Windows ruling is biggest IP heist in EU history, claims MS

Company plays IP crown jewels card, drops WTO hints

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The European Commission's decision to force the removal of Media Player from Windows is against the interests of consumers, chills innovation and breaks applications and web sites, claimed Microsoft general counsel Brad Smith in a news conference today. But yes, he would say that (and much, much more), wouldn't he? Setting the bluster aside for the moment, it's what he had to say on how Microsoft proposes to fight the decision and its chances of success that are most important.

If the Commission's demands have to be implemented in the near future, then as we explained earlier Microsoft has a serious problem. Its ability to leverage share from servers and WMP in the current product generation is seriously impeded, and it will likely have the Commission as the monkey on the back of its business practice/development model (with Microsoft, we'd argue, these two tend to be pretty much the same thing). Which amounts to a serious challenge in Europe to what Microsoft describes as its right to innovate, and other people describe as something rather different.

In Europe, note, not in the US - there are massive implications to this, but we can leave these for another day. Microsoft, now, has to knock the wheels off the Commission's remedies, and kick the matter into legal delay land, whence it will be free to emerge many years in the future, when none of it matters any longer.

According to Smith, Microsoft has 70 days to file its appeal with the European court of first instance, and is likely to ask for a stay in the Commission's remedies at about the same time. The Commission's remedies, he claims, are a "broad compulsory licensing of our copyrights," interfere with Microsoft's rights to "create adaptations and derivatives" under European copyright law, and are the "broadest compulsory licensing of intellectual property rights since the foundation of the European Union."

They also violate Europe's international treaty obligations with reference to the World Trade Organisation and trade aspects of intellectual property rights, he claims.

Smith is is going for the full-on deployment of Microsoft's extensive claims regarding Windows trademarks and copyrights we've seen before in the US case. Under this interpretation the WMP-free version of Windows "is not Windows" (i.e. not WindowsTM). "Windows today is a state of the art operating system for state of the art PCs", and Windows lite will be an inferior version foisted on Microsoft and the world by the interfering Commission.

But we're creeping back to the bluster here - you can read that anywhere. Smith says that "you can't license out intellectual property then pull it back if the company wins on appeal." Microsoft intends to argue that both the server disclosures and the WMP changes amount to forced licensing, and that the court of first instance must therefore stay the Commission's order pending the resolution of the case.

This contention is by no means doomed - Microsoft may have trouble getting a court to accept that all of the things it claims as theft of IP by shotgun really are this, but if it can get it to consider that some of them might be, then it could disrupt the Commission order a tad.

Smith didn't have a great deal to say about the potential for the matter blowing up into a transatlantic trade battle, aside from the WTO reference, and is currently positioning Microsoft as a good European citizen. "We will respect and fully comply with European law and orders of the European court of first instance," he said (actually, they said this twice, so this is the Current Corporate Line). But as you've seen already, this niceness and good citizenry doesn't interfere with the company's ability to argue about absolutely everything, for as long as it possibly can.

Smith, anticipating the possibility of a stay of the order pending legal resolution, suggests that there could be a return to talks, where Microsoft's generous offers, the ones that were rejected last week, can return to the table. Under these three whole competing media players would have shipped with every Windows PC worldwide, immediately, while under today's order European consumers will only get one, in 2009 (his estimation of when the legal process will finish).

He says the order only applies to Europe, but doesn't say if the rest of the world is still going to get three - we suppose you could try asking. With what was presumably a straight face he put forward the US process as a good example of what ought to happen in Europe. There, there were talks which broke down, then a legal case where bad things were ordered for Microsoft, then these were overturned, talks resumed, the authorities opted for a deal rather than legal wrangles till hell froze, and now everybody's happy.

Which we suppose is one way to look at it. It's fascinating to see how things look from a Microsoft lawyer's perspective.

As regards Longhorn, Smith says "we've had our lawyers working with the product development teams", which are proceeding with innovations as usual with the benefit of "careful legal advice." Fortunately, Microsoft is certain that "the kind of innovations we have planned [for Longhorn] pass muster under European law." That is, off course, what they always say, and there's almost always a big argument about it, too. ®

Related link and stories

Commission statement
Windows ruling is biggest IP heist in EU history, claims MS
Sun welcomes EC Microsoft ruling
Microsoft faces 'one per cent' fine

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