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Study: Users pay for Microsoft patent woes

'Patent tax' of $21.50 each

Dollar

Each copy of Windows cost users an additional $21.50 "patent tax" to cover Microsoft litigation bills, the Software Freedom Law Center claims.

The SFLC, which provides legal representation and services to promote free and open source software, said customers are the ones splitting the bill for Microsoft's ceaseless patent-related lawsuits and settlements.

The organization's directors include industry notables such as Eben Moglen and Lawrence Lessig.

Their math to reach this conclusion is rather straightforward: SFLC estimates Microsoft has publicly paid more than $4bn over the last four years to plaintiffs such as Sun, Novell, InterTrust, Alcatel-Lucent, and z4 Technologies who claim Windows and Office products infringe on their patents. Additionally, using a quote from Microsoft general counsel Brad Smith, the organization estimates Microsoft paid about $300m in legal fees over that time.

Using a figure of 200 million new Windows installations every three years, they reach the conclusion:

4.3 / 0.2 = 21.5

According to SFLC researcher Matt Norwood each Windows licensee forking-over an extra Jackson and Washington is probably a low-ball figure. The litigation amounts consist only of figures made public and Microsoft is likely to inflate the Windows instillation numbers. A higher cost amongst a smaller population would increase the financial burden for each customer. The organization also believes North American and European customers who pay more for Windows share a larger amount of the load.

It's not altogether surprising that SFLC concludes by recommending the Linux operating system.

The organization's simplistic approach to calculating such a large corporation's legal expenses affecting product pricing is bound to draw some criticism. ArsTechnica notes that the OEM price of Windows XP did not rise during the period of study, and the cost of Vista with equivalent functionality has not increased. And of course Microsoft's prices are a reflection of demand and how high a price people are willing to pay, more than fee compensation.

Norwood concedes the $21.50 headline figure probably isn't a literal price increase from having to handle law disputes. However, he said it's important to recognize legal costs from patent disputes are being passed from developer unto the user.

And there certainly isn't a shortage of them in the tech industry. ®

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