Topic: Microsoft ordered to pay $1.5 Billion for patent violatiion.

[Nemesis]

Link to full article

Why was the award so large?
The verdict, which could mark the biggest patent infringement verdict in history, is based on the total number and average selling price of every Windows PC sold worldwide since May 2003. Although the percentage of royalties being sought was smaller than in many cases, the award is large because it is based on the total price of each Windows PC sold.

Will Microsoft appeal?

Microsoft has said it will ask the current trial judge for relief first, and it may well appeal if it does not get the ruling changed. The judge is on vacation until next week, so Microsoft's motions won't be heard until at least then.

What are the odds that it will be overturned?

Patent cases are among the more frequently reversed types of decisions, so there is some reason for hope on Microsoft's side. At the same time, Bromberg said the judge handling the case has a lot of patent case experience and noted that courts tend to want to uphold the will of a jury.

Personally I am against software patents.  Microsoft is for software patents so this is pretty much a case that reminds Microsoft that patents can be used against them as well as for them (such as Ballmers recent Linux threats)

[Dash Jones]

MS was wondering what it would do with some of it's excess profits last year.  I suppose this at least takes out one drop from the bucket if they are forced to pay.

[Nemesis]

MS was wondering what it would do with some of it's excess profits last year.  I suppose this at least takes out one drop from the bucket if they are forced to pay.

Microsofts profits for the fiscal year ending June 30 2006 were $12.599 billion.  The $1.5 billion in the court ordered payment is 11.9% which I suspect Gates and his stock holders consider more than a drop in the bucket.

Link

[Nemesis]

In a similar vein (Link to full article)

The European Commission has warned Microsoft that it could impose further penalties in its ongoing antitrust case against the software giant.

The Commission said on Thursday that there is virtually no innovation in the 51 protocols in the "No Patent Agreement" where Microsoft has claimed non-patented innovation, as the described features were Microsoft implementations of prior developments by others, or were "immediately obvious minor extensions of prior work".

For the "All IP Agreement", the Commission said that most of the information relates only to solving problems specific to Windows, and will not improve the functionalities of the licensee's own operating systems. The Commission said it has also seen evidence that comparable technologies to these are provided royalty-free.

[TheJudge]

Don't always be so hasty to jump on the hate-Microsoft bandwagon.

Microsoft general counsel Brad Smith quickly issued a statement in response, denying Kroes' contention and insisting that Microsoft has spent the past three years "and many millions of dollars" in an effort to comply with the terms of the antitrust settlement. Smith also noted that an analysis by PricewaterhouseCoopers found that Microsoft's prices for the type of technology and documentation at issue in the case are 30% below what its rivals charge, on average.

"We submitted a pricing proposal to the Commission last August and have been asking for feedback on it since that time. We're disappointed that this feedback is coming six months later and in its present form, but we're committed to working hard to address the Commission's statement of objections as soon as we receive it," Smith said.

http://www.informationweek.com/story/showArticle.jhtml?articleID=197700524

Microsoft has a point there, if it pans out.  They gave the EU the pricing proposal six months ago and the EU turns around to slap a fine on them without further discussion?  I wonder how quick we'd be in rushing to judgment if it was Boeing getting hit like this (then again the EU is known to cut Boeing's legs out from under them in order to protect their own companies).  Could the EU's anti-American sentiments be playing a role here?

[Dash Jones]

a couple million compared to a cool bil that should have been spent?

I'd slap MS with a fine to compensate...



They can afford it still, at this point.

I don't think it's EU's anti-american sentiments at all to tell the truth.  More like that MS has done some serious stuff that peeves us off.  That entire authorization thing and accusing the honest users of piracy, cracking it, and other things...doesn't gain them any allies...and in fact makes people a tad more disliking them.

On the otherhand, their console probably just won the console wars over in Europe with Sony literally handing them the prize.  Xbox and MS just got hoards of fans.  That still doesn't forgive them however for some of their more tyranical practices in business...

[Nemesis]

Don't always be so hasty to jump on the hate-Microsoft bandwagon.

Microsoft has a point there, if it pans out.  They gave the EU the pricing proposal six months ago and the EU turns around to slap a fine on them without further discussion?  I wonder how quick we'd be in rushing to judgment if it was Boeing getting hit like this (then again the EU is known to cut Boeing's legs out from under them in order to protect their own companies).  Could the EU's anti-American sentiments be playing a role here?

There are things Microsoft doesn't like to mention.  That license deal is for documentation that they were ordered to produce in 2004 but still haven't produced in a usable form.  So even if the license was fine it would be useless as the data just hasn't been given to the EU.

Much of the same information was ordered published by the DOJ vs Microsoft case in Nov 2001, they were given a 2 year extension and are now stating they may not be able to do it in that time either.  It is clear to me that Microsoft is foot dragging and avoiding the orders of the court in both the EU and the U.S..

Link to article

"In the 50 years of European antitrust policy, it's the first time we've been confronted with a company that has failed to comply with an antitrust decision," the Commission's competition spokesman Jonathan Todd said.

He said the continuing dispute, almost three years after the Commission ruled that Microsoft had abused the dominant market position of its ubiquitous Windows operating system, was solely due to the company's behaviour.

"You have to look at their attitude faced with other antitrust authorities in other jurisdictions. This is a company that apparently does not like to have to conform with antitrust decisions," Todd told a news conference.

Link to article

The Commission's dissatisfaction with Microsoft's submissions is based on advice from Professor Neil Barrett, the monitoring trustee chosen by both Microsoft and the Commission to oversee Microsoft's compliance with the 2004 antitrust ruling, and TAEUS, a consultancy hired by the Commission to act as a technical advisors.

The monitoring trustee has been much criticized by Microsoft even though they chose him.  They apparently don't like him actually doing the job instead of just rubber stamping anything they send him. 

An example of Microsoft "complying" with court orders.  They were ordered to stop bundling IE with Windows, what did they do?  They integrated it with Windows and continued shipping it.  Microsofts idea of complying with court orders is to continue doing what they were doing that caused the court order to be issued but change the format slightly and claim to have complied.

[Nemesis]

Good news and bad news for Microsoft on this one.

Good:

Award overturned on appeal.

Link to full article

A federal judge Monday effectively reversed a US$1.5 billion patent-infringement award against Microsoft Corp. in a case involving MP3 technology.

As I understand it (from prior readings) one of the two patent violations was overturned due to a Supreme court ruling on how to apply "the test" of what is a valid patent and infringement on a patent which made it easier for a patent to be found invalid and/or not infringed.

Bad:

The overturning is being appealed.

Link to full article

Alcatel-Lucent, the French telecoms equipment maker, will appeal a decision by a US federal judge to overturn a $1.5 billion (£740 million) fine imposed on Microsoft in March for infringing on two patents.

Bad: (Bad for Microsoft anyhow)

The same Supreme Court ruling makes Microsofts Linux patent threats less plausible

Link to full article

ET: How concrete are the claims made by Microsoft that Linux infringes on approximately 235 of its patents, which have not been named?
Linus:How concrete? Since Microsoft hasn't named them, there is no 'concrete'. For all we know, Microsoft just made up the number.

ET: The US Supreme Court recently ruled in favour of Microsoft in its dispute with AT&T. Ironically, could that be used against Microsoft?

Linus: I agree that the recent Supreme Court ruling seems to weaken patents (and they actually left it open whether 'intangible' things like software can be patented at all!), but I actually suspect that Microsoft too is really happy with that ruling. Microsoft is likely to have many more patent problems than Linux could ever have, and in general, most high-tech companies actually dislike patents; so I suspect Microsoft felt relieved that the Supreme Court limited at least some of the insanity of the current patent system.

And it doesn't seem to impact the point of the Microsoft posturing with respect to open source: they seem to be in it for the FUD (fear, uncertainty and doubt), rather than for any actual legal reasons.