[plug] Er, mod this up?

[Leon Brooks]

On Saturday 22 February 2003 12:31 am, garry wrote:
> This _should_ do the trick.....

> http://www.theregister.co.uk/content/53/29419.html

In summary:

1. Microsoft signed a shonky licence deal with TimeLine over improvements
   to MS SQL Server and incorporating TimeLine patents. This deal did
   *not* include other people developing stuff based on SQL server, who
   are now exposed to a triple-damages penalty (i.e., they have to pay
   TimeLine a royalty for their patented code, then three times that in
   damages, not counting any direct fines).

2. During the court hearing, Microsoft quite blatantly tried to sink
   TimeLine.

3. Even when they knew that they and their customers faced a high risk
   of enormous penalties for the above malicious stupidity, they did not
   tell the US SEC about it (report it in their filings) which is a
   *major* send-people-to-jail *and* pay-big-bux naughty, may even put
   MS at risk of being delisted if anything else comes up.

<quote bits=juicy>
    The trial court, ironically, found Microsoft's witnesses more credible
    than Timeline's on this issue; specifically the potential impact of
    the patents on users of SQL Server. Consequently, the Superior Court
    found that if the proposal, which the License Agreement was intended
    to memorialize, was as Timeline contended, then 

    "...every Microsoft customer, including ISVs, VARs, and corporate end
    users, who wished to customize SQL Server by adding code or product
    to meet the specific needs of users would have been required to
    purchase a license from Timeline to do so. Given the basic design and
    intended purpose and use of SQL Server ... the potential economic
    benefit to Timeline would have been staggering. ...(That economic
    benefit would be) from the future sale of licenses to essentially all
    of Microsoft's SQL Server customers."

    [...]

    Rather than returning to the negotiating table, however, Microsoft
    chose to attack Timeline. Microsoft filed suit asking the court to
    allow it to ignore the language in its patent license with Timeline;
    specifically the limitation the parties had negotiated on
    sublicensing. Three and one-half years later, the resulting Final
    Judgment affirms the validity of the original agreement.

    During this three and one-half year period, Microsoft bought
    Timeline's largest competitor and aggressively developed many
    applications based upon data mart technologies. It also acquired
    Timeline's then largest international distributor. These
    activities give Microsoft a family of products and an enhanced
    distribution channel to directly compete with Timeline products
    and those of many of its other SQL Server development partners, a
    capacity it did not have when it started this long, drawn-out
    legal battle. 

    Most troubling was a false press release issued in July 1999.
    Microsoft's press release, distributed to the international
    financial and trade press, stated in part: 

    "The (Timeline patent) license ensures that all users of Microsoft
    SQL Server 7, Office 2000 and other Microsoft products that
    utilize this type of technology are unencumbered by Timeline's
    patents." 

    It would be hard for Microsoft to claim it did not know or should
    have known its statement was false. The Court of Appeals held: 

    "Try as we might, it is 'impossible' to reconcile the wording of
    ...(the agreement) with Microsoft's proposed construction."
    (emphasis added) 

    "We know there were no less than 14 'privileged' communications
    involving legal counsel in conjunction with the issuance of the
    press release. Consequently, we seriously doubt anything about
    the wording or its intended effect was accidental," said Charles
    Osenbaugh, Timeline's President and CEO. 

    "Why Microsoft would mislead its own customers, arguably inducing
    them to act in a manner potentially to their great detriment, was
    initially very difficult for us to understand," Osenbaugh
    continued. "We assumed Microsoft simply felt that someone would
    successfully challenge the Timeline patents or that Timeline
    would capitulate before Microsoft's statement came back to haunt
    it. And Microsoft openly supported a number of third parties who
    unsuccessfully challenged the validity of the Timeline patents. 

    "But, in hindsight and even though Timeline won the litigation,
    we must admit Microsoft's approach apparently worked for it. The
    monies spent on legal fees were inconsequential to them. Between
    the litigation and the false press release, Microsoft effectively
    froze Timeline out of leveraging its patent-protected niche in
    the SQL Server market for over 3 1/2 years. This time period was
    long enough for Microsoft to launch its now openly stated
    strategy to become dominant in the ERP and Analytics software
    market historically serviced by its own customers."
</quote>