One reader has wondered whether the recent attacks on Microsoft stem from the fact that software intellectual property rights are not predominantly protected by patent law, but rely in part on copyright law. The reader said this in context of a suggestion that Netscape invented the web browser, and that Microsoft should have had to get a license from Netscape to produce a web browser. I infer that he means to imply that Microsoft’s creation of a competing web browser is wrong, but cannot be punished under current law, thereby leading people to want to punish Microsoft under the color of other statutes.
None of that is true.
1. Software is protectable by both patent law and copyright. The processes employed by a program may be granted patent protection if they are novel and non-obvious in the opinion of the patent examiner. Numerous patents have been granted for software.
2. Netscape did not invent the web browser. The essential components of the web (the Internet, TCP/IP, MIME, URL, HTML and the Mosaic browser) predate Netscape. Netscape devised several improvements to browsers, but its most significant contribution was not the invention of the browser but rather that it made browsers commercially successful, predominantly by distributing a very good browser for free.
3. Browsers are built according to a series of publicly-available standards (such as HTML). Anyone is free to build a browser according to these standards, and indeed many companies have. This situation is a little confused by the fact that from the very beginnings Netscape’s browsers included a number of very useful features that deviated sharply from the standards. This, plus the widespread distribution of those browsers, led to an impression that the definition of the HTML standard was whatever Netscape’s browser did. Netscape has also asked standards bodies to endorse its deviations and extensions as part of the revised HTML standard, which they have largely done. In short, Netscape does not claim proprietary rights to the features of the browser, but in fact encourages competitors to accept its inventions as freely given or licensed standards.
4. Microsoft built a browser based on the current, proposed and de facto HTML standards. Microsoft is not accused of having done wrong by building such a browser, nor for competing with Netscape in the browser market. Rather, it is charged with having competed successfully.
4a. Netscape pretty much gave its browser away for free for several years. This was called “seeding the market” or “priming the pump” and was considered a good thing. Microsoft gave its browser away for free, and now includes it as part of its operating systems at no extra charge. This is called “unfair competition.”
4c. Netscape added a number of useful (and many not-so-useful [like the BLINK tag! — Editor]) extensions to the HTML notation. This is called “innovation” and “leadership.” Microsoft has duplicated nearly all of these features, and gone on to add several important innovations of its own (such as Dynamic HTML) which are not yet available in Netscape’s products. This is called “creating incompatibilities” and “splitting the standard.”
4c. Netscape has been able to use its early lead in browsers to sell more browsers and other software and services. This is considered good. Microsoft has been able to use its early lead in other software and services to distribute more browsers. This is called “unfair competition” and “not a level playing field.”
5. Netscape has, in the past, stated that the only substantial difference between their browser and an operating system is that the latter would also include device drivers (a software component that deals with the peculiarities of differing hardware.) Microsoft has stated that a browser is part of its operating system. In other words, browsers and operating systems are naturally integral according to both companies.
6. Microsoft has written some enormously popular software over the years, particularly the Windows 95 operating system, which is chosen by the majority of computer manufacturers to ship with their computers. One of the reasons the operating system is so popular is that it includes a large number of the features most needed by computer users. The latest version includes the Microsoft Internet Explorer browser. It is technically possible for a computer manufacturer to disable or remove that part of the operating system. Microsoft required computer manufactures, as a condition of reselling the operating system, to leave it intact, integral, and fully functional. (This is called “force.”) Netscape and the Justice Department charge that Microsoft should not have the right to determine the conditions of sale of Microsoft’s products. (This is called “a victory for choice.”)
7. Netscape has a very large share, about 60%, of the browser market. Microsoft has about 30%. If one considers the overall market for software, Microsoft has about 4% market share. Microsoft’s total revenues ($8.7B) are lower than 171 other US companies, including IBM ($75.9B) and Apple ($9.9B). (Last full year figures, see Heritage) Referring to Microsoft, this is called a plot for “total global domination.”
8. In the recent court ruling, a judge decided that Microsoft did not violate the terms of the consent decree forced on Microsoft a few years ago. However, he did indicate that Microsoft had violated the spirit of the government’s intent and hopes, and therefore issued an injunction prohibiting Microsoft from requiring that its operating systems be sold as integral products. (I don’t know what this is called.)
9. The federal judge suggests that Microsoft may have violated the Sherman Anti-Trust Act by engaging in practices that might lead to a monopoly or dominance of some market. (The Sherman Act prohibits companies from acting in a coordinated fashion through common ownership or common membership of boards of directors.) At the same time, according to newspaper reports, executives of Netscape and several partner companies such as Sun and IBM have held regular meetings to plot anti-Microsoft strategy. Many of these companies are coordinated through common equity ownership and board membership of the venture capital firm Kliener, Perkins, Caufield and Byers. This is not called anything, because it is rarely mentioned.
10. In conclusion, the only aspect mentioned here by which Microsoft is sharply different from competing companies is success. Microsoft is more efficient, integrated, productive and therefore is to be punished. I don’t know what else to call it but “a victory for Anti-Greed.”
