Microsoft Embraces Open Source - Fordham Intellectual Property, Media & Entertainment Law Journal
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Microsoft Embraces Open Source

Microsoft Embraces Open Source

If you have spent any time around computer software enthusiasts, you have probably heard about Linux, the open-source operating system. Linux has been around since the mid-90s and while not wildly popular among individual consumers, it has only grown in popularity for those in the know. Today, Linux runs almost everything from popular Android devices, cars and smart TVs, to supercomputers, stock exchanges and the Large Hadron Collider.1 Its popularity has made it the face of open-source software and a safe-haven for small software developers, but Microsoft, the computer software giant, has regarded open-source and Linux as a poison in the water.

Open-source software does not necessarily mean free.2 Instead, it refers to software with source code that anyone can see and tinker with.3 In contrast, large companies often keep their software code closed-source, so they are the only ones who can legally alter it.4 Microsoft’s business operation model has traditionally been to keep all valuable code locked behind patents. Starting in the late 1990s, the first “Halloween memo” published by Microsoft declared open-source software a major threat.5 Then Microsoft CEO, Steve Ballmer, even called Linux “a cancer that attaches itself in an intellectual property sense to everything it touches,” as a reaction to the fact that if any open-source software is used, the rest of the software must also be made open-source.6

Microsoft’s animosity persisted until midway through the 2000s, when the company softened its attacks on the open-source community and even launched its own open-source projects.7 However, as this tug-of-war seemed to be ending, Microsoft’s new philosophy emerged: either enter into a patent-licensing agreement with Microsoft or else Microsoft will begin suing.

In the years since, Microsoft has made a steady revenue stream by holding tight to its patents. In 2014, it was reported that the company had profited $3.4 billion just from their Android patents.8 Today, Microsoft has 1,200 licensing agreements with over 700 partners, which continue to provide patent revenue to the company.9 But two decades since the “Halloween memo,”10 Microsoft appears to have changed its mind. In two moves that sent shockwaves through the industry in early October, Microsoft joined the LOT Network11 and the Open Innovation Network (OIN).12 The Lot Network’s goal is to “eliminate the patent troll threat” by making sure that if big companies sell their patents to patent assertion entities—businesses that acquire patents and make revenue by enforcing the patents against alleged infringers—the members of the network will receive a free license to said patent.13 While this does not change much in Microsoft’s mode of operation because the license only manifests on transfer,14 Microsoft has also joined OIN’s ongoing mission of protecting Linux and all-Linux-related software.15 In Microsoft’s arguably most surprising move, the company has added 60,000 patents to OIN’s existing bank of 1,300 global patents.16 Considering the company’s bumpy history with open-source software, Microsoft’s change of heart has sparked questions about their decision to do this now.

A big part of the reason behind this shift is cloud computing and Microsoft’s cloud service, Azure.17 Cloud computing is supposed to help society deal with its growing amounts of data by storing, managing and analyzing it.18 It is also how artificial intelligence trains and learns before it is ready to tackle real-life problems on our devices.19 It is not surprising that most technology companies view cloud computing as the next big thing. However, that has posed a problem for Microsoft Azure. In 2017, 40% of Azure was running on Linux and, by 2018, that percentage had increased.20 In order to remain competitive and offer its clients what they want, Microsoft had to embrace Linux within its cloud service. By becoming of a member of the OIN, Microsoft is not just joining in forces with the open-source community. They are encouraging developers to create applications on Azure. What that will mean exactly for Microsoft’s licensing agreements and over 36,000 pending patent applications21 remains to be seen.


  1. What is Linux?, Linux, https://www.linux.com/what-is-linux (last visited Nov. 11, 2018). [https://perma.cc/P89J-UF5L]. See also Charlie White, Happy 20th Birthday, Linux: 10 Cool Devices that Embrace You, Mashable (Sept. 17, 2011), https://mashable.com/2011/09/17/happy-20th-birthday-linux/#LLR3kaPtUZqh. [https://perma.cc/8T3T-668P]

  2. What is open source?, Opensource.com, https://opensource.com/resources/what-open-source (last visited Nov. 11, 2018). [https://perma.cc/5PYR-MKXJ]

  3. Id.

  4. Id.

  5. Stephen Shankland, Microsoft’s long history of open-source acrimony, Cnet (Feb. 21, 2008, 1:06 PM) https://www.cnet.com/g00/news/microsofts-long-history-of-open-source-acrimony/?i10c.encReferrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8%3d&i10c.ua=1&i10c.dv=17. [https://perma.cc/PDC9-EGBD]

  6. Id.

  7. Id.

  8. Steven J. Vaughan-Nichols, Microsoft open-sources its patent portfolio, ZDNet (Oct. 10, 2018, 6:00 AM), https://www.zdnet.com/article/microsoft-open-sources-its-entire-patent-portfolio. [https://perma.cc/2UQN-6XJ5]

  9. Intellectual Property Licensing, Microsoft, https://www.microsoft.com/en-US/legal/intellectualproperty/iplicensing/default.aspx (last visited Nov. 11, 2018). [https://perma.cc/2LMC-W4AG]

  10. Shankland, supra note 5.

  11. Jan Wolfe, Microsoft joins ‘patent troll’-fighting alliance LOT Network, Reuters, Oct. 5, 2018, https://www.reuters.com/article/ip-patent-microsoft/microsoft-joins-patent-troll-fighting-alliance-lot-network-idUSL2N1WL0CC. [https://perma.cc/FD6M-LKQV]

  12. Vaughan-Nichols, supra note 8.

  13. How LOT Works, LotNetwork, https://lotnet.com/wp-content/uploads/2018/08/Introduction-to-LOT-2.0_8_21_18.pdf (last visited Nov.11, 2018). [https://perma.cc/BW93-ZCZ6]

  14. Id.

  15. About OIN, Open Invention Network, https://www.openinventionnetwork.com/about-us (last visited Nov. 11, 2018). [https://perma.cc/UQ6V-GZUM]

  16. Vaughan-Nichols, supra note 14.

  17. What is Azure – Microsoft Cloud Services, Microsoft Azure, https://azure.microsoft.com/en-us/overview/what-is-azure/ (last visited Nov. 11, 2018). [https://perma.cc/P7MT-LZV3]

  18. Joy Tan, Cloud Computing is Crucial to the Future of Our Societies – Here’s Why, Forbes (Feb. 25, 2018, 9:00 PM), https://www.forbes.com/sites/joytan/2018/02/25/cloud-computing-is-the-foundation-of-tomorrows-intelligent-world/#1d1ae7074073. [https://perma.cc/DEJ5-7ZS6]

  19. Id.

  20. Steven J. Vaughan-Nichols, Linux now dominates Azure, ZDNet (Sept. 27, 2018, 11:36AM), https://www.zdnet.com/article/linux-now-dominates-azure. [https://perma.cc/5C6D-S2DQ]

  21. Intellectual Property Licensing, supra note 9.

Elitsa Angelova

Elitsa Angelova is a second-year, part-time law student at Fordham law school and a staff member of the Intellectual Property, Media & Entertainment Law Journal. During the day, Elitsa works as a business immigration paralegal at a national law firm.