Microsoft takes on the free world
Microsoft claims that free software like Linux, which runs a big chunk of corporate America, violates 235 of its patents. It wants royalties from distributors and users. Users like you, maybe. Fortune's Roger Parloff reports.
Context & Ripple Effects
The claim arrives as an escalation of a line Microsoft has run before: back in November 2005 it was arguing that Linux is anti-commercial, and this week's Fortune report by Roger Parloff turns that rhetoric into a number — 235 patents that Microsoft says free software infringes. The story traveled fast on pickup, with CNET News.com, Ask The VC, and Robert Scoble all carrying versions within a day, which signals how much attention a quantified patent count against Linux draws compared with earlier general attacks.
What makes it consequential is who the target list includes: not just distributors, but corporate America itself — Fortune's reporting stresses that Linux runs a large share of enterprise IT, so Microsoft is explicitly contemplating royalty demands reaching end users, a step beyond prior vendor-to-vendor disputes.
First-order effects
- Microsoft puts Linux distributors on notice that shipping free software now carries an asserted royalty liability of 235 claimed infringements, converting a marketing rivalry into a licensing negotiation.
- Enterprises running Linux learn that Microsoft considers them — the users, not just the vendors — potential royalty payers, adding a legal-overhang question to every existing deployment.
Second-order effects
- Distributors face pressure to strike cross-license or royalty agreements with Microsoft to give customers cover, which would split the Linux ecosystem between protected and unprotected channels.
- Large technology holders with their own patent portfolios — IBM, Oracle, Google, Apple are the companies Fortune frames as having stakes in the platform — have incentive to respond with defensive assertions or pooled protection for Linux, raising the odds of mutual-assured-patent posturing rather than quiet acquiescence.
Third-order effects
- If the pattern holds, patent assertion becomes a standard revenue lever against free software, pushing open-source projects and their corporate backers toward defensive patent pools and indemnification clauses as routine parts of enterprise contracts.
- The deeper structural question Fortune raises — whether a vendor without a devoted user community can win through legal leverage what it has not won in the market — would shape how openly developed software is funded and defended for years.
The trend: Commercial software vendors are shifting from competing with open source on price and features to monetizing it through patent royalties.