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The patent tax

The Software Freedom Law Center has recently put out a press release based on a study of how much each Windows user is paying for software patents. The methodology used is quite simple: look at the known payments made by Microsoft in patent cases, then divide that sum by the number of Windows licenses shipped. The bottom line was $21.50 per license. That is a significant part of the total cost of a license, and everybody who has bought a Windows license - even those of us who just overwrite Windows with a Linux installation - is paying it.

SFLC describes this cost as a tax, and does its best to make the implications clear:

While $20 might not sound like a lot, it adds up pretty quickly. A school with only 50 Windows machines - barely enough for one class of students - is paying $1,000 of its limited budget in patent tax, rather than buying books or other useful supplies. A government agency with a mere couple hundred Windows machines is paying many thousands of taxpayer dollars in patent tax.

As the SFLC points out, the real amount of this "tax" is likely to be higher than the estimate. The number of Windows licenses is probably inflated by Microsoft, and there's certain to be patent settlements that the public knows nothing about.

Software patents thus cost quite a bit of money; trying to quantify this "tax" and spread the word is a useful thing to do. Perhaps, if more people understand what the patent system is costing them, there will be more pressure to make real reforms. The SFLC release wanders into slightly more dangerous territory, though, when it says:

On the other hand, free operating systems based on Linux have never been found guilty of patent infringement, making Linux a patent-tax-free alternative to Windows. Not only do these free software systems have no patent tax, they have no taxes whatsoever, because - like all open source software - they are available to the public at zero cost.

There is a significant difference between saying "Linux has never been found guilty of patent infringement" and "Linux does not infringe upon any patents." The SFLC's choice of the former wording was carefully done. The nature of the software patent beast is such that almost any significant piece of software must infringe upon a number of patents. The fact that nobody has, yet, successfully prosecuted a patent case against Linux is not a cause for great comfort.

Language like the above thus risks playing into the hands of those who would claim that the free software world is populated by those who would "steal" the "intellectual property" of others. Might they not say that the absence of software patent payments by Linux users is not an example of freedom, but, instead, an act of tax evasion? If Microsoft were to decide to bring a software patent suit against a developer or user of Linux, it could use this release to great advantage: what better example could there be of how the free software community's refusal to pay patent royalties puts companies like Microsoft at an unfair competitive disadvantage?

Putting the focus on Linux in this discussion seems like the wrong direction to take. While free software developers make diligent attempts to avoid known patents, the same must certainly be true of companies like Microsoft. Our lack of patent infringement judgments is more a matter of luck, lack of sufficiently deep pockets, and, if some sources are to be believed, some users quietly paying patent royalties to avoid ending up in court. We need to get the software patent problem fixed, rather than brag about our avoidance - so far - of public settlements.

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The patent tax

Posted Apr 19, 2007 3:33 UTC (Thu) by dthurston (guest, #4603) [Link]

SFLC seems to be assuming that Microsoft's only source of revenue is Windows licenses, which is certainly false.

The patent tax

Posted Apr 19, 2007 7:03 UTC (Thu) by HenrikH (subscriber, #31152) [Link]

Yes, but on the other hand they summed up the patent suits against Windows and not against Microsoft other sources of income such as MSSQL etc, if I read the press release correctly.

The patent tax

Posted Apr 26, 2007 11:39 UTC (Thu) by markhb (guest, #1003) [Link]

OTOH, while they talk about possible "undisclosed" settlements against Microsoft, they make no mention of any settlements in the other direction (i.e., Microsoft suing someone else and winning). Since they don't even suggest the idea, even if only to dismiss it, this "calculation" seems like useless BS to me.

The patent tax

Posted Apr 19, 2007 3:55 UTC (Thu) by landley (subscriber, #6789) [Link]

This is part of the reason Eric and I suggested getting a bundle of
licenses for the crap we can't ship right now in the 64-bit transition

Red Hat had mp3 playback support, and yanked it out of RH8. Decss to
play dvds has been out for years. This isn't primarily a technical
issue; we're _good_ at those.

Luckily, Microsoft's antitrust verdicts prevent it from suing Linux
directly, and proxies like SCO have blown up in its face. But it'll
still rattle its sabers at every opportunity and if it gets desperate
(the 64-bit transition is well underway, according to all of AMD's server, mobile, and
desktop processors are now 64-bit) who knows what it'll do?

And the _real_ threat is Apple, which is happy to wrap stuff in DRM, sue
bloggers, sue sorensen for licensing its video codec patents to flash for
use on Linux. We can't just wait for Microsoft's incompetence to
overwhelm it or we'll all be using Macintoshes.

Ubuntu's been working on this for a while now:

The linspire/cannonical announcement was strategic, you know.

The FSF guys are, as always, trying to figure out whether they want
to be right or effective, and what their definition of success is...

Although it would have been nice if Richard Stallman had bothered to READ
Eric's and my paper before declaring a jihad against it, but I suppose
that's asking a bit much from the man...


The patent tax

Posted Apr 19, 2007 7:49 UTC (Thu) by alexbk (guest, #37839) [Link]

Although it would have been nice if Richard Stallman had bothered to READ Eric's and my paper before declaring a jihad against it, but I suppose that's asking a bit much from the man...
Care to provide some links?

The patent tax

Posted Apr 19, 2007 13:11 UTC (Thu) by tzafrir (subscriber, #11501) [Link]

Microsoft has paid to license MP3 playing.

Sadly for them, it wasn't good enough, and they had to pay some 1,500,000,000 Dollars for a different MP3 patent license.

The patent tax

Posted Apr 20, 2007 13:01 UTC (Fri) by man_ls (guest, #15091) [Link]

And the _real_ threat is Apple,
I thought the real threat of the patent tax were software patents.

The patent tax

Posted Apr 23, 2007 13:03 UTC (Mon) by emk (subscriber, #1128) [Link]

After listening to Eric's talk at Penguicon (were you on the panel, too?), I finally understand where he's coming from on the proprietary codec issue. If we are facing a better-than-usual shot at winning the desktop, but don't stand a chance without MP3, DVD, Flash video, etc., codecs, then I understand Eric's desire for a Linux codec package.

Such a codec package would represent a loss of freedom, but the short-term losses might plausibly be balanced by long-term gains (i.e., having enough market share to kill hardware-level DRM dead).

I don't know if actually agree with this argument, but at least I can respect the thinking behind it. But then again, I'm always a bit leery of disagreeing with Stallman on these issues, because in the last 15 years, he's been right more often than I have. :-(


Posted Apr 19, 2007 9:39 UTC (Thu) by rwmj (subscriber, #5474) [Link]

Surely Microsoft pay actual patent licenses too (eg. for playing DVDs and MP3s). It is rumoured that the license for playing DVDs is quite significant.



Posted Apr 20, 2007 0:01 UTC (Fri) by giraffedata (subscriber, #1954) [Link]

pay actual patent licenses too

I assume you are distinguishing between purchase of a license and payment of damages for using a patent without a license. The article talks about payments and settlements of lawsuits. I know most of those settlements include purchase of a license for future use of the patent, so that's counted.

What's apparently not not in there, and I checked the press release to confirm, is any settlements in disputes that never reached lawsuit filing and any licenses that were purchased upfront with no dispute. Add that to all the lawsuit settlements that aren't made public, and it seems to me that the $20 is much too small.

The patent tax

Posted Apr 20, 2007 0:20 UTC (Fri) by giraffedata (subscriber, #1954) [Link]

Calling this a "tax" is grandstanding that really impeaches whatever integrity this study might have had.

The press release actually has a whole section meant to defend the use of the word, and it totally fails. It says it's a tax because patent rights are created by the government. The ways the government creates property rights and shifts wealth are endless, and that's not what defines a tax.

"subsidy" might be a valid term, assuming the patent holders are getting more for their inventions than it cost them to invent them.

The patent lawyer subsidy

Posted Apr 21, 2007 10:05 UTC (Sat) by pkolloch (subscriber, #21709) [Link]

Well, subsidy might fit. I just happen to believe that not inventors are subsidized, but patent offices and patent lawyers.

The patent tax

Posted Apr 23, 2007 9:25 UTC (Mon) by ekj (guest, #1524) [Link]

The word is poorly choosen, yes.

Patents are a fiction that exist through government-support though, and their existence does impose significant cost and (perhaps more importantly) risk to all businesses and individuals who produce, sell or use software.

The risk is greater the more innovative you are. It is also greater for smaller companies. A small innovative 10-person software-company would quite likely go bankrupt as the result of only *one* patent-case. MS and IBM are unlikely to.

Patents do not, infact, promote progress in software. Thus they're a net liability and should simply be removed.

But I agree -- they're not a tax. They're just a unnessecary risk invented by government. The risk brings nothing. There are literally nobody who reads sw-patents in the hope of learning something new. (indeed, if you develop software you're well-adviced to stay as far away from reading patents as you possibly can, lest it be deemed willfull infringement)

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