Legal terrorism Microsoft style

Many people I think misunderstand Microsoft’s supreme court appeal of the i4i patent case. Some suggest that by focusing on limiting the ability to actually win patent cases that Microsoft is somehow limiting it’s own ability to use software patents against others. Nothing can be further from the truth, and indeed I think this case and their newly launched lawsuit against Motorola represents a milestone in their transformation from a proprietary software vendor into a litigation house.

What I think people fail to appreciate is that Microsoft does not seek the elimination of software patents but only to further limit the possibility of suffering spectacular losses at the end of such cases. This is because they understand well their most effective strategy is not in actually winning large judgments in patent cases against others, but rather simply in being able to financially exhaust others that they choose to sue. Hence, they wish to have an environment that is for them “safer to sue”.

Being a failed software company that can neither produce nor enter markets they are unable to illegally force people to buy their defective products, they clearly see future growth by taxing everyone else’s success. This is made possible by the threat of launching multi-year patent lawsuits that will cost millions of dollars to defend against even if they are entirely groundless, but for which they are far better positioned to financially sustain than their chosen target. They therefor can use the mere threat of patent lawsuits to effectively extort payments like a modern day Al Capone.

A perfect example for understanding this litigation strategy is Microsoft’s patent on inserting “@todo” comments in source code. This is clearly not the kind of patent anyone acquires to actually win a patent lawsuit against someone. It is also too ludicrous to seriously cross-license. However, what such a patent does buy them is immediate legal standing to literally choose to sue any competitor they may choose at any time regardless of the actual outcome. This kind of patent may even be most ideal for suing to eliminate free and open source competitors simply by raising the cost of being in business defending oneself to unsustainable levels, regardless of the eventual outcome.

Their fear then is not in limiting their ability to win a patent lawsuit against others if they choose to sue a hundred companies, but rather the possibility that perhaps one or more of a hundred entities that may separately choose to sue them might win. Sustaining the cost of launching and defending against multiple patent lawsuits over many years is already considered a part of their cost of business. Sustaining spectacular losses is not.?

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