Government // Enterprise Architecture
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7/1/2008
10:39 AM
Serdar Yegulalp
Serdar Yegulalp
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$10K For Microsoft's Club Dues

After Microsoft went public with its patent licensing specs the other day, I took a closer look at the agreements you have to sign -- and the cash you have to fork over. To license patents from any one Microso

After Microsoft went public with its patent licensing specs the other day, I took a closer look at the agreements you have to sign -- and the cash you have to fork over. To license patents from any one Microsoft product, you need to pay $10,000 up front, no questions asked, on top of per-copy-sold duties for your product.

It's about what I expected from Microsoft. Good on them that they allow you to peruse and make use of the protocols without charge if you just want to work with them privately and not develop something that's going to be released to others. But everything outside of that requires payment -- and that $10K entry dues per Microsoft product is a great way to keep all of the noncommercial open source players out of the game.

Maybe that's not the only reason the provision was created. I suspect Microsoft set this up to screen out deadbeats, in much the same way some eBay sellers refuse to deal with people who don't have at least x counts of positive feedback. They also have a few courtesy provisions -- for instance, if you have a time-limited eval version of a product, no fees are assessed for those trial copies.

If Microsoft dropped the $10K provision and enforced flat, per-copy fees -- even fees twice what they are now -- my feeling is that would bring them substantially more revenue in the long run. Even knocking the fee down to $100 or so -- far more manageable for the indie developer -- would be a huge boon. Microsoft might not see as much cash per licensee, but they'd see that many more licenses purchased overall -- and they would probably also see a better diversity of software created using those patents. It's all another object lesson in the ways software patents are deeply problematic -- both for programmers and those who hold them and are trying to enforce them.

Update: Some further clarifications were sent my way: the $10K is an upfront payment against future royalties, rather than an entry fee per se (although IMO that amounts to the same thing). Another element re: open source is Microsoft's patent pledge, which states that Microsoft won't asset their patent claims against you if the project is a wholly noncommercial open source project.

The exception is for commercial distribution, with this clause: "Software is deemed to be commercially distributed within the meaning of this promise when the distributor derives revenues in connection with the distribution, such as from subscriptions, updates, or user-based connection fees or from services that are contractually required for a customer to obtain the current version and/or updates of the software product in question." It's not entirely clear, however, if this means that a dual-licensed version of a project would only be liable for patent payments from its commercially-licensed edition, but I would hope that's the case.

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