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Windows Buyers Pay Patent Tax of $21.50 ?

Posted by Zonk on from the pricy-litigation dept.

An anonymous reader writes "Ars Technica has a story up about an estimate done by the Software Freedom Law Center of how much purchasers of Microsoft Windows are paying in 'patent taxes'. 'SFLA took the total of $4.3 billion dollars in legal costs for Microsoft from 2001 to 2004 and divided it by estimated sales of Windows XP over the same period — approximately 200 million copies — to come up with the $21.50 estimate. The organization added that North American and European customers, who pay more for Windows licenses than customers in other parts of the world, actually ended up paying more of this patent tax, and that people who pirate Windows pass their share of the tax on to paying customers.' The article goes on to point out several flaws in the study's logic. For example, the actual cost of a Windows OEM hasn't increased in the last few years; Microsoft isn't passing this cost directly on to the consumer."

11 of 161 comments (clear)

  1. Let's Not Forget That M$ Has More Products than XP by rhartness · · Score: 5, Interesting

    I'll admit, I only skimmed the article, but if M$ spent that much money, total, on patent legal fees, that money needs to be divided evenly against the revenue of all offered products.

  2. Invalid assumptions by overshoot · · Score: 3, Interesting
    That "patent tax" isn't being paid by purchasers -- it's being paid by Microsoft's stockholders.

    Microsoft's pricing isn't driven by their costs, it's driven by revenue maximization. A change in their cost structure has no effect on the prices they charge; raising prices would reduce their gross revenues, which would be quite counterproductive.

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    Lacking <sarcasm> tags, /. substitutes moderation as "Troll."
  3. Re:ohnos the consumer pays developemnt costs by shawn(at)fsu · · Score: 4, Interesting

    Gee who would have thought huh?
    Secondly, this is BS. It ignores the fact that MS sold more products in that period that just WinXP than just an OS, things like Office.

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    500 dollar reward for tip(s) leading to the arrest of the person(s) who stole my sig.
  4. Passing the cost onto consumers by 26199 · · Score: 1, Interesting

    This one always confuses people.

    A business, by virtue of being a business, always charges whatever will (they think) be most profitable.

    There is nothing that you can do to a business that'll make them want money they didn't want before. They already want it all.

    So in a very real sense no cost is passed on to consumers; the market decides the optimal price for the product. If that's high enough to make a profit, the business grows; if it isn't, the business dies. No company can pass on costs that the market is not willing to pay for; and no company will undercharge when the market is willing to pay more.

  5. Wow, that's a lot on the cost of a new license by MikeRT · · Score: 4, Interesting

    Which ranges from $200-$400 for a real, new license of Windows! That's between 10% and 5% depending on the version of Windows.

  6. Patents adding to the cost by Applekid · · Score: 4, Interesting

    That you're paying a "patent tax" is nothing new. You're paying a "tax" on everything. If you've ever bought a pack of smokes you're paying into their legal fees, for instance. It's really just a cost of doing business not related to development nor profits.

    What I'd find more interesting is how much of the cost of Windows goes into licensning patented software. MSPAINT can read and write .GIF files. Windows comes with a media player that can play .MP3 files. Windows natively supports TrueType fonts. How much per copy is going to make sure they're on the up-and-up with those IPs?

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    More Twoson than Cupertino
  7. Re:for years... by Yuan-Lung · · Score: 2, Interesting

    i kept asking for a stupidity-tax.


    Lottery Tickets? Pyrimid Schemes? Informercial diet pills and other psuedo medical/magical items? Spammercial male enhancement products? Cash contribution to cults? Rotten MAFIAA crap?

    Plenty of things to keep fools and their money parted.

  8. Re:Something else to think about. by RHSC · · Score: 3, Interesting

    Ever meet a Microsoft employee? Most of them are really quite nice

  9. That's just stupid by JFMulder · · Score: 2, Interesting

    Let me be the devil's advocate by saying you aren't paying 21.50 in patents fees. Actually, Microsoft is losing 21.50$ on each licenses it sells. See, the price of XP has been going down over the years, not up. So the consumer is paying less and less for XP, while Microsoft is paying more and more legal fees.

  10. Re:Something else to think about. by Headcase88 · · Score: 2, Interesting

    To me your bolstering the AC's point, not diminishing it. There is no excuse for knowingly empowering evil with your efforts and talents, just because you want the money. But I'll be sure to forgive any hitman who kills my family. After all, they gotta make a living, right? Why, I'll bet the hitman didn't even get to choose who to kill, so it's not their fault.

    The real hole in the AC's argument is that not everyone agrees that Microsoft is "evil". Calling someone criminal scum for working for a company that you aren't fond of is a little bit stubborn.

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    "When the atomic bomb goes off there's devastation...but when the atomic bong goes off there's celebraaaaation!"
  11. Re:Something else to think about. by Farmer+Tim · · Score: 3, Interesting

    They have worse than hitmen: they have lawyers.

    The worst a hitman can do is kill you, but a lawyer can make death look like the better option.

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    Blank until /. makes another boneheaded UI decision.