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Microsoft Raises Limits on Intellectual-Property Protection

Discussion in 'General Marketing' started by ovi, Jun 26, 2005.

  1. ovi

    ovi Guest

    By strengthening its indemnification policies, the software giant is, in effect, throwing down the gauntlet to the Linux community, which has been an ongoing hotspot for disputes over intellectual property in recent years.
    Microsoft Latest News about Microsoft is offering a greater measure of legal security to its technology partners by increasing the level of intellectual-property protection it provides to PC manufacturers, systems builders and independent software vendors who use Microsoft's products.

    By strengthening its indemnification policies, the software giant, in effect, is throwing down the gauntlet to the Linux Latest News about Linux community, which has been an ongoing hotspot for disputes over intellectual property (IP) in recent years.

    High-profile cases, such as that brought by the SCO Group Latest News about SCO against IBM Latest News about IBM and other Linux vendors, have created a greater awareness of IP issues and management in the technology marketplace.

    Microsoft said the hardware and software partners covered by the policy generate some US$18 billion in annual revenue, which they obviously want to keep.

    Covering All the Bases

    Microsoft's enhanced indemnification policy includes protection for software patents, copyrights, trade secrets and trademark disputes. The policy covers current and future versions of products, including Windows Server Latest News about Windows Server products -- such as SQL Server and Exchange Server -- as well as all Office and Windows software.

    This move follows previous indemnification efforts by Microsoft, including the removal of monetary limits for volume licensees in 2003 and the extension of IP protection to end users late last year.

    "This is part of an ongoing redemption effort following the introduction of Licensing 6.0 four years ago, which caused an uproar among Microsoft's customers by raising fees," said Yankee Group analyst Laura DiDio. "As Linux gained ground, the company re-examined its strategy and changed its software-assurance program."

    Paying for Protection

    By putting more teeth into the indemnification policy, said DiDio, the company is reassuring its installed base and emphasizing the differences between it and the open-source movement. "It's about protecting the company's assets," she said.

    DiDio cited a study showing that while Linux is touted by its backers as a low-cost alternative to the Windows world, a majority of businesses using the open-source software spend from $100,000 to $1 million on indemnification protection. Linux vendors HP and Novell Latest News about Novell, for example, offer limited indemnification to their customers.

    "Now Microsoft is telling the PC vendors and other partners, 'You can trust us, you have nothing to worry about in terms of intellectual property rights threats,'" DiDio said. It is a strategy that might very well keep those partners in the fold.

    Indemnification is an issue in the open-source community, said Michael Goulde of Forrester Research, but there are some companies, such as JBoss and OpenLogic, that provide IP protection by offering to rewrite offending code.

    "Open-source customers are consulting with their legal counsels, but indemnification is not a critical determining factor for businesses examining Linux versus Microsoft," Goulde said.

    Source: cio-today.com/story.xhtml?story_id=12200002O7G0

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