Study: Users pay for Microsoft patent woes
'Patent tax' of $21.50 each
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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 $21.50 headline figure probably isn't a literal price increase from having to handle law disputes. However, he said it's important to recognize legal costs from patent disputes are being passed from developer unto the user.
And there certainly isn't a shortage of them in the tech industry. ®
COMMENTS
RE: lawsuits Not royalties... and other things
Simon,
'this calculation is based on "patent-related lawsuits and settlements." not royalty payments, which are a valid part of the OS if included. If M$ want to pass the charge on to customers, then they can, and nobody is arguing with that.'
I think people are arguing with that. If the charges they've added related purely to legal fees and fines ('punitive damages'), then I'd agree with you. However I don't think the charges do - for instance the report cites M$ settled with InterTrust which was announced as a single one-time payment of $440m granting a perpertual license for InterTrust's patents in Microsoft's technology.
Unless the lawsuits is settled publicly in court there's often no breakdown of how much of an out-of-court settlement is punitive and how much is for royalties past and future and so there's simply no way of splitting the money between necessary royalty payments and unnecessary punitive and legal costs.
Speaking of crap -- you don't know Shinola either, eh?
Quote: "As for subsidising MS (and please, stop using the "M$" thing and start communicating like a grown up) no one is putting a gun to your head and making you but [sic] it; you don't have a right to anything they produce and as far as I see they can charge any amount of money they want to it. You don't have to buy it, after all."
When I purchased my Fujitsu Lifebook P2120, not only was I *forced* to purchase MicroFlaccid (is that better than M$?) Windows XP Pro with it, I was told that my hardware warranty was void if I removed it! M$ tells OEMs that if they give end users a choice of OS, they'll revoke *all* the OEM's Winders licenses. How is that not "forcing" people to purchase Winders?
Yes, the laptop runs Linux (that's my job) and yes, I'm glad I had the foresight to ghost the hard drive before I installed it, because I did have a warranty issue with the LCD, and I had to restore the original partitions on the drive before I sent it in for repair.
Oh yes they are
"As for subsidising MS (and please, stop using the "M$" thing and start communicating like a grown up) no one is putting a gun to your head and making you but it; you don't have a right to anything they produce and as far as I see they can charge any amount of money they want to it. You don't have to buy it, after all." -- Anonymous Coward
Right. Please tell me where I can buy a notebook computer with a 230V UK power pack and no Operating System installed. They may not be physically holding a gun to my head, but the net effect is much the same -- I have to pay for Microsoft Windows, including bogus patent royalties, whether or not I am going to use it.
As for the M$ thing, how about a deal: We'll stop using a dollar sign for the S in "Microsoft" when they stop using an S for the second C in "licence". (That is actually a misnomer; a licence traditionally gives someone permission to do something that ordinarily would not be allowed. Microsoft's "licence" agreement appears to restrict the rights given to users by the Law of the Land, which is at best misleading [since users could be made to believe they are forbidden to do things which the Law of the Land actually allows] and at worst downright illegal.)
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