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Commentary
5/28/2009
10:55 PM
Dave Methvin
Dave Methvin
Commentary
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Microsoft Changes Tune On Intellectual Property

If the book Burning the Ships by Marshall Phelps and David Kline is any indication, the Microsoft we see today is in the midst of a radical change to the way they do business. Most of the book describes the changes to Microsoft's intellectual property policies that Phelps has championed and implemented during his time at the company; he's

If the book Burning the Ships by Marshall Phelps and David Kline is any indication, the Microsoft we see today is in the midst of a radical change to the way they do business. Most of the book describes the changes to Microsoft's intellectual property policies that Phelps has championed and implemented during his time at the company; he's still at Microsoft as Corporate Vice President for IP Policy and Strategy.The title of the book refers to the gutsy move of the Spanish conquistador Hernán Cortés, who burned his ships on arrival in a Mexiccn campaign to prevent his troops from retreating. Phelps likens Microsoft's radical IP strategy changes to Cortés burning his ships, leaving no path of retreat. Instead of holding their discoveries close to the vest, Microsoft intends to open up their intellectual property portfolio in order to maximize its value to the company.

Microsoft 's new strategy involves using its intellectual property to maximum advantage, even if that means sharing it with other companies. Microsoft's deals with Novell and Red Hat showed that they are even willing to work with Linux vendors if they see a business benefit. Although the book emphasizes the positive strategy of Microsoft opening up its patent portfolio, many of the same measures (such as patent cross-licensing) have a defensive advantage as well.

Like every story, though, there are two sides. Cortés may be seen as a brave explorer in Spain, but he's not as popular in Mexico where he slaughtered unarmed natives and destroyed cities. If you're a fan of strong intellectual property laws, then Microsoft's transformation is a story of a company going from an IP victim to an IP powerhouse. If you're concerned about frivolous patents hurting innovation, Microsoft's discovery that IP can help the bottom line means they might prefer to milk the system rather than reform it.

Most of the book is a straightforward narrative of Microsoft's IP transformation from Phelp's perspective, including details of several deals with companies such as Novell and Toshiba. The final chapter changes tone and is a strongly opinionated treatise on intellectual property. Phelps tries to make the case that strong IP laws actually favor small inventors, although it's hard to see how the current system does that. The final section in the book is titled "Just say no to the 'Free Content' farce," a parting shot at Google's business model.

Burning the Ships provides insight into Microsoft's recent IP moves from an insider's perspective, but the company's newfound desire to share doesn't seem like all good news for the tech industry. The question isn't whether there should be IP rights, but whether current law strikes the right balance. I have concerns that it doesn't. It's great that Microsoft has found a way to monetize the discoveries they make, though, and I'll continue that thought next time.

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