MS Indemnifies Customers Against IP Threats

bigtallmofo writes "Microsoft announced today that it will indemnify nearly all its customers against claims that their use of Microsoft software infringed on any intellectual property rights. The only exception will be for embedded versions of Windows, since vendors are able to modify the source code. Is Microsoft opening itself to defending thousands of lawsuits against their customers?"

Comments

Will help with all the existing lawsuits...

[cdrguru]

... except there aren't any.

I don't see any coming, either. Of course, this might just be a trick to prevent a big one that MS knows could come, but I doubt it.

Re:Will help with all the existing lawsuits...

[sqlrob]

What about TimeLine suing MSSQL users?

re: will help with all the existing lawsuits...

[ed.han]

this is about something much bigger:

"the company plans to make indemnity a new plank in its "get the facts" campaign, which touts the advantages of windows over linux."

IOW, it's benefitting from SCO's FUD. of course, at some point, SCO will run out of gas, these IP cases go away, but for those M$-thralls whose contracts renew, that resolution will probably come too late.

Re:Will help with all the existing lawsuits...

[gewalker]

Gee, I guess you never heard of SCO.

For once, MS is doing a good thing, Though I'm sure they will spin it to their advantage, this is one of the actual advantages of commercial software to users of such. Since vendor is making money off of the software, they can afford to take the risk of patent infringement.

All commercial software vendors should do this.

And yes, MS products have been affected by this before. MS gets sued over patent infringement regularly, and some of the IP holders have threatened to go after individual users.

Re:Will help with all the existing lawsuits...

[tanguyr]

"astroturfing" is when companies plant fake messages which make it look like their product/service/whatever enjoys massive grass roots support (hence the name). When a company releases a press release, that's not astroturfing since a) you know the statement is being made by the company and not some "man on the street" and b) you (hopefully) know enough to take anything a company says with a grain of salt (including official financial statements).

As for IP issues being "manufactured"... that's debateable. We don't need to get into a long debate about the merits of a certain Utah based firm's claims, but people at all levels of open source development are certainly more aware that there are more questions than "does it compile?" when receiving a patch.

Other than that: yeah, it's just more Microsoft marketing mumbo-jumbo, designed to furthur the "nobody ever got fired for buying Microsoft" line. In a way it's kind of flattering that this 300 billion USD gorilla seems so threatened by linux. On the other hand... marketing is what commercial companies do.

This is a big statement by M$

[EmagGeek]

Of course, they are saying the following:

1) We have never stolen anyone else's code
2) Even if we did, we believe it cannot be proven
3) If someone does claim to prove it, we will destroy them in court

1 + 2 + 3 = We own all software anyway, so you don't have to worry...

Re:This is a big statement by M$

[John Seminal]

Of course, they are saying the following:

1) We have never stolen anyone else's code 2) Even if we did, we believe it cannot be proven 3) If someone does claim to prove it, we will destroy them in court

All companies are like this, to some extent. They quickly decide what costs more, to go to court or pay out a claim. Think about cars. Back when Ford had those bad tires and cars rolled over. Rather than change the tires on ALL fords, they decided the one death per 100,000* would cost less to settle in court. *number made up to illustrate point.

But I think this is a good move on Microsofts part. They are standing behind their product. I like that. Now if they will stand behind it a little more and offer a product the customers want rather than one which seems to be more and more filled with drm.

Re:This is a big statement by M$

[SatanicPuppy]

A big statement would be:

"We will indemnify customers against time lost due to exploits found in our own code."

Until they have that clause, I'm not holding my breath.

Re:This is a big statement by M$

[pavon]

No it doesn't say any of those things. In fact all it really says is this:

If Microsoft infringes on someone's IP, it is Microsoft that is liable, not their customers.

That was true regardless of whether they made the statement or not. The only purpose of this announcement is to create doubt that other software may have this liability, but MS software definately doesn't.

In particular they want you to think that open source software does have a potential for liability. Don't get me wrong - simply using a peice of software does not infringe on any IP rights, regardless of whether it is open source or not. However open source software lets you redistribute and modify it. If you redistribute software which infringes someone's copyright you might have some liability. In reality I'm pretty sure that the person who originally redistributed the software under an open source licence would be at fault for illegally sublicencing a copywritten work, and the people who redistributed the software later under the open source license would not be liable.

But basically this is just an empty statement that Microsoft is making to help prop up it's FUD campain.

Re:This is a big statement by M$

[EmagGeek]

Well, this is a little different than the Ford/Firestone case. In the latter, the customers were perfectly free to drive within the speed limit, keep their tires inflated to proper spec, and to not kill themselves. This issue was between the Customer and the manufacturer.

The microsoft issue is between the Customer's Vendor, and the customer's vendor's competitor. The customer really should have nothing to do with IP claims over software they buy to use. SCO has no business suing Linux end users over IP claims. SCO's beef is with the Linux authors, but customers are easier to go after because they have money.

It's all a bunch of legal horse shit if you ask me. There's no way a customer should ever be held responsible for the content of stuff they buy from their vendors because they have little or no control over what goes into that stuff.

Re:This is a big statement by M$

[Naikrovek]

(fight club reference)

Multiply number of vehicles in the field (A)
by probable rate of failure (B),
by average out of court settlement (C).

A * B * C = X.

If X is less than the cost of a recall, no recall is made.

It is a common practice to this day.

Here we go

[PigeonGB]

A summary of some posts below:

SCO sues Linux users, prompting fears that Linux is legally scary to have deployed commercially in your business.

Microsoft says, "See? TCO for Linux rises because you need to be ready to pay the legal costs of defending yourself. We at Microsoft, however, will do such defending for you."

A summary of other posts: "Screw you, M$!"

MS trying to use their own patents?

[Slartibartfast]

One thing that occurs to me, not that I harbor an ill will against Microsoft , is that this could be the call to arms of MS gettingready to start trying to collect/stifle with their patent suite. After all, just last week(?), MS pointed out that they feel they have all sorts of rights regarding myriad open protocols. Perhaps this is just to make their customers feel safe, considering what they may be about to try with Linux customers? Thank heavens that IBM can fight this one toe-to-toe.

Re:MS trying to use their own patents?

[Pros_n_Cons]

You're exactly right

They've spent the last 2 years accumulating as many patents as they could, some of them incredibly silly. They are getting ready to mount a legal attack, perhaps to the wine/NTFS/mono(?) distro's of the world. There might be something to this sue the customer thing cause MS has just gave a couple billion to linux companies (novell/sun) in order to clear their name. When they come for linux they sound like they'll come for its customers. Again, I don't know if they can win but they seem to be spending billions which says they atleast think they can.

Let's all sue each other now!

[bigtallmofo]

Everyone buddy up and sue each other now! Microsoft will have to defend us against ourselves.

This isn't the first time

[leroybrown]

Henry Ford did something similar to this in the early 20th century. Other automobile manufacturers claimed to have a patent or some such nonsense on what a car is. They didn't like Ford and wouldn't "license" the idea to him, and threatened to sue anyone who bought a car from Ford. Ford insured his customers against any lawsuit brought against them by the other car manufacturers. It was a huge coup for his business and Ford eventually won out his lawsuit against the other manufacturers.

Question

[gowen]

Is Microsoft opening itself to defending thousands of lawsuits against their customers?

No. It's opening the way for the next attack on the supposed IP irregularities of Linux. Microsoft is an 800lb gorilla, with an enormous patent stockpile to use againts agressors. Just making this promise means they're unlikely to have to go to court.

RedHat, or whoever, aren't. They simply can't make comporable promises. Mix in some FUD from MS's attempts to get licensees from TCP/IP, HTTP etc (slashdot, passim) and you'll keep your business consumers scared away from Open Source.

Ob/. : 3) Profit...

Aimed Squarely at Linux

[antiMStroll]

What possible relevance could this have to core Microsoft products? Very clever actually, insulating MS clients from a non-existent risk in order to imply it's a valid concern. There's no legal path from seller code theft to client culpability. Microsoft's way once again of bolstering the SCO suit (unless they're genuinly worried their Shared Source Initiative unearthing skeletons.).

No Risk

[John Hasler]

> Is Microsoft opening itself to defending
> thousands of lawsuits against their customers?"

No. They are revealing that they know that there is no significant risk of end-users of software being sued.

Harder for the little guys

[Quantum Jim]

Microsoft just wants to make it harder for the little software developing companies and individuals.

It is a really stupid patent system when someone who buys a product in good faith is liable for the other person's mistakes. That's why the big companies - with lots of dough - are promising to fund the legal expendures of their customers. The threat of these kind of lawsuits haven't changed much in the last twenty years (and IANAL); however, the fear of them seems to be increasing. This is extortion insurance - in my outraged opinion.

If this becomes standard practice, then these guarantees to indenify users will cost the individual and small software company developers much more than the big guys. Imagine that the only reason people can't start a development factory are the (non life altering insurance) legal costs rather than physical constraints. That's f'''ed up!

Good news!

[budhaboy]

I have decided to indemnify each and every person on the planet from damages resulting from this bottle of vitamins sitting on my desk.

Not only am I indemnifying you from damages from the bottle, but also the contents!

You may now all pay homage to me as your God.

Another brick in the wall of "protectionism"

[crovira]

America is bricking itself off. Now every idea will have to be bought and paid for. The barriers to entry will be such that what created America will cease to exist.

Since any idea can be found to originate with the words used to express it, that will mean the slow strangulation of original thought; just because you'll have to pay God knows who, probably some lawyer who's acquired a bunch of patents, God know how much, every time the light bulb goes off in your head. (The imagery owes something to Edison.)

It won't take too long before you stop attempting to act and then to even think.

Okay....!

[jd]

Microsoft faced lawsuits in the past over actual or alleged stolen software. The cases have tended to drag on for ages, be expensive for the plaintif, etc.

In light of the switch in tactics by the RIAA and MPAA, it might have dawned on Microsoft that future litigants might go after consumers of Microsoft products, rather than Microsoft itself. Such a tactic could, potentially, reap plaintifs far more money for a lower investment. If used by a competitor, it could also potentially cripple Microsoft by scaring off customers in future.

I think Microsoft has a great deal of reason to be concerned, especially if they are continuing along the path of misappropriating other people's stuff.

The devils in the small print - LOOPHOLES

[NZheretic]

Even Microsoft's 2004 May 27th changes which apply only to customers under enterprise licensing contracts, which Microsoft claims grants greater immunity, contains many loop holes which greatly negate Microsoft's liability.

The section 6 clause contain exceptions:
Our obligations will not apply to the extent that the claim or adverse final judgment is based on (i) specifications you provide to us for the service deliverables; (ii) code or materials provided by you as part of service deliverables; (iii) your running of the product, fix or service deliverables after we notify you to discontinue running due to such a claim; (iv) your combining the product, fix or service deliverables with a non-Microsoft product, data or business process; (v) damages attributable to the value of the use of a non-Microsoft product, data or business process; (vi) your altering the product, fix or service deliverables; (vii) your distribution of the product, fix or services deliverable to, or its use for the benefit of, any third party; (viii) your use of our trademark(s) without express written consent to do so; or (ix) for any trade secret claim, your acquiring a trade secret (a) through improper means; (b) under circumstances giving rise to a duty to maintain its secrecy or limit its use; or (c) from a person (other than us or our affiliates) who owed to the party asserting the claim a duty to maintain the secrecy or limit the use of the trade secret. You will reimburse us for any costs or damages that result from these actions.

Loophole #1 "(ii) code or materials provided by you as part of service deliverables" This would effectively still indemnify Microsoft against most of the Timeline Inc patent claims, as it is the developer/end user's code ( even visual basic code ) which would be in violation of Timeline's patent claims.

Microsoft licensed Database/Datawarehouse technology from Timeline Inc, but unlike Oracle and other database vendors, Microsoft chose a license that did not grant Microsoft's customers the right to fully use that technology.
http://www.theregister.co.uk/2003/02/20/sql_server _developers_face_huge/
Timeline has extended it's patent claims to cover many featured widely used by developers, both ISV and in house.
http://www.winnetmag.com/Article/ArticleID/41479/4 1479.html

Timeline Inc has won a US Washington Court of Appeal judgment against Microsoft for the right to sue Microsoft's customers, and subsequently sued Cognos. On February 13, 2004, Cognos settled at cost to Cognos totaling $1.75 million.
http://www.timeline.com/021304PR1.htm

Microsoft has a history of licensing third party code and patents in such a manner that still leaves developers and users exposed to IP threats. Even going back to the LZH/GIF Unisys patents
http://web.archive.org/web/20020806173115/http://w ww.unisys.com/about__unisys/lzw/

"Microsoft Corporation obtained a license under the above Unisys LZW patents in September, 1996. Microsoft's license does NOT extend to software developers or third parties who use Microsoft toolkit, language, development or operating system products to provide GIF read/write and/or any other LZW capabilities in their own products(e.g., by way of DLLs and APIs)."

Other Loopholes include (v) and (vii), but the killer is (iv), which disclaims any
indemnity for users who wish to input any data. (ix)(a), also since literally it excludes trade secret liability for improper action on
anyone's part, including MS.

Does Microsoft's new agreement include such loopholes? Anyone have a link handy?

FUD, and /. bought it?

[RealProgrammer]

This is just FUD, I think.

Intellectual property falls into the following general areas. Infringement is completely different for each area:

1. Patents

   Anyone using patented technology (even in a "device" they didn't make) can infringe. However, the idea that some patent holder would sue Microsoft customers for patent violation strains the imagination. I suppose as a business tactic someone might do it to hurt MS, but the negative feedback they would get would dwarf any harm done to MS. Maybe after they sue Microsoft first, but I can't imagine Microsoft a) letting it get that far and b) leaving the patented technology in place.

2. Copyrights

   FUD. Unless you make copies and distribute them to others and harm the owner of the copyright in doing so, you don't infringe. I see no way a Microsoft customer can be liable for copyright infringement without also infringing against Microsoft.

3. Trademarks

   FUD. If you just use Microsoft products, and don't display the products to others, I don't see how you can violate some hypothetical third party's trademark.

4. Trade secrets

   FUD. The only person who violates a trade secret is the one who reveals it. The person who learns the secret is not liable for trade secret violation. They may be guilty of doing illegal things to get the secret, such as breaking and entering, but they aren't on the hook for trade secret violations.

5. Contracts and licenses

   FUD. If you don't sign a contract or click through someone else's EULA to run a MS product, these don't affect you.

6. (What The SCO Group Has)

   It's not known what this is, since it occupies a different reality from our own. OT: the Novell Board of Directors understood in 1995 that they retained the copyrights to UNIX after the sale of the UNIX business to the Santa Cruz Operation.

Is it just me...

[suwain_2]

The software world seems to think that, if I use Windows, and it turns out Microsoft stole code, I am personally liable.

Maybe I missed a (hairbrained?) ruling somewhere that changed the precedent, but wouldn't it seem that I'm safe from lawsuits anyway over Microsoft's code theft?

Not just FUD but free FUD.

[Ungrounded Lightning]

This idemifaction 'issue' seems to be part of the larger FUD campaign against linux.

It's not just FUD but free FUD. They'd have to help defend anyway, because a successful suit against a customer of their products would put their entire customer base in jepoardy and result in an instant migration to another platform and a crash in their sales. (It might also be followed by a suit against their distributors, too.)

As for being FUD, wasn't one of the issues that got settled in the SCO debacle that a user, even of open source that he loaded as source, wasn't liable for damages from the owners of any IP that got improperly included? If so, by promising indemnification they can make people think the legal system will zing them even if it's already decided it won't.