Microsoft takes out patents on FAT

Moreover the use that Microsoft intends is also objectionable on competition grounds. Article 6a of the European Parliament's amendments makes this explicit: the use of a patented technique for the sole purpose of interoperation (conversion between data representation formats) should never be considered a infringement.

Recently we have been observing a clear tendency at Microsoft to embark on extreme and unethical uses of patents, similar to those observed at IBM earlier. IBM's former IP manager Marshall Phelps, known for the

The FAT case illustrates clearly what is also true for all other software-related patents that I have come across so far: they serve to promote further patents and not real software innovation.

The patenting activity combined with the much too long life span of patents in the software field results in patent thickets which cause trouble for new innovations.

Moreover, typical patent licensing policies such as those of Microsoft's FAT cap the license fee at a fixed amount, thereby putting smaller companies at a disadvantage and completely excluding free software.

Phelps: The free and open exchange of ideas is an important ingredient in creating and fostering an innovative environment, but it's not the only ingredient. Motivation and incentive also are critical to sustained and ongoing innovation, especially in the context of large, complex systems that software programs often must implement. History shows that nations and countries with robust IP laws to protect the creative works of authors and inventors are at an advantage. Strong IP laws promote innovation and differentiation�both of which ultimately benefit the customer. Patents are part of the U.S. Constitution, and firms such as IBM have been patenting software-related inventions for over 30 years. The fact is, the last 30 years have seen unprecedented innovation in the IT sector.

PressPass: Why is it important to protect IP?

Phelps: The spirit of innovation is something we value passionately. Microsoft firmly believes that innovation is the fundamental component of progress and growth in the IT industry. We believe it is the essential foundation for the delivery of great new products and that it fuels ongoing R&D.

Companies like Microsoft engage in applied research to develop products that advance the state of technology. In turn, that generates jobs, profits and tax revenues that boost the economy, which, as part of the process, funds additional research. Companies also contribute the results of innovation directly into the larger body of technical knowledge. If software companies are not compensated for the investments they make in R&D, the cycle of sustainable innovation is disrupted. When that happens, the overall health of the software industry is jeopardized.

Microsoft is committed to a business model that protects the IP rights in software, just like any other technology, and ensures the continued vitality of an independent software sector that generates revenue and will sustain ongoing R&D. Our commitment to innovation is reflected in our industry leading annual budget for R&D.

PressPass: Do you feel the IT industry as a whole benefits from IP licensing?

Phelps: Absolutely. A healthy, fluid intellectual property marketplace is essential for a strong IT ecosystem. The revenues generated by IP licenses make it possible for companies like Microsoft to consistently invest in R&D. The industry is continually adopting the innovations that are a direct result of R&D spending and this leads to an increase in deployment. When you have increased deployment, the opportunity for further innovation downstream becomes available -- by both the originating company and potential licensees. This downstream innovation is what generates new IP, which generates new licensing, which generates new revenue. By utilizing this revenue for additional R&D, it furthers the cycle of innovation and that, of course, is a lasting benefit to the industry.