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Microsoft's "shared-source" scheme, a response to the growing popularity of open-source software, is a "Faustian bargain," says lawyer Craig Horrocks.

The shared-source approach, which lets some large users see Windows source code but not alter it, could rebound badly on software developers who are careless at building mental walls between their own legitimate intellectual property and what they have learned from perusing Microsoft code.

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Shared source could severely handicap those developers who have seen Microsoft code, if not forbid them from developing in an open-source framework, Horrocks said in a recent address to the New Zealand Computer Society.

Microsoft itself warns in its shared-source agreements of the danger of "impairing intellectual property."

Microsoft first raised the issue of shared source in a presentation to New York University's Stern School of Business in May 2001. Craig Mundie, senior vice president of advanced strategies at Microsoft, said then that the open-source software philosophy embodies "a strong possibility of unhealthy forking." Forking is the emergence of two materially different versions of a product, drawing on the same intellectual property.

Microsoft displays "a sorry history of FUD" (baseless spreading of fear, uncertainty, and doubt) and an "inconsistent" attitude when it comes to relations with the open-source community, said Horrocks in his recent comments.

Papers in circulation "attributed to Microsoft" pose dark hints of damage to the United States' ability to best overseas competition in innovation. They suggest that the insecurity of open code could make hacking easier and put consumers at risk. The various open-source licensing schemes let developers see and alter code at will, though some demand that the resulting code be distributed under the same license.

Digital Rights Considered

Horrocks, whose law firm, Clendon Feeney, took Microsoft to the New Zealand Commerce Commission over alleged anticompetitive licensing practices, also criticized recent licensing changes in the direction of digital rights management.

Microsoft has signed agreements with unspecified partners to manage their intellectual property on their behalf, and the terms of use of the property may change without notice to the ultimate user, Horrocks noted.

"Digital rights management effectively says, 'We, Microsoft, may change your [the user's] rights to anything,'" Horrocks said. He noted that Microsoft will not even disclose who its partners are.

Such changes would be expected to arrive in the form of an automatic online update to "security" features. There is some doubt whether the terms of any such update "fully and fairly inform the user," as expected in contract formation, Horrocks added. "Most users would just press the 'accept' button."

Richard Niven of the Open Polytechnic said significant positives have arisen out of digital rights management, but also some dangers. For example, a third party could lock up a user's own copyrighted material, as ISP Xtra seemed to be trying to do with an amendment to its terms and conditions in April. He asked if overzealous protection and even appropriation of intellectual property would become a trend outside Microsoft.

In reply, Horrocks called Xtra's move a question of "lovable idiocy." Microsoft's DRM moves, however, are "deliberately coordinated," he says, and the company is coming to see itself as "the policeman of the digital world."

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