Wednesday, February 24, 2010

Microsoft in Patent Deal with Amazon

The Wall Street Journal

Microsoft Corp. said it reached a patent licensing agreement with Inc. that gives the online retailer rights to use open-source software in its Kindle electronic book reader and servers based on the Linux operating system.

Under their agreement, Microsoft said Seattle-based Amazon will pay it an undisclosed sum. Microsoft, Redmond, Wash., said in a statement that the deal was a patent cross-license agreement under which it will also gain rights to Amazon patents that it didn't identify.

The statement from Microsoft said Kindle uses both open-source and proprietary software components made by Amazon.

Open-source programs allow users to view and modify their "source code," or underlying instructions. Linux and other programs that are created with the technique have been among the most effective competitors against Microsoft products.

The licensing deal was viewed with suspicion by open-source advocates, who believe Microsoft has sought to stir legal uncertainty about the technology for competitive reasons. Microsoft has for years said its broad portfolio of intellectual property includes patents that are violated by elements of Linux and other forms of open source software.

Companies that incorporate open-source software in everything from mobile devices to corporate applications could, in theory, face legal challenges from Microsoft, though Microsoft must tread carefully because so many of its customers and business partners use open source technologies.

"If the strategy isn't to create uncertainty around Linux, it's hard to say what it is," said Jim Zemlin, executive director of the Linux Foundation, a non-profit Linux organization.

A Microsoft spokeswoman declined comment. In the company statement, Horacio Gutierrez, corporate vice president and deputy general counsel at Microsoft, said the agreement with Amazon "demonstrates our mutual respect for intellectual property as well as our ability to reach pragmatic solutions" patent issues regardless of whether they involve proprietary or open source software. An Amazon spokesman declined comment.

Microsoft noted that it has reached similar deals with many companies since launching a patent licensing program in 2003, including Apple Inc., Hewlett Packard Co., and Novell Inc.

But Microsoft also took a more aggressive stance with a lawsuit it filed early last year against TomTom NV, in which it alleged that the Dutch maker of GPS navigation devices violated a collection of Microsoft patents in TomTom's Linux-based devices. TomTom countersued Microsoft for alleged patent violations, and the two companies later settled their disputes for undisclosed terms.