Microsoft Sale Of Linux Patents Roils Open SourcersMicrosoft Sale Of Linux Patents Roils Open Sourcers

Microsoft put 22 patents up for sale in July, listing them all as in the "open source" category, with some of them, "Linux-focused." The ultimate buyer was the Open Invention Network, a consortium of Linux backers that wanted to take them off the market.

But in between Microsoft marketing and OIN ownership there was a bit of behind the scenes maneuvering. OIN was never approached by Microsoft to buy the patents, even though it was an obvious, interested party.

And the actual bidder, Allied Security Trust, was acting as a front man for OIN as well as its own 11 members. OIN was approached by AST "early in the process and invited to be a surrogate bidder," unbeknownst to Microsoft, says OIN CEO Keith Bergelt.

When AST's bid won the auction, AST and OIN signed a deal that made OIN the ultimate holder of the patents. The irony of the maneuver is that it was an unlikely outcome.

AST normally bids for patents on the open market, licenses its members to protect themselves from them, then quickly resells the patents. By using this "catch and release" policy, it leverages its members investments and gets income that allows it to protect its small membership from more patents. One result is that many AST acquired patents end up on the open market and in the hands of patent trollers, who claim royalties from companies whose products might be covered by their patents.

Linux Foundation Executive Director Jim Zemlin charges that Microsoft's goal in selling the patents was to get them into the hands of patent trolls, via AST. It takes a minimum of $5 million for a company to defend itself from a patent claim, even if the claim is later found to be without merit, he said. Many companies settle rather than fight it out in court.

Furthermore, he said in an interview conducted as he traveled in Korea, Microsoft knew all about AST's "catch and release" policy. AST is made up of a group of reputable companies, including HP, a Linux reseller, that buy patents together for their own protection.

AST offered cover for Microsoft, if it wanted to raise questions about whether Linux was subject to patent litigation, without launching patent battles itself. Even if a court ruled ultimately that a patent didn't cover Linux, news of a legal battle over Linux would prompt some companies to avoid adopting more use of Linux until the patent disputes disappeared, Zemlin said.

"Microsoft thought it was undermining Linux in a way where they could keep their hands off" the actual litigation, he charged. He commented more extensively on the deal in a blog titled, Protecting Linux From Microsoft (Yes, Microsoft Got Caught).

"It is important to note that we talked with multiple product companies that are members of OIN as well as AST. If OIN wished to present an offer, nothing would have stopped them from doing so," said David Kaefer, general manager for IP licensing, in a statement to information Friday.

Red Hat, which has been a target of Microsoft's patent claims in the past, went even further. Microsoft used "marketing materials that highlighted offensive uses of the patents against open source software, including a number of the most popular open source packages," the company said in a blog posted to its site Wednesday. Red Hat's Enterprise Linux is one of those packages. The auction was Microsoft's "latest attempt to encourage patent aggression by trolls against free and open source software," the Red Hat blog stated.

Microsoft, asked to comment, said in a prepared statement: "We are constantly evaluating our patent portfolio--which recently received top ranking in the software industry--to ensure its makeup fits into the business goals of our organization. These patents were deemed to be non-core to our business and non-essential to our IP portfolio." The statement was attributed to David Kaefer.

Microsoft did not respond to a specific question about whether it had labeled some of the patents as "Linux-focused." It didn't respond by press time to a follow up question on whether its marketing material included suggested targets for patent claims.

"When an interested buyer for this technology was identified, after discussing it both internally and with the potential buyer, we felt this was the right direction to go in relating to these specific patents," Kaefer's statement concluded. The terms of the deal were confidential, he added.

In February 2007, Microsoft President Steven Ballmer and General Counsel Brad Smith claimed that it held 235 patents that were violated by open source code; the Linux kernel and graphical user interface accounted for 107 of them. Companies with Linux products needed to reach a pact with Microsoft that would give them the right to continue to distribute Linux without danger of being sued by Microsoft, both executives said at the time.

Ballmer said during that period he wanted Red Hat to reach such a deal with his firm. Red Hat spokesman said it had refused.

Microsoft acquired the 22 patents several years ago in a larger deal with SGI, the former Silicon Graphics Inc., and the patents have been labeled by some sources as only concerning 3D graphics. OIN CEO Bergelt said that's not correct. The patents are more valuable than that. Some of them affect core Linux operations, he said.

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