LinuxGram

After 10 years of trench warfare and a body count of close to $1.8 billion in fines, the European Commission is getting ready to pass Microsoft the roach of concord and close the book on the case.

The EC said Wednesday that a final settlement of the browser issue, Europe’s updated version of the old Netscape case that saw Microsoft branded a monopoly in the first place, could be all of a month or two away.

All it will take is a group think and none of Microsoft’s browser rivals finding too big a hole in the terms of pact during the next month while the EC conducts what it calls a “formal market test” of the proposed remedy.

Browser makers, hardware OEMs, trade associations and consumer watchdogs will have until November 7 to comment.

The EC, which realizes it’s going to hear grousing, says it’s prepared to listen to substantive complaints but figures “Microsoft’s commitments would indeed address our competition concerns.”

The European Committee for Interoperable Systems, the trade group that includes Sun, Oracle, IBM and Opera, which initiated the browser complaint to the EC, issued a statement to Reuters saying, “the settlement does not appear to deal with the inadequacies of Microsoft’s standards compliance, unfair pricing practices or other concerns related to patent abuse or standards manipulation.”

The remark is off point since the EC’s statement of objections never touched on those things. Of course it would serve the purposes of Microsoft’s enemies if the EC was hung permanently around its neck like an albatross.

Anyway, after a month of video conferences with the EC, Microsoft has agreed to make further concessions in the “ballot screen” proposal it came up with in July, basically adjusting it to the objections raised in August when the EC conducted what it calls an “informal market test.”

The July proposal followed Microsoft’s threat to remove Internet Explorer from any Windows operating system it shipped in Europe.

OEMs will continue to be able to pre-load any darn browser they please and the wrath of Microsoft will not descend upon them. They can chuck Internet Explorer completely if they like.

Existing and future Internet Explorer users in Europe are going to start to see the so-called ballot screen turn up on their PCs – whether they like it or not – explaining what a browser is and offering them a choice of 11 other browsers besides IE.

There’ll be a “tell me more” button for each of the browsers so the companies can make their pitch and users will be able to turn off IE and tuck it in a separate cache on their hard disk if the sight of it so offends them. They don’t have to but they can.

They’ll be able to install as many browsers as they like and turn them on and off at will, using any of them for their default.

Of course it may be idle to remark that even people who have trouble mastering the light switch can do this already but they don’t have a cute ballot screen where the icons representing the top 12 browsers by market share in Europe will be displayed in two rows: a row of the top five, including IE, laid out in alphabetical order so IE doesn’t get any preference and a second row of the next seven by market share again in alphabetical order.

Since the settlement is good for five years, the identity of these browsers could change, which is one of the ostensible reasons why Microsoft has made the browser screen a simple web page rather than a Windows application like some of its critics wanted. It says it’s easier to update. And Microsoft has agreed the EC can have lingering oversight of its behavior regarding the ballot screen.

It will be interesting to see if market shares change.

In a press conference called for four in the morning Microsoft time Wednesday, the company’s general counsel Brad Smith remarked that distribution of the ballot screen via Windows Update will be limited to IE users. Microsoft’s browser rivals don’t want their own users to have any choices.

And to prevent still another antitrust investigation from raising its ugly head, Microsoft also kicked it another concession that it wasn’t ever asked to make and that Smith characterized as “the single biggest legal commitment in the history of the software industry to promote interoperability.”

The company has agreed to reveal more about its Windows, Window Server, Office, Exchange and SharePoint workings to third-party developers, including open source developers who were bound to bitch about it to the EC anyway.

It says it’ll provide technical documentation so third-party products interoperate better with the Microsoft widgetry. It’s also committing to support certain standards like the OOXML rival ODF (OpenDocument Format) and to “fully” document how these standards are supported.

For a “nominal sum,” Smith said, third parties will be able to get the specifications and legally binding warranties.

And just to make sure that Symantec and McAfee don’t stir up more trouble with the EC for Microsoft, it said it would disclose certain programming interfaces in its security products.

The interoperability pledge is contingent on the EC accepting the browser settlement, which is now supposed to be more usable and evenhanded than the July draft proposal.

Smith used some run-on question about Yahoo at that four-in-the-morning press conference to reflect that every time the subject of competition and IT came up during the last 10 year everybody turned and looked at Microsoft. It’s time somebody else had turn, he said, and offered a few suggestions: Google and search; IBM and the mainframe; and Oracle and Sun.

His quip about IBM proved prophetic because a few hours later it was discovered that the Justice Department has opened a preliminary investigation of Big Blue’s behavior in the mainframe market contrary to its undertakings to the DOJ years ago.

This time, people being subpoenaed say, the probe’s not going to take 13 years like it did the last time, suggesting it could be a highly entertaining winter watching IBM squirm. The European Commission is also being lobbied to bring a statement of objections against the giant supra-national.

Oh, yeah, about Yahoo. It’s still unclear, Smith said, whether the EC has jurisdiction or whether the German national authorities do the review.

Well, I never.

Microsoft has started a 501.c6 non-profit open source foundation, a bipolar strategy greeted by suspicion, hoots, catcalls, defamation and virtual mooning by the open source set.

It’s called the CodePlex Foundation, which is not to be confused with Codeplex.com, Microsoft’s version of Sourceforge hosting a reported 10,000 projects. Microsoft is kicking in a million dollars to meet the organization’s first-year expenses. After that other folk, who haven’t been recruited yet, are supposed to contribute to its maintenance.

Imagine a kinda halfway house where proprietary software companies and the open source left can exchange source code, but not patent portfolios, hammer out interoperability and in general try to work out their differences in development methodologies and intellectual property.

It’s supposed to increase commercial participation in open source projects either through IP contributions to the foundation under a standard open source license – which one, it says, depends on the project – or through time volunteered to open source projects.

It’s assumed the projects selected will ultimately be good for Microsoft somehow but rights are supposed to extend in perpetuity to downstream developers and users. Copyrights will be assigned to the Foundation.

The idea is to be broader based than the foundations that represent particular projects, platforms or applications, such as Firefox and the Mozilla Foundation, or Gnome and the Gnome Foundation.

The plans, including a charter that articulates the kinds of projects the Foundation works with, and what relationship the Foundation will have with those projects, are currently supposed to be rough-hewn or non-existent so that other people can refine them in accordance with your typical open source process.

Microsoft said, “We don’t have it all figured out yet. We know that commercial software developers are under-represented on open source projects. We know that commercial software companies face very specific challenges in determining how to engage with open source communities. We know that there are misunderstandings on both sides. Our aim is to advance the IT industry for both commercial software companies and open source communities by helping to meet these challenges.”

It caught hell for not having broader participation, proving that it was in a no-win situation. If it did, it would have caught hell for that too.

To address the many eyebrows raised by such a thing, Microsoft explained that it has “an evolving engagement with open source” – (well, that’s one way of putting it) – “as demonstrated by its sponsorship of the Apache Software Foundation, contributions to the PHP Community, participation in Apache projects including the Hadoop project and the Qpid project, and participation in various community events such as OSCON, EclipseCon, PyCon and the Moodle Conference.” It skipped over the other faucets of its relationship with open source.

It also claimed to see a “convergence of maturing technology and evolving business models,” an inflection point “where more commercial companies are willing to participate in open source projects” and “a great opportunity to drive change.”

The CodePlex Foundation will be run on an interim basis by Sam Ramji, Microsoft’s departing open source interlocutor, who’s bolting Microsoft for some kind of cloud bivouac on September 25. Microsoft has yet to name a replacement, but Ramji will stay with the Foundation for next few months.

He and the Microsoft-dominated CodePlex board are supposed to replace themselves in the next 100 days with representatives from commercial software companies and open source communities.

Current board members include Bill Staples, general manager of Microsoft’s web platform and tools team; Stephanie Boesch, a Microsoft .NET Framework program manager; Miguel de Icaza, Novell VP, developer platform; Britt Johnston, a Microsoft product unit manager for data and modeling; and Shaun Walker, DotNetNuke co-founder.

Microsoft says “there are a number of ways for individuals and companies to participate in the Foundation – via sponsorship, or by becoming a member of the board of directors or board of advisors.” So it’s not taking members per se.

According to the CodePlex charter, the board sets the Foundation’s “vision and policy.”

Its advisory board, described as the “conscience of the Foundation,” includes VA founder and SugerCRM interim CEO Larry Augustin; MySQL co-inventor Monty Widenius; MindTouch CEO Aaron Fulkerson; Microsoft CodePlex.com chief Sara Ford; HP FOSSology lead architect Robert Gobbeille; Microsoft SubText chief Phil Haack; Microsoft Developer Division principal program manager Scott Hanselman; Microsoft IronRuby creator John Lam; Microsoft NUnit and XUnit.NET co-author Jim Newkirk; Microsoft director of technology, licensing and customer advocacy Monty O’Kelley and Interix Unix-on-NT founder and Microsoft acquisition Stephen Walli, now a consultant.

All the Microsoft people have open source or Unix credentials.

The Foundation will be run by a small staff beginning with deputy director Mark Stone, formerly with O’Reilly and VA Linux.

See Codeplex.org.

The notoriously plaintiff-leaning US District Court for the Eastern District of Texas issued a permanent injunction Tuesday prohibiting Microsoft from selling any Microsoft Word products in the United States that “have the capability of opening .XML, .DOCX or DOCM files (XML files) containing custom XML.”

Microsoft, which means to appeal, must comply with the injunction within 60 days.

The decision impacts the current Word 2007 as well as the Professional Edition of its predecessor Word 2003 and the upcoming Office 2010 (and affects, in turn, SharePoint server and SQL Server database) and implicates the feature, often demanded by the federal government, for creating custom tags to search files for specific information.

Custom tags, as you might suspect cover stuff other than the “name, rank and serial number” covered by standard XML tags.

PC World says custom XML lets people “create forms or templates such that words in certain fields are tagged and then can be managed in a database.” The devil of course is in the details.

According to Bloomberg Merck and Bayer use i4i’s widgetry to ensure people get the most up-to-date information on their medicine labels. But how widely the feature is used is debatable. From i4i’s web site, it looks like a pharma thing.

i4i chairman Loudon Owen, one of the financiers of the lawsuit, said the estimates submitted at trial are under seal, as is most of the suit, and he couldn’t say whether the number represented “2% or 10%” of Word’s installed base but it’s the growth rate he’s most interested in anyway. He can’t talk about that either since it’s “strategic” but it’s on the rise.

Anyway, Microsoft has also been ordered to pay Toronto-based i4i Inc $290 million after failing to persuade the judge to overturn the decision.

The judge Tuesday upheld the verdict a jury came down with in May awarding i4i $200 million after it found Microsoft willfully infringed an i4i patent covering a document system that relies on XML custom formatting.

The judge braced the decision by ruling that Microsoft should pay i4i an additional $40 million for its willful infringement plus slightly more than $37 million in pre-judgment interest, including an additional $21,102 a day until a final judgment is reached in the case and $144,060 a day until the date of final judgment for post-verdict damages.

The $40 million was more than the $25 million i4i suggested for willfulness.

Software covered by the 1998 patent removed the need for individual, manually embedded command codes to control text formatting in electronic documents.

Microsoft claims it did not infringe and that the i4i patent is invalid.

However, in 2001 when asked by the federal government for the ability to create custom tags in Word, the company brought i4i into the conversation and said i4i could supply the function. Microsoft then started its own development and i4i lawyers entered Microsoft e-mail into evidence that said it would “obsolete” i4i.

i4i lawyer Doug Cawley expects Microsoft to rush to the appeals court in New Orleans seeking an expedited stay of the injunction. One can imagine them arguing the state of the economy and the fact that Office 2010 is soon to make an appearance and nudge that economy along.

If Microsoft can’t get a stay, it will have to strip out the feature, disable it or come up with an acceptable workaround – or, heck, even license the darn thing – because in 60 days it can’t test, demonstrate or market any future Word product that opens an XML containing custom XML.

The injunction does not apply to any Word product that opens an XML file as plain text or when it opens an XML file “applies a custom transform that removes all custom XML elements.” The injunction does, however, allow Microsoft to continue to support existing custom XML users of products licensed or sold before the injunction takes effect.

An appeal is likely to take a year, Cawley said. He said he is confident i4i will survive the appeal.

The patent at issue, No 5,787,449, was invented by i4i founder Michel Vulpe but is owned by i4i LP, a licensing entity affiliated with i4i Inc. McLean Watson Capital, chaired by Owen, and Northwater Intellectual Property Fund are investors in i4i LP.

i4i has spent around $10 million on the litigation so far, according to Cawley. It could never have done it without investors. God only knows what Microsoft spent.

McKool Smith represented i4i.