Article

Microsoft indemnification move called strategic

Margie Semilof

Microsoft's notice that it will offer protection for intellectual property claims to all users of the company's software is a nice gesture, but something it should be doing anyway, experts said.

The software maker said this week that it is expanding its coverage from customers with volume license

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To some degree, every company has a responsibility … to not use intellectual property inappropriately.


Jonathan Eunice, president,

Illuminata Inc.

,
deals to all of its customers. Such indemnification is important to shield customers from damage claims in patent and copyright disputes.

"This is a good thing to do, but I would think the primary motivation here is marketing," said Jonathan Eunice, president and principal analyst at Illuminata Inc., a Nashua, N.H., consulting firm. "To some degree, every company has a responsibility -- including a legal responsibility -- to not use intellectual property inappropriately, just like a shop has a responsibility not to sell stolen goods."

In reality, in cases of intellectual property infringement, the company that is the clearest infringer -- and has the deepest pockets -- is the one that is sued, Eunice said. Indeed, SCO Group, which claims ownership of key pieces of Linux code, threatened lawsuits against companies over the deployments of Linux earlier this year. As a result, several vendors that sell versions of the open source software, including Hewlett-Packard Co. and Novell Inc., provided some indemnification protection.

Patents vs. copyrights

James Burger, an intellectual property attorney at Dow, Lohnes & Albertson PLLC, in Washington said, he

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was glad to see Microsoft step up to provide indemnification for its customers because "it strengthens the entire digital world."

"We need to have users confident to use their hardware and software without anyone suing them," Burger said.

Burger explained that when problems arise in these cases, it generally involves a patent, not a copyright. The difference is that copyright protects the expression of an idea, but not the idea itself. A patent gives you monopoly on the idea. "If I think of an idea first and get it patented first, even if you thought of it too, I own it," he said.

He said it's not inconceivable that a patent owner might go after a customer, but if someone does come after you, Microsoft will be your sword and shield.

Patent reviews not uncommon

Though the U.S. patent process has improved, it typically still takes years to get one approved. When they are approved, the idea must be novel. And sometimes inexperienced examiners mistakenly approve a patent for an idea that is not novel, Bulger said. In some cases, such patents are overturned in court.

And it is possible for a customer to get drawn into a legal situation if they are not correctly licensed to use a vendor's patented technology, Burger said.


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