“On the same day that CA blasted SCO, Open Source evangelist Eric Raymond revealed a leaked email from SCO’s strategic consultant Mike Anderer to their management. The email details how, surprise surprise, Microsoft has arranged virtually all of SCO’s financing, hiding behind intermediaries like Baystar Capital.”
Summary: OIN scoops up Microsoft patents that were put up for grabs (potentially by patent trolls); similarity to Intellectual Ventures seen
An interesting and highly-cited report from the Wall Street Journal shows that OIN has just acquired ‘anti-Linux’ patents that Microsoft put up for sale. To give some background:
Microsoft Corp. has suggested in recent years that companies using the Linux computer-operating system might be violating Microsoft patents. Now, in an effort to avert any legal threat that might discourage the adoption of Linux, a group of Microsoft rivals is about to acquire a set of patents formerly owned by the software giant.
This article lacks sufficient interpretation of what might be happening here. To quote The Inquirer:
Their plan is to avert legal threats that might discourage the adoption of Linux by buying up a set of 22 patents formerly owned by Microsoft.
But that’s not the whole story. As Groklaw puts it:
Microsoft tried to auction off some patents that they claim relate to Linux. Patent trolls could have bought them. Instead Open Invention Network (OIN) got them. Why would Microsoft wish to get rid of 22 patents that it presumably could sue Linux over? Let’s try to imagine what might have happened.
Let’s pretend you are Microsoft, and you want to be evil. Of course, Microsoft never would be. They are internationally known for fair dealing with all their competition, particularly Linux. But let’s pretend.
OK. So you are Evil Microsoft and you decide it’s too difficult and dangerous to sue Linux yourself. Antitrust annoyances, counterclaims, and PR and all that. What to do with that patent portfolio to really cause trouble for Linux, without having your fingerprints all over it?
Eureka! You could sell the patents to patent trolls, and let *them* be the bad guys. Is that not perfect if you are evil? Not that Microsoft would ever be evil. We all know there is a New Microsoft in the land.
If true it won’t be the first time the OIN has acquired patents in the name of protecting Linux: it was formed for that purpose and it previously did so in 2006, and also last month launched its Distinguished Inventors Patent Acquisition program to acquire patents from individual inventors.
The fact that these patents were previously owned by Microsoft adds a twist to the tale, however. The WSJ cites Dave Kaefer, general manager for intellectual-property licensing at Microsoft, as saying that the patents were acquired from Silicon Graphics and were sold because they weren’t strategic to the company.
Those newly-acquired patents may not do much to ‘protect’ as there are many software patents out there. Had IBM not lobbied for software patents [1, 2] (there is now some coverage of this in TechDirt), it would have been possible to eliminate this problem altogether, at its root. IBM has a lot of influence in this area and it is misusing that position of power.
Meanwhile, to quote David Gerard’s summary, Microsoft has Intellectual Ventures run a “Patent Protection Racket.” Yes, he calls it “protection racket”, just as Mike Masnick called it a “pyramid scheme” and his colleague Tim Lee explains how it all works.
Until recently, one of the few points Myhrvold could make in his own favor is that he hadn’t started suing firms that declined to license his patent portfolio. I say “until recently” because we’re now learning that the lawsuits have started. IV has begun selling off chunks of its patent portfolio to people like Raymond Niro with well-deserved reputations for being “patent trolls.” Threatening to sell patents to a third party who will sue you is more subtle than threatening to sue you directly, but the threat is just as potent. Myhrvold’s “sales pitch” to prospective licensees just got a lot more convincing.
The fundamental question we should be asking about this business strategy is how it benefits anyone other than Myhrvold and the patent bar. Remember that the standard policy argument for patents is that they incentivize beneficial research and development. Yet IV’s business model is based on the opposite premise: produce no innovative products, spend minimal amounts on research and development, and make a profit by compelling firms that are producing products and investing in R&D to pay up. Not only does this enrich Myhrvold at everyone else’s expense, but it also reduces the incentive to innovate, because anyone who produces an innovative product is forced to share his profits with Intellectual Ventures. Patents are supposed to make innovation more profitable. Myhrvold is using the patent system in a way that does just the opposite. In thinking about how to reform the patent system, a good yardstick would be to look for policy changes that would tend to put Myhrvold and his firm out of business.
Nathan Myhrvold and Bill Gates actually did innovate; they invented large-scale patent racketeering. As we’ve shown at the start, Microsoft too is seemingly using the same methods as Nathan Myhrvold/Intellectual Ventures, in order to extort Linux. █
“Intellectual property is the next software.”