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SFLC's tax calculation is patently wrong
April 17, 2007

The Software Freedom Law Center has calculated that Windows users are forced to pay a patent tax of $20 per operating system to account for patent infrigment claims against the software giant.

It is an interesting calculation, and one that will get the legal firm plenty of headlines, but it is also based on a significant error.

The SFLC states:

"In the last three years, Microsoft has publicly paid out more than four billion dollars to plaintiffs claiming that Microsoft's Windows and Office products infringed their patents. From April 2004 through March 2007, Microsoft paid settlements and court awards of $1.25 billion to Sun Microsystems, $536 million to Novell, $440 million to InterTrust, $60 million to Burst.com, $6 million to private inventor Carlos Amado, $115 million to z4 Technologies, $74 million to Korean company P&IB, and most recently, $1.52 billion to Alcatel-Lucent over patents allegedly infringed by Microsoft's software."

The $536m Microsoft paid Novell - and a significant proportion of the money Microsoft paid Sun - covered antitrust, rather than patent, infringement claims, however.

The announcement of the Novell deal specifically noted that Novell had "agreed to a general release of claims that it has as of the date of the agreement, with certain exclusions that include patent claims and claims associated with Novell's WordPerfect business."

As Microsoft added in its announcement: "both parties retain the right to pursue past or future patent claims."

Of course, Microsoft later agreed to pay Novell $108m as part of their non-specific patent covenant, with Novell paying Microsoft at least $40m over five years.

Meanwhile, the Sun agreement saw "payments of $700 million to Sun by Microsoft to resolve pending antitrust issues and $900 million to resolve patent issues".

It is interesting to see how the figures break down compared to the number of operating system installations, but the SFLC’s argument is undermined by the organization’s readiness to include the $536m Microsoft agreed to pay Novell.


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Posted by Matthew Aslett on April 17, 2007 04:26 PM

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