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Microsoft's Bad Day

From TechWeb:

About one in four businesses will have to update Microsoft Office because the Redmond, Wash.-based developer lost a patent lawsuit, an asset management company said Monday.

The update stems from a 2005 verdict in a California patent claim brought by Guatemalan inventor Carlos Armando Amado. Microsoft was ordered to pay $8.9 million in damages for infringing on a patent Amado created while a graduate student at Stanford. The patent was awarded for software designed to link spreadsheet data between multiple Microsoft programs.

Of course, that $8.9 million award probably wouldn't cover the postage on Bill Gates' income tax return. But the money is especially meaningless, considering which of the company's products is involved in this spat. The patent system, with a single well-placed sucker punch, just turned Microsoft Office -- probably the most profitable piece of software in the history of the human race -- into a big, fat pain in the butt for several million of its best customers.

For now, however, Microsoft's strategy for avoiding patent trouble hasn't changed a bit: It intends to patent anything that moves, and probably a few things that do. To that end, Microsoft has already won 139 new patents since Jan. 1, putting it on track to win more than 1,500 patents this year alone.

That sounds like a formidable intellectual property arsenal, but it all depends upon your point of view: Microsoft's total equals just half the number of patents awarded to IBM last year, and that number, in turn, sounds puny compared to the 25,000-plus patents Big Blue earned in all between 1993 and 2004.

Chew on that number for a minute, and you may agree: Microsoft's tolerant attitude towards Linux (and Apache, and Samba, and you-name-it-on-SourceForge) makes more sense when you picture Big Blue vowing to turn Redmond into a seething hellpit of intellectual property litigation if Redmond's wolf pack so much as dares to muss a hair on Linus Torvalds' head.

Come to think of it, even the grim prospect of shelling out millions to settle accounts with an uppity Stanford alum has an upside for Microsoft. Paying every Stanford computer science graduate $8.9 million to pursue a career as, say, an alpaca farmer would still cost less than allowing any more of them to earn their money the old-fashioned way.

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