Microsoft and IP laws

Oh boy did I open a can of worms! That's OK. There are a lot of myths and legends regarding Microsoft, so let's start seperating that out from the reality and recorded history.

A few people in the comments section claim that Microsoft was granted state sanctioned monopoly status via various intellectual property laws, even after I pointed out that Microsoft relied on keeping their processes and invention internals secret without government assistance. Let me apply some evidence: A quick search of the US Patent and Trademark Office online database shows that from the formation of Microsoft until September 1994 less than fifty patents are assigned to Microsoft, and none are critical to the development and marketing of a modern operating system. In fact one (# 4,588,074) is for a shipping box that also holds manuals open! Yet it was during this time that Microsoft gained domination in the desktop personal computer market.

That leaves copyright as the only form of IP law that protected Microsoft. Copyright is not much protection or even monopoly privilege. Copyright only protects the specific expression of an idea, moreover, copyright is little more than an acknowledgement that the author created the work and reserves specific rights while offering the right to view (or listen to) that work. In other words it is very much a standardized method of specifying a contractual obligation between the producer and consumer - hardly an illiberal concept.

With regards to copyright, it is common practice within the software industry to gain proper access to source code, study that code, and write down the concepts in a human language, then pass the description on to programmers in another room to re-implement that code. This is an entirely legal process (whether it is moral or ethical is a different discussion).

Microsoft gained their market position by offering software for inexpensive machines at a reasonable price. Apple refused to sell software for Intel based systems as did every other major computer company that could have possibly competed with Microsoft. Several corporations did offer Unix-based OS's for the Intel x86 platform but at prices exceeding the price of the hardware and did not market into the consumer and small business market.

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I hesitantly point out that

I hesitantly point out that there is another huge benefit MS has reaped from government -- virtually total immunity from product liability laws. The impact of the courts and the various decisions on ownership vs licensing and the various product liability issues have basically all gone MS's way, and quite against the consumer.
What other industry sells such incredibly shoddy products with a government supplied umbrella insulating them from damage claims?
Shirley Knott

Copyright IS a government

Copyright IS a government privilege. Ties all services to a monopoly due to "authorship". "Regulates" away what services can or cannot be exchanged (see e.g. liability above). Introduces negative externalities in enforcement costs. Doesn't acknowledge the *marginal* value of *marginal* development, but only the privileged value of government registration.

IIRC, Apple has wanted to

IIRC, Apple has wanted to sell their OS for the x86 platform for quite some time now. However, Gates has threatened to stop producing MS Office for the Mac should Apple ever decide to try and horn in on his x86 OS market.

And that brings us to the biggest reason for Microsoft dominance - the network effect of their Office product. Word and Excel have become the lingua franca of modern business. I'm not convinced that these products got to their dominant position because they were the best product available.

I?m not convinced that these

I?m not convinced that these products got to their dominant position because they were the best product available.

"Best" is in the eye of the beholder. The product one person thinks is "best" may not become dominant because many other people think another product is "best".

Re: "best" - I'll admit that

Re: "best" - I'll admit that last sentence in my last post is sloppy.

But the fact remains, the only reason many people "choose" MS Word and Excel over other products is because other people send them things in MS Word and Excel formats. If you own the OS market, it's that much easier to own the word processor and spreadsheet markets, which in turn helps to further solidify your hold on the OS market.

Shirley - I'm not sure that

Shirley - I'm not sure that a more libertarian legal system would enforce any stricter product quality laws. MS has always been very straightforward in saying they cannot vouch for the quality of product. Those of us that actually need to care about product quality specify other software.

I do have a problem with Microsoft's "you have to accept the license to look at the license" practice, but that did not start until well after they had achieved dominance in the marketspace.

Matt - Apple wanted to get

Matt - Apple wanted to get into that game way too late. They could have back in the 80's - but by the mid-90's? Forget it.

Looking at patents before

Looking at patents before 1994 seems to obscure an important part of the argument,. Namely: even if Microsoft attained dominant status because they were the best, now that they have that status they can leverage it to maintain their position in ways other than serving the customer.

If Microsoft focuses on maintaining their position *now* through IP laws and litigation, that hurts the customers, even if they got a monopoly by being the best.

Its not just about how they got there, but what they do with it. If people will use Office and Word now because they are the standard, whether or not they are good, then Microsoft is better off spending money on rent-seeking than in developing a better product.

Metaphorically, this is much like the fact that a central government may form because it is necessary to combat an external threat. Once it has that geographic monopoly on coercion and has fought off the threat, it focuses on maintaining control.

Hence your whole argument that Microsoft may have become dominant through serving the customer is irrelvant to the question of whether their current monopoly hurts the world.

Patri - there are several

Patri - there are several arguments here. This is just the first. Then there are the network effects and natural monopolies to deal with. Unfortunately, I only have time to answer one at a time.

The current complaints about MS and monopoly (from governments) all rest on MS becoming a dominant force in their market space. The DoJ investigations and anti-trust suits came about in the mid-90's. The practices complained about in the EU case trace back to the mid 80's even though one of the specific technologies is from the late nineties. I cannot and will not deny that MS is now seeking monopoly rents through political means. But that is not what the lawsuits are about.This is why I posted the bit about feeling dirty.

Also note, Microsoft is starting to lose brainshare. Next comes marketshare. The market is working perfectly, we don't need no stinkin' badges to fix it. Besides, the judgements are furthering Microsoft's dominance not correcting it.

The most patriotic thing

The most patriotic thing that could happen in American government would be to unshackle our economy from the Microsoft monoculture. The proposed DOJ break-up of Microsoft from a few years ago might have accomplished this, we'll never know for sure. Was the slap on the wrist settlement we ended up with the result of the new Bush administration, or was it the result of the original judge in the case shooting his mouth off to the press before rendering a verdict (and thus being deposed from the case). We may never know that either.

But what we do know is that the rest of the world looks at the Wintel offerings as though they are a stew made from a putrid heron. The EU, the Chinese, even the Israelis have no incentive to tie themselves to two American monopolies, and that would be true even if the products offered were not both overpriced and substandard.

Nature is a persistent thing. Place an obstacle in the way of a stream and eventually the stream will go over or go around. Even the biggest dam will be undermined as small seapages turn into torrents if not constantly kept in check by the hand of man.

Economic streams work this way too. The Microsoft and Intel monopolies are artificially constructed and without constant maintenance will not stand. The DOJ, and all the kings horses for that matter, may help those monopolies persist here in the United States, but nothing can maintain that status on a worldwide basis, furthermore, attempts to do so will only continue to erode American technology leadership.

Our government should at least let that dam collapse naturally, if not help it along.

Oops! I shoulda read this

Oops! I shoulda read this post before I commented in the thread above.

Thanks for the enlightening post on copyright law. You make a pretty good case that it's less of a monopoly than I thought--although, as Fare says, it still provides some monopoly privileges.