Acacia's Latest Target: NetFlix

It’s not just Red Hat and Novell. From TechDirt

Acacia has become one of the most hated firms by technology companies that actually do stuff. That’s because Acacia is one of the biggest (if not the biggest) firms out there in the business of buying up patents solely to sue companies. Acacia learned a while ago, though, that it was best to keep its name out of many of these suits, so it apparently tries to set up subsidiaries for many of the patents it buys (sometimes giving them silly names to make people think the companies actually do something). Now, one of those subsidiaries, named Refined Recommendation Corporation is suing Netflix over a patent it holds on optimizing interest potential. It’s a patent on the idea of making recommendations or presenting specific information based on user actions. I can recall both individuals and companies working on similar things well before this patent was applied for in 2000, but that’s a different issue altogether. Does anyone believe that Netflix (and plenty of other companies) wouldn’t be doing content recommendations for people without this particular “breakthrough”?

–jeremy

Patent Infringement Lawsuit Filed Against Red Hat & Novell III

(coverage continues)

Via 451 CAOS Theory: It looks like the Acacia lawsuit may indeed have little to do with Open Source and be just another general patent troll case. From the article:

The nation’s first Linux patent suit currently facing Red Hat and Novell isn’t about open source at all. Or so the plaintiff says.

IP Innovation last week filed the patent lawsuit against Linux in Texas, alleging that both Red Hat and Novell infringe on U.S. Patent No. 5,072,412, “User Interface with Multiple Workspaces for Sharing Display System Objects.”

Neither IP Innovation nor its parent company Acacia Research responded to request for comment at the time the patent suit first came to light. But today, in a statement sent to InternetNews.com, Acacia Chairman and CEO Paul Ryan defended the firm’s actions and argued that there is no conspiracy against open source coming from his firm.

“IP Innovation is not attempting to inject itself in the ongoing philosophical debate of whether products or services which utilize open source are subject to the same intellectual property laws/behaviors as non-open source offerings,” Ryan said in the statement. “Acacia and its subsidiaries do not philosophically differentiate any company, but rather seek to consistently and fairly monetize patent rights from those companies which incorporate patented technology.”

The company also dismissed allegations that Microsoft somehow is using Acacia as a kind of proxy to fight a patent battle against Linux. A pair of key Acacia employees recently joined the patent-holding firm from Microsoft.

Additionally, Groklaw notes that the patent involved is scheduled to expire on December 10, 2008. That could explain why Microsoft, who could easily afford to ensure that the case lasts longer than that, has not been made a target. It’s strangely reassuring to see that this probably doesn’t have anything to do with Open Source. That’s a sad indication of the state of the current situation.

–jeremy

Patent Infringement Lawsuit Filed Against Red Hat & Novell II

(A follow up to previous coverage)

As you may have guessed, this topic is being discussed heavily around the web. Mark Radcliffe points out that Open Source companies are likely becoming a more tempting target to patent trolls due to the stunning growth in the sector (keep in mind that Microsoft, Apple, et al. put up with this kind of thing all the time):

Although I and many attorneys in the open source industry have long been concerned about patent challenges to open source companies, this case appears to be the first by patent trolls against an open source licensor. The open source industry provides a tempting target because of its rapid growth. This morning, Eben Moglen at the Software Freedow Law Center Seminar on FOSS issues noted that Brad Bunnell of Microsoft joined Acacia on October 1 . According to news reports, Brad spent sixteen years at Microsoft at a number of positions which included General Manager, Intellectual Property Licensing. http://biz.yahoo.com/bw/071001/20071001005590.html?.v=1

Eben raises the intriguing question about whether these incidents are related. Given the time that it takes to prepare a patent lawsuit, Brad’s hiring probably did not effect the filing of this lawsuit. However the hiring may indicate the addition of a new business line for Acacia: suits against open source companies. Steve Ballmer’s recent comments about Red Hat’s obligation to pay Microsoft for alleged use of its patents makes this lawsuit and the timing of the move interesting.

Matt Asay points out a list of coincidences:

* One or more former Microsoft licensing execs join Acacia or one or its companies;
* Ballmer makes his most recent statement regarding Red Hat;
* Almost the same day, Red Hat (and presumbably Novell) receive notice of the alleged infringement from IP Innovation (Acacia);
* Before either company has a chance to consider the letter and respond, IP Innovation files its lawsuit in Texas;
* Novell changes all of its IP indemnification the same day (which it has named “Technology Assurance Program” as contrasted with Red Hat’s Open Source Assurance Program Novell apparently isn’t interested in assuring open source, just technology ;-);
* Novell’s new program notes a change in the Microsoft/Novell deal that covers GPLv3 code distributed by Novell for downstream recipients.

Hmm….I forget sometimes who is on which team, but it certainly seems like two sides have been conspiring on this, and I don’t mean IP Innovation and Microsoft (which is almost a given).

Stephen Walli (who was still at Microsoft when the SCO suit was launched) gives some advice that I couldn’t agree with more: Take a deep breath. Be calm. He continues:

The U.S. Supreme Court continues to involve itself in the broken patent system. The Linux Foundation and the Open Invention Network are both geared for this particular fight. I have confidence that the Groklaw community will step into the breach of reporting and investigation again. IBM, Intel, and HP have a vested interest in the outcome, and nobody plays IP games the way IBM does. Over the next few weeks, lawyers will come together behind the scenes from all the interested parties on the defending side. Hopefully egos won’t be too large, and a coherent plan of negotiation will emerge.

Some of the more interesting questions for me will be:

* Why Red Hat AND Novell?
* Why not Microsoft? (Acacia went after Apple who settled. Microsoft would seem to have deeper pockets than Red Hat or Novell. It would seem to be the more interesting business discussion.)
* If Microsoft is not involved, should they be? If Apple settled, and then this suit settles, Microsoft should know they’re next on the list. Or are they trusting IBM et al to win this one for them?

To quote one of my favourite lawyers in this space:

“If the F/OSS community wants to be in commercial space, community members will have to learn to deal calmly with IP litigation. The F/OSS production model will work where it makes sense, and it will not work where it doesn’t. It’s really just that simple. Particular claims in individual suits—even one against a flagship program such as the GNU/Linux OS—will not determine the fate of the community. Such cases present factual issues that will get resolved one way or another; they do not represent a crisis for F/OSS production as a whole. Norm entrepreneurial rhetoric that plays off such cases should be treated as entertainment. Enjoy it if you like it, take inspiration from it if you must, but don’t confuse it with the way things actually get done.”

I’m sure some former colleagues at Microsoft are excited. Mr. Smith and Mr. Ballmer most assuredly. But just as with the SCO Group litigation, there is no reason to celebrate. They shouldn’t confuse this with “the way things actually get done.” Pax.

I do find it interesting that Acacia went from Apple to Red Hat / Novell, when Microsoft surely would have been a much more compelling target from a business perspective. It becomes a simple case of follow the money from there. More information will come out of this in the coming weeks and months, so staying calm and focusing on what’s important is surely the correct course of action.

–jeremy

Patent Infringement Lawsuit Filed Against Red Hat & Novell

Earlier this month, Ballmer reiterated his stance on patents and Linux:

Microsoft chief executive Steve Ballmer has warned users of Red Hat Linux that they will have to pay Microsoft for its intellectual property.

“People who use Red Hat, at least with respect to our intellectual property, in a sense have an obligation to compensate us,” Ballmer said last week at a company event in London discussing online services in the UK.

Red Hat quickly fired back:

Red Hat is assuring its customers that they can continue to deploy its Linux operating system with confidence and without fear of legal retribution from Microsoft, despite the increasingly vocal threats emanating from the Redmond, Wash., company.

In a scathing response to Ballmer’s remarks, Red Hat’s IP team said the reality is that the community development approach of free and open-source code represents a healthy development paradigm, which, when viewed from the perspective of pending lawsuits related to intellectual property, is at least as safe as proprietary software.

“We are also aware of no patent lawsuit against Linux. Ever. Anywhere,” the team said in a blog posting.

The Linux vendor, which is based in Raleigh, N.C., also gives customers open-source intellectual property protections through its Open Source Assurance Program, which includes a promise to replace the software if there is an intellectual property issue.

“This provides customers with assurances of uninterrupted use of the technology solution. Protecting our customers is a top priority, and we take it very seriously. Our confidence in our technology and protections for customers remains strong and has not wavered,” the blog posting said.

While many people thought Ballmer was just continuing his FUD campaign, a scant couple days later an IP infringement lawsuit was actually filed:

Plaintiffs IP Innovation and Technology Licensing Corp. claim to have the rights to U.S. Patent No. 5,072,412 for a User Interface with Multiple Workspaces for Sharing Display System Objects issued Dec. 10, 1991 along with two other similar patents.

Defendants Red Hat Inc. and Novell have allegedly committed acts of infringement through products including the Red Hat Linux system, the Novell Suse Linex Enterprise Desktop and the Novell Suse Linex Enterprise Server.

“Red Hat’s and Novell’s infringement, contributory infringement and inducement to infringe has injured plaintiffs and plaintiffs are entitled to recover damages adequate to compensate them for such infringement but in no event less than a reasonable royalty,” the original complaint states.

The plaintiffs also allege that defendants received notice of the patents, therefore the infringing activities have been deliberate and willful.

Plaintiffs are seeking an injunction from the court, increased damages and other relief that the court or a jury may deem just and proper.

T. John Ward Jr. of Ward & Smith Law Firm in Longview is representing the plaintiff.

The case has been assigned to U.S. District Judge Leonard E. Davis.

You have to find it ironic that “IP Innovation” is suing based on something seemingly obvious that was patented in a 1991 by Xerox. Things get interesting from there though. It seems IP Innovation LLC is a subsidiary of Acacia. Looking at Acacia closer, you see:

In July 2007, Acacia Research Corporation announced that Jonathan Taub joined its Acacia Technologies group as Vice President. Mr. Taub joins Acacia from Microsoft, where he was Director, Strategic Alliances for the Mobile and Embedded Devices (MED) division since 2004.

and

Acacia Technologies Names Brad Brunell, Former Microsoft General Manager, Intellectual Property Licensing, to Management Team

Monday October 1, 6:01 am ET

NEWPORT BEACH, Calif.–(BUSINESS WIRE)–Acacia Research Corporation (NASDAQ:ACTG – News) announced today that its Acacia Technologies group, a leader in technology licensing, has named Brad Brunell as Senior Vice President.

Mr. Brunell joins Acacia from Microsoft, where during his 16 year career he held a number of management positions, including General Manager, Intellectual Property Licensing.

So the SCOX trial isn’t even officially over and we already have a company with large Microsoft ties filing a clear patent troll case against Linux. You think they’d at least hide the connections better this time. It should be noted that IP Innovation appears to have previously gotten some money out of Apple for this, so it’s not simply aimed at FOSS. How much of this are we going to have to go though until the system is actually fixed? Too much. Let the SCO II games begin.

–jeremy

Yahoo Acquires Zimbra For $350 million in Cash II

A quick follow up on the Zimbra acquisition. While I’m extremely happy for Yahoo! on picking up a great company, I agree with Jack that it would have been a great fit for Red Hat. Had they made the pickup 6-12 months ago they surely could have gotten a more reasonable multiple. Not only that, but it fits in very nicely with their Enterprise business model. Like the JBoss acquisition, it would have gotten their foot in the door to places previously not using RHEL. Sure, it would have put them in more direct competition with Microsoft, but JBoss shows they aren’t scared to lock horns with a behemoth. Hindsight is usually 20/20, but with the ever present Microsoft/Yahoo! merger rumors, I’d sure feel better with what is a huge opportunity being in the hands of a pure Open Source player. It just seems like it may have been a better fit. That all being said, I wish both Zimbra and Yahoo! (who doesn’t get enough credit for the Open Source things they do) the best.

–jeremy

Microsoft kills its 'Get the Facts' anti-Linux site

A little late on this one, but Microsoft has replaced its Get the Facts site with one that is ostensibly less biased.

“The goal of the site is to offer more in-depth information and customer-to-customer opinions about many of the issues IT administrators face,” a company spokeswoman said. “It turns out people wanted 3rd party validation in addition to people’s experiences making OS purchasing decisions so in addition to customer case studies, research reports that compare platforms the site will also offer guidance around best practices, web casts, etc.”

Who would have thought people wouldn’t fully trust what a company said about their own products without “3rd party validation”. I don’t find it too interesting that the site was pulled down. After all, the Get the Facts campaign had been debunked and derided to the point that is was certainly doing more harm than good. I do find it interesting, however, that the new Windows Server “Compare” site doesn’t really compare “Linux” with Windows. What is does is compare “Red Hat Enterprise Linux” with Windows. This could be taken two ways. 1) Red Hat Enterprise Linux is the only real competition in the eyes of Microsoft. 2) Microsoft is specifically targeting Red Hat as a result of it not signing a deal similar to the one Novell signed. I’ll let you be the judge.

While on the topic of the Novell deal, it looks like the Microsoft and Novell Open Interoperability Lab is now open. The Microsoft marketing team really does like to stick the word Open anywhere is can. At 2,500 square feet (or 50 x 50) there doesn’t seem to be much room for engineers, especially when you consider the room also has 80+ servers and a SAN.

–jeremy

Red Hat CEO Says He Talked Patents with Microsoft III

A quick final follow up on this post (for those of you who still have a little doubt). From eWeek:

Microsoft and Red Hat are no closer to a deal involving intellectual property cooperation, Microsoft has confirmed.

“Red Hat and Microsoft have previously had conversations about interoperability, but none of our recent conversations have included discussions about intellectual property cooperation,” Horacio Gutierrez, Microsoft’s vice president of intellectual property and licensing, told eWEEK.

This effectively puts to rest—for now—the speculation that the rival operating system vendors might actually be talking about a deal that includes some kind of intellectual property provision and/or patent covenant.

Enterprise customers, however, have a great deal of interest in seeing the two companies work together because of their investments in both sets of technologies. Bob Muglia, Microsoft’s senior vice president for server and tools, admitted that interoperability and support for major Linux distributions have come up repeatedly at the company’s Interoperability Executive Customer Council.

“Our message [from customers] was really very simple: ‘Go and talk to Red Hat because we very much would like to [work with both systems],'” he said.

Both companies say they hear their customers, but remain camped on opposite sides of the argument.

Paul Cormier, Red Hat’s executive vice president of engineering, told eWEEK that the company is still willing to work with the Redmond, Wash., software maker on the interoperability front, but that it wants to limit those talks to pure interoperability between Windows and Red Hat Linux, with the goal of solving real customer problems.

But Microsoft’s official position is that interoperability and intellectual property are not completely separate issues and have to be considered together.

Gutierrez emphasized that Microsoft remains “open to exploring a deeper collaboration with Red Hat that includes intellectual property cooperation for the benefit of our mutual customers.”

But while Microsoft is committed to building bridges with the open-source community, “collaboration on interoperability and intellectual property are important foundations for those bridges,” Gutierrez said.

That approach will not work for Red Hat; Cormier’s position has been, “I want to talk to the folks at Microsoft about our two operating systems and how we can work together to solve real customer problems without attaching any unrelated strings, such as intellectual property.”

Cormier also ruled out any possibility of Red Hat doing a deal with Microsoft like the controversial patent agreement and covenant not to sue that Microsoft penned with Novell last year, especially after viewing the limited information that is publicly available on that deal.

That’s a pretty definitive answer. Whether Microsoft will concede and work with Red Hat on interoperability without the IP strings remain to be seen. It’s clear that Microsoft customers want this, however. Kudos to Red Hat for holding their ground.

–jeremy

Red Hat CEO Says He Talked Patents with Microsoft II

A quick follow up on this post based on some questions/comments that I got via email. First, no – I absolutely don’t think Red Hat is currently in discussion with Microsoft to sign a Novell-style patent deal. Note the bolding. They may very well be in some kind of discussion, but that is not necessarily a bad thing. If Microsoft privately went to Red Hat with potential patent infringements, even silly unspecified ones, then Red Hat would be obligated to address the issue. That would require discussion. It’s very tough to be the CEO of a public company these days. “No comment” is very often the only answer you can give without the MSM twisting your words in all kinds of directions. Also note that Red Hat may be in talks about specific and valid patents or talks about something completely non-patent related. Who knows – speculation on this is mostly useless. I do remain confident though, that a Novell-esque deal will not come out of this. Don’t forget that RHT is fundamentally an Open Source company. It’s in their DNA and it’s reflected in their employees and culture. Novell had one or two key people leave after they signed the deal. Red Hat would have an exodus. The C-level execs at Red Hat know this. They get Open Source at a very fundamental level themselves, in fact. The following is the last official statement I could find from Red Hat on this topic. In the end, I have no reason to believe that sentiment has changed.

“Red Hat has only recently been able to see some of the terms of the original Microsoft/Novell deal, due to the belated and redacted SEC filings that were made. Based on what we have seen, the deal is not interesting to us. Red Hat continues to believe that open source and the innovation it represents should not be subject to an unsubstantiated tax that lacks transparency.”

–jeremy

Red Hat CEO Says He Talked Patents with Microsoft

It comes as absolutely no surprise that Microsoft approached Red Hat before any other Linux vendor (including Novell) about the patent agreement. It also comes as no surprise that a discussion took place and that no agreement was reached. Was is a bit of a surprise to me is:

The developer of Linux software, has yet to sign such a deal which could see Novell, its biggest rival, woo customers away from Red Hat and work on product development and sales with the world’s No.1 software maker.

In an interview with Reuters, Szulik declined to say whether his company is now in negotiations with Microsoft over signing such a patent agreement.

“I can’t answer the question,” he said.

When recently asked a similar question, Mark Shuttleworth gave an emphatic No:

For the record, let me state my position, and I think this is also roughly the position of Canonical and the Ubuntu Community Council though I haven’t caucused with the CC on this specifically.

We have declined to discuss any agreement with Microsoft under the threat of unspecified patent infringements.

Allegations of “infringement of unspecified patents” carry no weight whatsoever. We don’t think they have any legal merit, and they are no incentive for us to work with Microsoft on any of the wonderful things we could do together. A promise by Microsoft not to sue for infringement of unspecified patents has no value at all and is not worth paying for. It does not protect users from the real risk of a patent suit from a pure-IP-holder (Microsoft itself is regularly found to violate such patents and regularly settles such suits). People who pay protection money for that promise are likely living in a false sense of security.

Red Hat had also given a more deliberate “No” in the recent past, so the change of attitude to the “no comment” variety is a bit worrying. Here’s hoping that it’s just due to corporate disclosure rules (or something else innocuous) and not an actual change of opinion. Red Hat signing an “infringement of unspecified patents” type deal would be very bad IMHO.

–jeremy

More Microsoft Patent Dealings

So, Linspire is the latest company to sign a patent deal with Microsoft. They’ve even managed to wrangle some additional items they claim are not in the other deals:

Linspire Inc. has announced an agreement to license voice-enabled instant messaging, Windows Media 10 CODECs, and TrueType font technologies from Microsoft for its Linux distribution. Additionally, Microsoft will offer protection to Linspire customers against possible violations of Microsoft patents by Linux.

In his June 14 weekly Linspire Letter, Linspire CEO Kevin Carmony stated, “This agreement will offer several advantages to Linspire Linux users not found anywhere else, such as Windows Media 10 support, genuine Microsoft TrueType fonts, Microsoft patent coverage, improved interoperability with Microsoft Windows computers, and so on.”

Linspire has always been more willing than most to include proprietary codecs and drivers, so this is no surprise. While I may not agree with their stance, I do think they are legitimately trying to improve the desktop Linux experience, and you can’t fault them for that (or at least I don’t). I do find it odd that they’d choose to have a demonstrably inferior product in Live Search be the default, but I digress. What’s troubling once again is the inclusion of dubious patent protection. Now, Linspire (nee Lindows) and Microsoft have a tumultuous history. In that vein, this post has some interesting tidbits.

We now have three Linux distributions wrapped up in this patent debate. It was speculated that Mandriva may be next. Based on the profile of the latest two companies, it seemed a logical guess if you had to make one. It’s good to see that they have gone on the record saying that it’s not going to happen. Red Hat already rejected the idea and Mark made his feelings very clear in this post:

There’s a rumour circulating that Ubuntu is in discussions with Microsoft aimed at an agreement along the lines they have concluded recently with Linspire, Xandros, Novell etc. Unfortunately, some speculation in the media (thoroughly and elegantly debunked in the blogosphere but not before the damage was done) posited that “Ubuntu might be next”.

For the record, let me state my position, and I think this is also roughly the position of Canonical and the Ubuntu Community Council though I haven’t caucused with the CC on this specifically.

We have declined to discuss any agreement with Microsoft under the threat of unspecified patent infringements.

Allegations of “infringement of unspecified patents” carry no weight whatsoever. We don’t think they have any legal merit, and they are no incentive for us to work with Microsoft on any of the wonderful things we could do together. A promise by Microsoft not to sue for infringement of unspecified patents has no value at all and is not worth paying for. It does not protect users from the real risk of a patent suit from a pure-IP-holder (Microsoft itself is regularly found to violate such patents and regularly settles such suits). People who pay protection money for that promise are likely living in a false sense of security.

I welcome Microsoft’s stated commitment to interoperability between Linux and the Windows world – and believe Ubuntu will benefit fully from any investment made in that regard by Microsoft and its new partners, as that code will no doubt be free software and will no doubt be included in Ubuntu.

He also goes on to state why he dislikes OOXML.

With regard to open standards on document formats, I have no confidence in Microsoft’s OpenXML specification to deliver a vibrant, competitive and healthy market of multiple implementations. I don’t believe that the specifications are good enough, nor that Microsoft will hold itself to the specification when it does not suit the company to do so. There is currently one implementation of the specification, and as far as I’m aware, Microsoft hasn’t even certified that their own Office12 completely implements OpenXML, or that OpenXML completely defines Office12’s behavior. The Open Document Format (ODF) specification is a much better, much cleaner and widely implemented specification that is already a global standard. I would invite Microsoft to participate in the OASIS Open Document Format working group, and to ensure that the existing import and export filters for Office12 to Open Document Format are improved and available as a standard option. Microsoft is already, I think, a member of OASIS. This would be a far more constructive open standard approach than OpenXML, which is merely a vague codification of current practice by one vendor.

The speculation as to what Microsoft’s end goals are with this remain all over the map. I maintain they themselves may not even be sure yet. One might think they are trying to fracture the Linux market – a sort of divide and conquer. As long as Ubuntu and Red Hat remain on the other side, however, that plan isn’t going to work. The only real loser in that scenario would potentially be Novell. It’s clear that smaller, desktop oriented companies are their current sweet spot, which says a lot in my opinion. Not sure where this is all going, but it’s getting more interesting to watch by the day. Stay tuned.

–jeremy