Felix Stalder on Fri, 12 Nov 2004 05:19:39 +0100 (CET)

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<nettime> Creating Monopolies of Knowledge

This is an extraordinary article, because the Microsoft person is entirely 
open about what they want to do. Here, the issue of patenting is not about 
protection inventors, not even about protecting investments in research, but 
about being able to build alliances among major corporations which will then 
hold in their 'walled commons' the "vast majority" of relevant patents. 

According to his estimates, there are 30 relevant companies (ie with large 
patent portfolios). Of these 30, already half, if not more, have entered into 
"broad cross-licensing pacts."  What we can see here is the institutional 
formation of 'Information Feudalism'. Felix 

Microsoft--license to deal
By Ina Fried

November 8, 2004, 4:00 AM PST

After stepping up its own patent push, Microsoft is now trying to get its 
hands on other companies' intellectual property.

Doing so will give the company more freedom to develop software in new areas 
and help the company as it seeks to indemnify its customers against any 
claims of patent infringement.

"If we are able to strike cross-licensing deals with the top 30 technology 
companies, that alone would provide us access to a vast majority of the 
patents in areas we care about," David Kaefer, Microsoft's director of 
intellectual property licensing, told CNET News.com.

Microsoft has roughly 100 licensing deals in the works, with about 15 to 20 
being broad cross-licensing pacts with other large companies, Kaefer said, 
adding that it can take from one to two years to reach an accord.

"We're making good progress on some," Kaefer said. "Others are moving more 

It has been 11 months since Microsoft said it would step up its intellectual 
property efforts. The company has two formal licensing programs--one for its 
FAT file format and the other for its ClearType font rendering 
technology--and it could add more soon.

The company has started to increase the number of sales coming in, but Kaefer 
said the amount of money Microsoft makes by licensing its patents and other 
intellectual property is still far less than the revenue from any of its 
traditional business units.

Because Microsoft paid out about $1.4 billion in the last fiscal year to 
license other companies' technology, turning a profit is not a realistic 
goal, he said. "However, there is an opportunity to narrow the gap."
Digital agenda

Join the clubs
Microsoft also is rapidly trying to boost its presence among the elite in the 
patent filing world. The software giant, which holds less than 4,000 patents, 
plans to file 3,000 applications for patents this year alone.

As Microsoft tries to identify companies to talk with on technology swaps, it 
is trying to think broadly--even striking deals with perceived rivals, such 
as its agreement with PalmOne. "The thing about IP licensing is you can build 
alliances with companies people might otherwise see as strange bedfellows," 
Kaefer said.

In many cases, striking a deal is the easy part, but implementing the 
cooperative elements can be a challenge. One need only look at the slow pace 
of work with Sun Microsystems to see how challenging it can be to implement 
such accords.

Give and take
Microsoft also is finding things tricky as it tries to work with standards 
bodies and open-source communities, something that is clearly a delicate 
process. The recent challenges over patent issues related to the Sender ID 
antispam standard illustrate how conflicts can arise even when various 
parties have good intentions, Kaefer said.

One place the software titan is trying to avoid is the courtroom. Following 
the lead of its intellectual property lawyer, former IBM attorney Marshall 
Phelps, Microsoft is seeking to beef up its licensing without having to file 
a bunch of suits to do so. Kaefer noted that Phelps built IBM's intellectual 
property business without filing a single lawsuit (although he inherited one 
when he took the job).

That said, Microsoft is pursuing negotiations with companies it feels are 
using its intellectual property. "It's not possible for us to just look the 
other way," he said.


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