Neelie Kroes: Woman of the Year

It’s been a month or so since the agreement between the EU and Microsoft was announced, so there’s been a bit of time to consider the implications of the agreement. In brief, Microsoft has agreed to make interoperability information available to open source developers, for a fee of 10,000 euros; furthermore, Microsoft has agreed to license this information, including its patents, at a royalty rate of .4% to commercial companies. Commercial companies have a choice of which of these arrangements they use, depending upon whether they believe a patent license is necessary.

In my view, this agreement is one of, if not the most, significant open source developments of the year.

First and foremost, it frees open source developers from the shadow of litigation, which was always present in the past. Others (including Groklaw) have stated that they feel the 10,000 euros is too high a fee for open source developes. I agree. However, in the context of a commercial software industry, Kroes could hardly demand compulsory free licensing. Not developing under the potential threat of litigation, however, is a huge step forward. Furthermore, I believe that community open source developers will find large, open source-friendly companies (e.g., IBM) willing to fund these fees to further their own interests. Commercial open source companies, of course, can well afford the licensing fees.

This compatibility information, by the way, is what has been behind Microsoft’s rather bizarre claim that they are now open source-friendly, because they are “building a bridge” to the open source community. Building a bridge has, to them, always meant  implying that their protocols were crown jewels, worth, well, enormous sums from open source developers. Kroes has set a price on the crown jewels at a fee more like paste.

Second, the agreement will smoke out Microsoft’s ongoing patent circus, where they incant the term “235 patents” and ask people to pay up for them if they use open source — all without ever actually identifying the patents in question (I personally would like to play poker this way, too: my hand beats yours, but I’m not going to show you the cards –now shove the pot this way, please). This is based on Microsoft’s belief that some open source products infringe on Microsoft’s patents. Companies can pay the 10,000 euro fee, and if Microsoft brings up their patents and asks for royalties, can politely refuse to pay the royalties until the patents are identified, thereby gutting Microsoft’s patent strategy.

A number of people have commented that this is great, but that it only applies in Europe, so it won’t solve any problems in the US. While this may be technically true, it’s unlikely that Microsoft is not going to conform its US practices to the EU’s — anything else would be politically untenable.

Overall, everyone involved in open source should salute Neely Kroes. She was willing to persevere in what must have been the face of a siege of lobbying by Microsoft and its cohorts. What she came up with may not be perfect, but in life the perfect is all too often the enemy of the good.