    -BNc/#boycottnovell-[schestowitz] David Schlesinger “Uses the Little Spat as an Example of Zealotry” http://ping.fm/OmvbV Jul 18 14:45
    schestowitz This ways the deals evaporate Jul 18 14:45
    schestowitz Like Linspire’s Jul 18 14:45
    wallc Microsoft also must truly hate the idea of  hardware that works with Linux Jul 18 14:45
    schestowitz wallc: yes, Microsoft attacks weak companies Jul 18 14:46
    schestowitz Cause this way they get no challenge back Jul 18 14:46
    schestowitz See TomTom Jul 18 14:46
    schestowitz Microsoft sued them DAYS after massive loss Jul 18 14:46
    schestowitz They knew TomTom was at bottom low Jul 18 14:46
    schestowitz Microsoft needs to brag about legal defeat and surrenders Jul 18 14:46
    wallc they always seem to make sure the companies can’t speak about it after the deal Jul 18 14:46
    schestowitz wallc: can you find an article showing that Melco had problems? Jul 18 14:46
    schestowitz if so, we should point it out Jul 18 14:46
    schestowitz wallc: yes, NDA Jul 18 14:46
    wallc i don’t think i read about Melco’s financial struggles in a comment on Groklaw Jul 18 14:47
    wallc oops, I mean I *think* Jul 18 14:48
    wallc oops…not I *don’t* think (even tho i don’t sometimes) : ) Jul 18 14:48
    wallc need more coffee… Jul 18 14:48
    schestowitz OK Jul 18 14:50
    schestowitz Let me add this as a comment Jul 18 14:50
    wallc Melco June financials: Jul 18 14:50
    wallc http://finance.aol.com/quotes/melco-crown-entertainment-limited-american-depositary-shares/mpel/nas Jul 18 14:50
    *littleyoy (i=8fee5438@gateway/web/freenode/x-3eb721dcb662728a) has joined #boycottnovell Jul 18 14:50
    wallc Is that the same Melco? Jul 18 14:50
    schestowitz Doesn’t sound so Jul 18 14:50
    schestowitz I was in their Web site earlier Jul 18 14:51
    schestowitz PageRank 4 Jul 18 14:51
    schestowitz Low profile Jul 18 14:51
    schestowitz it’s called Melco Holdings Jul 18 14:51
    schestowitz Seems like a subsidiary arrangement of one form or another Jul 18 14:51
    wallc lol…okay, guess i’ll go eat some breakfast and give my brain a chance to wake up Jul 18 14:51
    schestowitz A lot of people didn’t even know the company Jul 18 14:51
    schestowitz Some know its Linux *product* Jul 18 14:51
    schestowitz But not the obscure (relatively) company Jul 18 14:52
    schestowitz wallc: OK, laters. Jul 18 14:52
  3. twitter said,

    July 18, 2009 at 9:37 am


    Unable to post to 451 article due to “spam filter”:

    Here’s some information I was able to dig up about this extortion. Their devices all used GNU/Linux and were a favorite for their flexibility and high quality. Wikipedia had a lot of good resources and the popular press also turned up a lot of good reviews. Here’s a group dedicated to making low power consumption, general purpose servers out of their devices. Surely you have heard of similar efforts with the slug. The world of GNU/Linux is as large as the world itself.
    Did I say extortion? Yes, I did, Jay. You see, I’ve never heard of you till now, but I think you have arrived as a GNU/Linux reporter. Your clumsy, in a cute hobbiest way compared to me, but we can make a deal to help improve you. I know all sorts of tricks about writing articles that I can share and I’ve got several patents on them all. We don’t need to go into the details in public, but I’m sure you will be pleased to not suffer my wrath in court. All you have to do is issue a statement praising our new partnership and send me a little money every month. Then you will be free to do as I say with your writing. I’m sure you will love using my masterful style, which has been so successful in the market place that people are just lining up to avoid court battles over it. How could you have ever been so blind?

    End post.

    It is not easy to find financial information about the company. There are many with the same name that are much larger. I recall finally finding their page in IRC. The above links to a favorable, five year old Wintel rag review, wikipedia and specific group resources.

    How much money is involved is besides the point. Not one penny is owed to M$ for GNU/Linux use, even when people make it talk to M$’s crappy software.

    Roy Schestowitz Reply:

    Jay is one of the good guys. It would help being more polite.

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