Let the Litigation Begin

Any time a news bulletin begins by quoting lawyers, you know it cannot be good news.

Hence the most predictable event of 2007 began with Microsoft shysters rattling their Monte Blanc sabers with naked threats of suing Open Source vendors for usurping Microsoft patents. Horatio Gutierrez, Microsoft's vice-president of intellectual property and licensing initiated legal blackmail by opining "The alternatives to licensing are alternatives that aren't very attractive for anyone."

That was as subtle as a Russian invasion.

Microsoft contends that various Open Source solutions employ 235 of their patents. No Open Source Sacred Cows are omitted, with Microsoft citing Linux, Open Office, and various email programs as illegal interlopers. Microsoft even claims the Linux "user interface" has improperly leveraged Microsoft IP (Now, but "user interface" do they mean Gnome or KDE? They can't possibly mean X-Windows that proceeded MS Windows by a considerable period of time.)

A recurring theme in Microsoft's veiled threats is eerily similar to the now near defunct SCO -- bombastic claims are not being public vetted. Microsoft is very closed lip about what specific patents are allegedly being violated and how. SCO tried this tactic against IBM and is facing delisting, bankruptcy, and a permanent mention in the Software Scoundrel's Hall of Fame, just below Microsoft current position therein.

Larry Augustin, a former Silicon Strategies Marketing client via his VA Software days, doesn't buy the threat either. He recently blogged "If Microsoft believes that free and open-source software violates any of their patents, let them put those patents forward now, in the light of day." Fat chance Larry.

And herein lies the backbone of Microsoft's move and recent Novell bed matting: There is good chance that Microsoft's claims would be difficult to prosecute, and in doing so would give the Open Source community the information they need to fix any alleged violations. SCO faced the same conundrum. The difference is that SCO was tiny and poor compared to IBM, the giant whose shins they chose to kick. Microsoft is huge compared to Linux market share leader Red Hat. IBM stood firm, Red Hat likely would not. Thus bluffing and blackmail are more tenable tactics for Microsoft than actual litigation and revealing their hand to those who could remove the source of the threat by changing the code in Linux and Open Office.

If that was not enough chess for you, take into account that blackmail and litigation may be the only tools available to Microsoft. No vendor of GPL-based Open Source can pay royalties to Microsoft for the patents. GPL is fairly explicit about this saying that payment of royalties of verboten, with the only recourse being that you must stop distributing Open Source at all ("If you cannot distribute so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not distribute the Program at all." ). Imaging Red Hat losing in court, and having to get our of the Linux distro biz.

This puts Microsoft in a tough spot. Drive Open Source vendors into court and they may well drive them out of business without killing Open Source itself. The revenue stream goes away but the market share threat remains. Linux would not die, but the means of distribution and support would change. It would be like nailing Jell-O to the wall, and very unprofitable. Thus Microsoft seeks to tap into Open Source revenues by making their enemies their partners.

There is a useful old adage that says "Keep your friends close, and your enemies closer." Microsoft is in effect trying to make their competitors their partners, and extract money from them at the same time. If this sounds a bit like a neighborhood mob protection racket, then you are not alone.

The troubling part is not that Microsoft is acting like a schoolyard bully and rifling for other vendor's milk money. It is that they are executing their eternal "embrace and extend" process through forced and polygamous marriages. Since Open Source vendors cannot pay royalties, they must enter into partnerships to avoid litigation and being forced by GPL to exit the distribution business. Terms of these partnerships are set to ensure Microsoft's place in the data center, and to allow Microsoft to influence new features in vendor distributions. Since the main distributors also are the primary maintainers of Open Source stacks, there will be considerable pressure to include impure elements into future releases, and possibly make Open Source even more vulnerable.

The Open Source community was already taking action, with changes to the still-born GPL3 license. Fearful of the Microsoft/Novell pact, they sought to make life even harder on Open Source distributors with tweaks that would prevent such partnerships in the future, by enforcing a "blanket indemnity" for all users and partners. This in effect would force make Microsoft offer open-ended indemnity to their customers who used partnered Open Source products. Slick move guys!

The business lesson herein is that force works, but only if the target is direct (such as the when Verizon went directly after Vonage's jugular) and your foe cannot easily change the either the rules of the game (GPL3) or the source of conflict (Open Source code). Microsoft will bluster, bully, and maybe even send one of it's stockpiled attorneys for a little face time with Red Hat. But in the long run (and it is the long run that counts) they will be out maneuvered. Marketing requires building on something real, and thus far there is little real behind Microsoft's meanness.