Microsoft Bangs TomTom to Submission
News Analysis. Microsoft is the big winner in the settlement announced today with TomTom.
The settlement was inevitable; only the terms were uncertain when Microsoft filed the patent infringement suit on March 2. The lawsuit was bad news for both companies—business for TomTom and PR for Microsoft.
Microsoft announced limited terms of the settlement, which covers past and future products. TomTom licenses disputed patents, which means it pays Microsoft money. Microsoft licenses four TomTom patents, and the press release specifically says Microsoft pays TomTom nothing. TomTom also agrees to remove some file management capabilities within two years. The agreement is for five years.
The settlement probably won't end the bad PR for Microsoft but intensify it for at least a short while. Reason: Linux. Microsoft had claimed that three of the disputed patents covered TomTom's implementation of the Linux kernel. The settlement is sure to further galvanize debate in the open-source community, which rallied to TomTom's defense.
Neither company really had the will for a protracted legal fight. It was more a question of who blinked first. Microsoft has enough problems, particularly with the European Union, where TomTom is based. The EU's Competition Commission has two open Microsoft antitrust investigations, one of which is close to conclusion. TomTom couldn't afford a protracted legal battle, particularly during a global recession. The company posted pro forma revenue of 1.748 billion euros in 2008, with net earnings of 143 million euros, which declined 36 percent year over year. With debt of 1.1 million euros, TomTom wasn't ready for a patent battle that could have raised questions about its future and products. Settlement was inevitable.
Microsoft is the big winner because the settlement:
•Affirms some of the more than 200 alleged patent violations by open-source software. TomTom's licensing adds some legitimacy to the patent claims; other alleged violators might be less willing to fight.
•Ends a dispute regarding the widely used FAT. The file system is intellectual property for which Microsoft expects to be paid.
•Furthers Microsoft's increased emphasis on intellectual property licensing. The company has realized that IP can generate lots of revenue. IBM caught onto this years ago.
•Puts a commercial Linux vendor in its place. For all the talk about interoperability, Microsoft still treats Linux as the enemy. What Microsoft can't gain competitively, it can get through litigation.
•Supposedly reaches terms that fall within the scope of GPLv2 (General Public License Version 2).
TomTom was an easy target because it couldn't easily fight back. But there was risk. Microsoft hasn't identified the patents alleged to be violated by open-source software. A court battle would have eventually forced Microsoft to fess up, even if under cover of trade secrets protected by the court
source
The settlement was inevitable; only the terms were uncertain when Microsoft filed the patent infringement suit on March 2. The lawsuit was bad news for both companies—business for TomTom and PR for Microsoft.
Microsoft announced limited terms of the settlement, which covers past and future products. TomTom licenses disputed patents, which means it pays Microsoft money. Microsoft licenses four TomTom patents, and the press release specifically says Microsoft pays TomTom nothing. TomTom also agrees to remove some file management capabilities within two years. The agreement is for five years.
The settlement probably won't end the bad PR for Microsoft but intensify it for at least a short while. Reason: Linux. Microsoft had claimed that three of the disputed patents covered TomTom's implementation of the Linux kernel. The settlement is sure to further galvanize debate in the open-source community, which rallied to TomTom's defense.
Neither company really had the will for a protracted legal fight. It was more a question of who blinked first. Microsoft has enough problems, particularly with the European Union, where TomTom is based. The EU's Competition Commission has two open Microsoft antitrust investigations, one of which is close to conclusion. TomTom couldn't afford a protracted legal battle, particularly during a global recession. The company posted pro forma revenue of 1.748 billion euros in 2008, with net earnings of 143 million euros, which declined 36 percent year over year. With debt of 1.1 million euros, TomTom wasn't ready for a patent battle that could have raised questions about its future and products. Settlement was inevitable.
Microsoft is the big winner because the settlement:
•Affirms some of the more than 200 alleged patent violations by open-source software. TomTom's licensing adds some legitimacy to the patent claims; other alleged violators might be less willing to fight.
•Ends a dispute regarding the widely used FAT. The file system is intellectual property for which Microsoft expects to be paid.
•Furthers Microsoft's increased emphasis on intellectual property licensing. The company has realized that IP can generate lots of revenue. IBM caught onto this years ago.
•Puts a commercial Linux vendor in its place. For all the talk about interoperability, Microsoft still treats Linux as the enemy. What Microsoft can't gain competitively, it can get through litigation.
•Supposedly reaches terms that fall within the scope of GPLv2 (General Public License Version 2).
TomTom was an easy target because it couldn't easily fight back. But there was risk. Microsoft hasn't identified the patents alleged to be violated by open-source software. A court battle would have eventually forced Microsoft to fess up, even if under cover of trade secrets protected by the court
source
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