Microsoft Asserts Patents, Wants Weaker System

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To some observers, Microsoft Corp. seemed to have an odd sense of timing when it complained recently that open-source projects have allegedly violated 235 of its patents.

At the same time, Microsoft's Washington, D.C., staff is pushing for a patent overhaul bill that would make it tougher for patent holders to sue and collect large damage awards against infringers.

That patent reform bill came up for debate Wednesday, just days after Fortune published a story in which Microsoft officials claimed widespread violation of its patents in open source software.

Some patent experts suggest there might be more at work here than just good timing. Late Wednesday, the House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property voted to send the Patent Reform Act on to the full committee, the first step toward passing the bill into law.

"I do think it was an interesting coincidence that this was the key week for debate on patent reform," said Stuart Meyer, a partner at the Fenwick & West LLP law firm in Mountain View, California. "It seemed like interesting timing to raise the debate."

Microsoft, a supporter of the tech-centric Coalition for Patent Fairness, has argued in recent years that it's too easy for patent holders to sue infringers and to shut down product lines containing a small piece of patented code or equipment. The coalition also has a broader goal of improving the quality of patents issued, but one of its major arguments has been that courts have gone too far in protecting patent holders.

The wide-ranging patent legislation would allow a nearly unlimited window for patents to be challenged after being granted by the U.S. Patent and Trademark Office. Another provision would limit damages based on the number of patents within a product, instead of the current practice of considering the total value of the infringing product.

The bill would also limit the jurisdictions where patent lawsuits can be filed, and it would make it harder for patent holders to collect large damage amounts by proving willful infringement.

Microsoft has voiced strong support for the bill.

Microsoft representatives say the open-source patent claims and its support for the bill are separate issues. "Our hard work and good intentions on getting much-needed reform in the patent system has nothing to do with the speculation" about the timing of the open-source complaints, said Ginny Terzano, a Microsoft spokeswoman based in Washington, D.C.

Other patent experts suggest it's a curious time for Microsoft to raise the open-source issues.

It appears that Microsoft is trying to use the open-source community to pump up debate about patent changes, said Ronald Riley, president of the Professional Inventors Alliance and an opponent of large-scale patent changes.

"Microsoft is using this as a PR stunt to drive their patent-reform agenda," Riley said. "They want to pass patent reform, and they want the open-source people to carry their water."

Other patent experts have suggested Microsoft's patent complaints don't make a lot of sense from a legal standpoint. The complaints, while possibly driving some customers away from open-source software, may make Microsoft the target of lawsuits from open-source developers seeking to prove they have not infringed, some patent experts have said.

Open-source advocates, including Linux creator Linus Torvalds and long-time open-source advocate Eric S. Raymond, have said there's a simpler explanation for Microsoft's action: It's trying to create fear, uncertainty and doubt about open-source software.

"It is nearly ... certain that those patents are all junk," Raymond said of the Microsoft claims. "That is, they do fail the originality or obviousness-at-state-of-the-art tests. This means they will be challenged and thrown out almost immediately after Microsoft actually asserts them."

Riley agreed that the complaints, which didn't identify specific patents being infringed, would be the basis for a shaky legal strategy. But Microsoft has a bigger agenda -- driving patent reform forward, he said.

"On it's face, this stirs up a hornet's nest," he said. "There has to be a purpose to it. Microsoft doesn't need the [licensing] money from open source. It's not likely to be a lot of money."

Other patent experts suggested that Microsoft's use of open-source advocates to drive the patent reform debate would be counterintutitive at best. Microsoft's views on patents differ greatly from many open-source developers, particularly in the free software community that spawned the open-source movement.

Many free software advocates believe software shouldn't be patentable.

Microsoft's position on patents is more nuanced. The company and the Coalition for Patent Fairness want changes that they say will strengthen the U.S. patent system. Excessive damage awards impede innovation, Microsoft has argued, but the company wants a strong patent system.

Microsoft and many other large tech vendors also argue that too many junk patents are awarded. They've pushed for separate legislation that would give the Patent and Trademark Office more funding.

Asked to square the company's open-source complaints with its support for weakened patent protections, a Microsoft spokeswoman forwarded a company statement. The company didn't respond to a request to talk to Microsoft General Counsel Brad Smith.

"At Microsoft we look at patent issues from a comprehensive point of view," the company said in its statement. "On one side, we are one of the nation’s largest investors in R&D and holders of intellectual property rights, filing nearly 3,000 patent applications ... each year. On the other side, our popular products and strong balance sheet make us among the largest targets of patent litigation in the country."

Microsoft spends close to US$100 million a year defending itself against dozens of patent lawsuits, the statement said.

The company wants to build an "intellectual property bridge" to other vendors in the IT industry and to the open-source community, the statement continued. One example of such a bridge is the November marketing and patent deal Microsoft signed with Linux vendor Novell Inc., the company said.

"Prior to this deal many thought that it would be impossible to build an [intellectual property] bridge, especially when you consider the escalating litigious climate," Microsoft said. "However, customer reception to our bridge building efforts has been overwhelmingly positive and is encouraging more solutions of this type."

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