South Korea's Fair Trade Commission has widened its investigation into Microsoft's alleged antitrust practices, after RealNetworks filed a complaint charging Microsoft with violating fair business practices by bundling Media Player into its operating system, the same charge that prevailed in the EU.
Meanwhile, Microsoft is quietly moving forward with its patent plans. News.com has a fascinating article that quotes a spokesman as saying that they are seeking to enter into cross-licensing deals with the top 30 technology companies, so that they can have access to the patents they are most interested in and can offer their customers indemnification from patent infringement lawsuits. How charming. A little club. The "We Are The Only Ones Allowed to Write Software Any More" Club. On page two, the spokesman says that they are looking to do cross-licensing deals, not to sue. However, note this ominous phrasing:
"That said, Microsoft is pursuing negotiations with companies it feels are using its intellectual property. 'It's not possible for us to just look the other way,' he said."
So, the assault begins. Are you noticing over there in Europe? Do you see what you have to look forward to? Microsoft can't just look the other way, you know. If you empower them, you will feel it too. The EU has it in the power of its hand to block this patent plan. FOSS companies have few if any patents to cross license, which will no doubt lead to phase two of the strategy. If you want to use GNU/Linux systems, the time to notice what is going on is now.
Speaking of anticompetitive moves, by now you have seen the eWeek report on Microsoft's Royalty Free Protocol License Agreement on Internet protocols and the Larry Blunk email that started it all. Larry Rosen has noted that this license appears to be like the Sender ID license, which means that the obvious remedy is for standards bodies to stand firm against this license. What I haven't seen being covered about the license is its connection to the antitrust settlement. So, let's look at the details.
First, let's take a look at the January status report on Microsoft's compliance with the antitrust case Final Judgments, where it makes clear that licensing the protocols is a result of compliance pressure on the company. The final judgment requires Microsoft to offer licenses to use "the Communications Protocols", so competitors can readily compete:
JOINT STATUS REPORT ON MICROSOFT'S COMPLIANCE WITH THE FINAL JUDGMENTS
The United States of America, Plaintiff in United States v. Microsoft, CA No. 98-1232 (CKK), and the Plaintiffs in New York, et. al. v. Microsoft, CA No. 98-1233 (CKK), the States of New York, Ohio, Illinois, Kentucky, Louisiana, Maryland, Michigan, North Carolina, and Wisconsin (the "New York Group"), and the States of California, Connecticut, Florida, Iowa, Kansas, Minnesota, Utah, and the District of Columbia (the "California Group") (collectively "Plaintiffs"), together with Defendant Microsoft hereby file a Joint Status Report on Microsoft's Compliance with the Final Judgments, pursuant to this Court's Order of May 14, 2003.(1) . . . .
Remedial Goals of Section III.E The Final Judgment requires Microsoft to offer licenses to use the Communications Protocols ("CPs") that fall within the purview of Section III.E. The remedial goals of Section III.E were summarized in this Court's opinion in New York v. Microsoft Corp., 224 F. Supp.2d 76, 172-73 (D.D.C. 2002): As the Court concluded supra, Parts III.B.3.a, III.C.1, server operating systems can perform a function akin to that performed by traditional middleware because they provide a platform for applications running "for" use on a PC. The mandatory disclosure of the communications protocols relied upon by Microsoft's PC operating system to interoperate with its server operating systems will advance the ability of non-Microsoft server operating systems to interoperate, or communicate, with the ubiquitous Windows PC client. Advancement of the communication between non-Microsoft server operating systems and Windows clients will further the ability of these non-Microsoft server operating systems to provide a platform which competes with Windows itself. The Competitive Impact Statement filed by the United States sets forth its view of the role of Section III.E: "This provision will protect opportunities for the development and use of non-Microsoft middleware by ensuring that competing, non-Microsoft server products on which such middleware can be hosted and served will have the same access to and ability to interoperate with Windows operating system products as do Microsoft's server operating systems." Revised Proposed Final Judgment and Competitive Impact Statement, 66 Fed. Reg. 59,452 at 59,469 (Nov. 28, 2001). Accordingly, the remedy embodied in Section III.E is intended to provide developers of server operating system products, and other server software that interoperates with the Windows PC client, with the opportunity and ability to achieve access to the Windows PC client equivalent to that of Microsoft's server software. If software developers avail themselves of that access, middleware solutions residing on servers can be introduced, and that could increase competition to Windows.
The section of the joint status report authored by Microsoft mentions that they would be releasing, under the above pressure, licenses for more protocols:
Remedial Goals of Section III.E
The Final Judgment requires Microsoft to offer licenses to use the Communications Protocols ("CPs") that fall within the purview of Section III.E. The remedial goals of Section III.E were summarized in this Court's opinion in New York v. Microsoft Corp., 224 F. Supp.2d 76, 172-73 (D.D.C. 2002):
As the Court concluded supra, Parts III.B.3.a, III.C.1, server operating systems can perform a function akin to that performed by traditional middleware because they provide a platform for applications running "for" use on a PC. The mandatory disclosure of the communications protocols relied upon by Microsoft's PC operating system to interoperate with its server operating systems will advance the ability of non-Microsoft server operating systems to interoperate, or communicate, with the ubiquitous Windows PC client. Advancement of the communication between non-Microsoft server operating systems and Windows clients will further the ability of these non-Microsoft server operating systems to provide a platform which competes with Windows itself.
The Competitive Impact Statement filed by the United States sets forth its view of the role of Section III.E: "This provision will protect opportunities for the development and use of non-Microsoft middleware by ensuring that competing, non-Microsoft server products on which such middleware can be hosted and served will have the same access to and ability to interoperate with Windows operating system products as do Microsoft's server operating systems." Revised Proposed Final Judgment and Competitive Impact Statement, 66 Fed. Reg. 59,452 at 59,469 (Nov. 28, 2001).
Accordingly, the remedy embodied in Section III.E is intended to provide developers of server operating system products, and other server software that interoperates with the Windows PC client, with the opportunity and ability to achieve access to the Windows PC client equivalent to that of Microsoft's server software. If software developers avail themselves of that access, middleware solutions residing on servers can be introduced, and that could increase competition to Windows.
So that is the purpose. On this page, Microsoft explains further:
Microsoft works with many other companies and industry initiatives to enable Microsoft products to provide interoperability with multiple networks and network services. Network protocols are developed and promoted by a variety of formal standards bodies, industry consortia, and individual companies worldwide. Microsoft actively participates and contributes to the standardization process in many standards bodies and develops implementations to make the Windows operating system interoperable with other products that implement these protocols. In addition, the documentation for a subset of protocols previously provided only under the Microsoft Protocol License Agreement for Development and Product Distribution now reside on MSDN. . . .
If you wish, a royalty-free implementation license is available covering any or all of these published protocols. See the FAQ for more details regarding this license. To the extent that Microsoft is obligated through its participation in standards setting activities to offer licenses on other terms and conditions, Microsoft will also comply with those obligations.
So the list of 130 protocols on Exhibit A, Technical Documentation, attached to the royalty free protocol license agreement, isn't a list of things Microsoft claims 100% ownership of. On the MCCP protocol license home page, Microsoft says this:
Microsoft has also added a subset of the MCPP protocols on MSDN. Many of the protocols used by Windows 2000 and Windows XP client operating systems to interoperate or communicate with Microsoft server operating systems are also available through standards organizations or otherwise published and available from third party sources. A royalty-free license for such published protocols is available from Microsoft, for those who wish to ensure that they have a license under any intellectual property rights Microsoft may have in any or all of those published protocols.
They explicitly say:
Implementation of these Protocols and, to the extent Microsoft is not the owner or sole owner of the Technical Documentation for these Protocols, use of this Technical Documentation may require securing additional rights from third parties. Licensee is responsible for contacting such third parties directly to discuss licensing details.
Therefore, saying that Microsoft came up with this list to try to claim the internet is inaccurate, if you put the period there. If you look at the list of protocols, AppleTalk heads the list, and it's obvious that Microsoft isn't asserting ownership of AppleTalk. However, anyone signing on for a license, under the terms Microsoft sets forth, is signing away rights the implications of which are alarming. Note that Samba has a notice that they will not accept submissions from anyone who has signed:
In order to avoid any potential licensing issues we also ask that anyone who has signed the Microsoft CIFS Royalty Free Agreement not submit patches to Samba, nor base patches on the referenced specification.
Glenn Peterson is quoted in the eWeek article on that very point:
"Glenn Peterson, an IP attorney and shareholder with Sacramento-based law firm McDonough Holland & Allen, agreed with Blunk. 'It is not clear to what degree, if any, that Microsoft has enforceable intellectual property rights in the 130 protocols identified in the so-called 'royalty-free' license agreement. Thus, by signing the agreement as it presently stands, one might be agreeing to certain things gratuitously, meaning simply that the licensee agrees to give Microsoft continuing control over how the protocols are used,' Peterson said. 'Among other things, the agreement gives Microsoft ongoing control over enhancements and updates, including the right to charge a license for them in the future.
"'The Technical Documentation compliance requirement ensures that Microsoft maintains control over interoperations and improvements to the protocols,' he said, adding that this is of even more concern. 'Basically, it prohibits researchers from making enhancements designed to improve interoperative performance. . . .
"'The agreement also allows Microsoft to terminate the licensee on 30 days' notice, and subjects the licensee to the jurisdiction of Washington state courts. It further provides that Microsoft recover legal fees incurred in any dispute over the agreement. . . .Without refinement and clarification of the rights actually conveyed in the agreement, licensees may be shackling themselves with significant contractual burdens that would not apply in the public domain.'"
Leave it to Microsoft to be bad even when it's trying to look good. What they seem to be inviting is a voluntary giving up of rights to their benefit, kind of like the spider inviting the fly for dinner. Sounds fine to them, no doubt, but what would be *your* motive?
The link to the Sender ID license, which Larry Rosen was the first to notice, is significant, and brings that issue back to the fore. The same issues that arose in that matter are also relevant to this license. It's a license that excludes the FOSS community that uses and prefers to use the GPL. Coincidence? I suspect not. But note in Microsoft's FAQ that while you are free to sign away your firstborn to Microsoft if you volunteer to do it by signing the license, any standards body that sets different terms for a protocol trumps the license as far as what Microsoft says it will do, which really makes one wonder why anyone would ever sign up for these licenses. Note how vaguely Microsoft describes what you are getting:
Q. When I sign a royalty-free agreement for these protocols, what am I licensing?
A. The list of protocols under this license includes protocols for which documentation has been published, and that Microsoft has implemented in Windows client operating systems to interoperate with Windows server operating systems (up to and including Windows Server 2003). However, just because a protocol appears on the list does not mean that Microsoft is the owner or sole owner of rights in that protocol or its documentation. What the royalty-free license does is ensure that a license is available from Microsoft under whatever rights it may have in the published documentation and/or protocols on the list.
Q. I noticed a number of these protocols are available for license via other avenues - for instance, under license agreements promulgated by members of a standards setting body. If I already have rights to implement protocols (e.g., under other agreements), do I also have to sign a royalty-free license?
A. No, unless you wish to obtain rights available under the royalty-free license that are not available under other license agreements you may have.
Q. Is the royalty-free license the only way Microsoft is making the protocols covered by it available for license?
A. Not necessarily. For example, some protocols may be covered by previously signed MCPP development agreements (see question on this below); other protocols may be available for license (by Microsoft or others) through, for example, standards setting activities. To the extent that Microsoft is obligated through its participation in a standards setting activity to offer licenses on other terms and conditions, Microsoft will also comply with those obligations.
Q. If I sign a royalty-free license agreement for these protocols, does it affect my rights, or my ability to license them, under other agreements that may be available now or in the future - for instance, under a license agreement offered by Microsoft in connection with its participation in a standards-setting body?
A. No. The royalty-free license does not supersede or replace the terms of any other license agreement relating to these protocols that you may now or later have with Microsoft.
All the bland doubletalk can't change the weirdness of what they say they are offering and why. The ball is, therefore, in the court of the various standards organizations. If they accept exclusionary "royalty free licenses" like Sender ID's and the protocol license and attach them to a standard, they are exiling the GPL from that standard, as Larry Rosen and others have already explained.
Note from the MCCP FAQ that the monitoring of Microsoft under the terms of the final judgment is not eternal, and neither is any MCCP license. For that matter, even during the monitoring time period, the terms of the license are subject to change:
Q. What is the term of these licensing agreements? Can I continue to distribute and develop products implementing the licensed protocols after the end of my agreement and/or the Final Judgment?
A. The term of the MCPP Development Agreement is five years, at which time development rights expire but certain distribution rights continue indefinitely, subject in either case to applicable termination provisions. Licensees may also renew their rights by entering into a new MCPP development agreement under then current terms. Throughout the term of the Final Judgment (which expires in November, 2007), Microsoft will continue to make the covered protocols available on reasonable and non-discriminatory terms. Thereafter, Microsoft will make a license available on commercially reasonable terms to existing licensees who wish to renew their rights to applicable technical documentation upon expiration of their program license agreement.
Q. What if I want to renew my development and distribution license after the end of the Final Judgment?
A. You can sign up to a new license agreement on commercially reasonable terms upon expiration of your program license.
Q. What if there are new covered protocols or changes to covered protocols?
A. For new or changed covered protocols, Licensees will receive updated documentation during the term of the applicable license agreement in place between them and Microsoft, as provided in that agreement, even if it extends beyond the end of the Final Judgment. Licensees may also sign up to a new development and distribution license agreement for new covered protocols contained in Microsoft's next major server release (after Microsoft Windows Server 2003), on commercially reasonable terms if that release occurs after the end of the Final Judgment.
Q. Does Microsoft ever change the program agreements?
A. Yes, Microsoft reviews the program agreements on an ongoing basis and makes changes from time to time. Microsoft will make the revised agreements available to all prospective and existing licensees in accordance with its obligation to offer the program on reasonable and non-discriminatory terms. You can review current documents by returning to this site at any time. . . .
Q. What rights are granted under the program regarding client/server communications with the Microsoft Windows client operating systems that preceded Windows 2000 and Windows XP?
A. Microsoft is authorizing licensees to enable users of their server products to communicate with the predecessor Windows clients, as well as those described in the Final Judgment. This increase in license scope does not require payment of any additional royalties.
They would like you to trust them completely as to the future. Do you? So, why is Microsoft doing this? Rosen, in the eWeek article presented his guess:
"'As much as I can tell, this is the same license that the open-source community found unacceptable in the Sender ID matter,' Rosen said. 'Microsoft now seems to be imposing that agreement on many other potential IETF standards. This is probably Microsoft's strategy, to impose licensing friction in the open-source distribution process,' he said. 'IETF's failure to respond appropriately to the Sender ID proposal has left the door wide open for this mischief.'"
What can be done, if anything? Groklaw began with the idea that FUD only works when the truth isn't well known or understood. I think that fundamental premise has proven sound. I also note that the October Joint Status Report, which Groklaw reported on at the time, said that the Technical Committee is also now monitoring Longhorn "to enable early detection and resolution of any potential areas of concern. Plaintiffs anticipate that these discussions will continue throughout the Longhorn development and testing cycle and will report to the Court on any resulting compliance issues as necessary."
The Technical Committee overseeing Microsoft's compliance may not be aware that Microsoft's "reasonable and nondiscriminatory" licenses are, in fact, discriminatory toward Microsoft's primary competition. Complaints sent to the Technical Committee's attention may have at least an educational effect, if nothing more. Knowledge has its own power over time. Because the Final Judgment requires Microsoft to offer "reasonable and nondiscriminatory" license terms, they should be interested in learning that the license terms in fact unreasonably discriminate against Linux and all GPL software.
The Final Judgment in the case, entered by United States District Judge Colleen Kollar-Kotelly of the District of Columbia in November 2002, mandated the creation of a three-person Technical Committee to assist in both monitoring compliance with and enforcing the terms of the settlement. Complaints may be submitted via email to Complaints@TheTC.org.
There is also a web site established for coordinated state enforcement of federal court judgments against the Microsoft Corporation and they say: "If you believe Microsoft is violating either of the state final judgments, you can file a complaint by submitting an on-line complaint or by mailing a written complaint (along with supporting documentation, if available) to:
"Coordinated State Enforcement of Microsoft Antitrust Judgments
c/o California Office of the Attorney General
455 Golden Gate Avenue, Suite 11000
San Francisco, CA 94102"
Additionally, can you think of any reason why EU investigators wouldn't be interested in anticompetitive behavior on Microsoft's part, including attempts to exclude its principal competition from standards?