More tech companies than just Microsoft are breathing a sigh of relief after Microsoft’s last ditch appeal to the US Supreme Court prevailed and limited liability for infringement of a domestic software patent abroad. IDG News Service’s Jeremy Kirk explains:
The U.S. Supreme Court ruled on Monday that Microsoft is not liable for using patented AT&T technology in copies of Windows running on computers outside the United States.
The 7-to-1 ruling relieves the software giant from paying what could have been enormous damages and changes how the software industry looks at patent rights.
Microsoft has previously admitted to violating an AT&T patent for converting speech to computer code, which it incorporated into tens of millions of copies of its Windows OS. It settled with AT&T in the United States, but disputed that Windows software running on machines located overseas were covered by the patent.
In delivering the court’s opinion, Justice Ruth Bader Ginsburg wrote that the “master disk” or “electronic transmission” Microsoft gives to foreign manufacturers does not violate the patent on its own since that specific copy is not used on foreign-made computers.
The Supreme Court was the last stop for Microsoft, which had lost a previous court battle. In July 2005, the U.S. Court of Appeals for the Federal Circuit upheld a lower-court ruling that Microsoft was liable to pay fines for foreign sales of patent-infringing software even if it was originally created in the United States.
But Microsoft had gained broad support in its defense efforts, including the Bush administration and tech giants Amazon.com, Intel, and Yahoo, and industry groups such as the Business Software Alliance and the American Intellectual Property Law Association.
Frankly, this seems like putting a Band-Aid on patent laws that are clearly inadequate for modern software (and other) technology, but that’s an all too common story.
Update 5/1: As for what it means to Microsoft:
Brad Smith tells the Wall Street Journal’s Jess Bravin today (click here) that the ruling will lop off about 60% of its exposure in the 45 patent cases pending against it today.
After some recent public relations faux pas, Microsoft is apparently feeling the need for a makeover on some of their initiatives. To that end:
Presumably to calm the rancor over Microsoft’s deal with Novell, Microsoft released the results of a survey of 201 “IT executives, managers or staff” which reveals that they overwhelmingly favor interoperability:
“This survey confirms for us what we’ve been hearing from customers all along. They want technology vendors to work together to promote interoperability and to stand behind the products they sell and service,” said Susan Hauser, general manager of customer advocacy at Microsoft.
The really interesting part, of course, is what the survey respondents wanted who weren’t in favor of interoperability and vendors standing behind their products, but that wasn’t vouchsafed to us.
Then despite the brave words about sales of Microsoft’s Zune personal media player sales being on target, there are rumbles that an increased advertising push is really what the Zune needs:
To tout its Zune, Microsoft launched a marketing campaign on par with that for the original Xbox. But now that the music player has spent a month on the market, the company is considering increasing its advertising to attract more attention to it.
“We are talking about upping that spend a little more,” Marketing Director Jason Reindorp told CNET News.com last week.
Microsoft has been pitching the Zune in TV spots, outdoor ads, print ads and online promos, mainly trying to get into the heads of those aged 18 to 28. But even with a decent size marketing budget, Microsoft knows it may need to buy more ads to try to get the Zune better known.
The company’s initial goal was to have its ads reach about one quarter of those in its target age range, and reach them at least three times. It has TV ads that have run in shows like Prison Break, Family Guy and Grey’s Anatomy, and has inserted print ads in magazines such as Scratch, Paste, Spin, Vibe and Rolling Stone. There are also online ads on sites like AOL, Billboard and MTV, as well as on Microsoft’s own MSN site.
“A key principle to our advertising creative is authenticity, in that the Zune brand is about celebrating great artists and the real people that enjoy it,” Kingsley said.
For now, Microsoft plans to continue targeting the same age range, but the company is open to tweaking things the campaign it finds it needs to broaden or change its demographics.
“We’ll obviously keep a close eye and, if we need to or want to, we’ll shift focus,” Reindorp said.
Here’s a modest suggestion for a shifted focus: lose the agencies that dreamed up the rabbit petters, flaming birds, scratching dog, and endless cookie and just advertise the darn product. If the Wi-Fi sharing is so cool, why not actually show some regular folks doing it and saying “Oooo!” and “Ah!” Just a thought.
Also related: I see that Amazon has knocked $20 off the original $249.99 Zune price. I wonder if Microsoft is funding that too?
Microsoft has become an ICANN-accredited domain registrar, giving it the ability to sell domains directly to its customers. Microsoft has been reselling domain names from Melbourne IT, a registrar based in Australia that also provides wholesale domains to Yahoo and other hosting providers.
Microsoft’s could use its new status to sell domain names for its Office Live small business hosting service, which is scheduled to come out of beta on Nov. 15 and provides a free domain name with each account. This would probably save Microsoft money on each domain sold, as wholesalers like Melbourne IT typically charge a small mark-up over the base fees from the central registry.
That’s as good a theory as any, although Miller points out that Google and Amazon also became registrars but have yet to sell domain names.
One of Microsoft’s few victories in the eyeball auctions was signing up Amazon’s A9 search service to use Windows Live Search. A9 is hardly one of the Web search biggies, but it was a victory. Now that victory is being called into question as Amazon Nearly Exits Search Business:
After failing to generate much interest in its A9.com search engine, Amazon confirmed Tuesday that it was removing search history and mapping features that differentiated it from competitors. In its place, a simplified front page that links to other search engines has appeared.
A9 now makes heavy use of Windows Live Search and Alexa, as well as links to some 400 other sources.
In a recent survey, A9 was ranked 83rd among all US search engines by Web analytics firm Hitwise. The site has never ranked much higher than that in its two-and-a-half year existence, according to past reports.
Well, it hasn’t quite gone yet.
Also in question is social networking site, Facebook, with whom Microsoft prominently signed a big advertising contract in August. Now that Facebook is apparently in play, it is rumored they have negotiated a possible buyout of their Microsoft contract before the ink was even dry. Holly M. Sanders at the NY Post (via Inside Microsoft):
Facebook, the hot social-networking site eyed by a number of media companies, agreed to pay a breakup fee to ad partner Microsoft if it should wind up in the arms of Yahoo! or another buyer, sources told The Post.
The agreement calls for Facebook to pay up – one source pegged the amount at less than $10 million – if it is sold to a Microsoft rival. Neither company would disclose the financial terms.
Of course, none of this is Microsoft’s fault, but they certainly are having a rocky road in trying to expand beyond their own Web venues.