The price Microsoft pays for its patents

I hate to keep beating this drum, but I read Stephen O'Grady's report on Brad Smith's keynote at the Open Source Business Conference (OSBC) and thought it was worth highlighting. Stephen isn't prone to exaggeration or zealotry. So when he writes these words, it's worth considering:

Microsoft has a standing annual legal bill, we're told, of ~$100 million dollars to defend itself from patent related litigation. Unless the licensing revenue stream easily eclipses that amount, why is the current system worth defending? Why does Microsoft insist on speaking out in defense of a mechanism that appears, if anything, to negatively impact its shareholders? It seems like a flawed equation.

...When I asked specifically about the economics, his response was that it implicitly proposed a false free/expensive dichotomy that Microsoft did not and could not subscribe to.

But frankly, that seems like so much sophistry to me. While it's true that cheaper patent licenses are obviously preferrable to expensive patent licenses, that assertion fails to address entirely the argument that a less restrictive approach to its patent portfolio would offer substantial innovation and PR benefits.

Larry Rosen suggested that the only reason Microsoft could be holding onto its patent strategy is to defame open source, as it were. It's not working.

I know exceptional people within Microsoft, each of which will trot out Microsoft's party line: "We don't like the patent system any more than you do, but while we have it, we'll use it." Fine. But why not use it in constructive ways like Red Hat and others have done, rather than setting up fences between open-source developers and Microsoft? We don't want those fences. We want to work with Microsoft.

But not on restrictive, patent-encumbered terms. Those terms benefit no one...not even Microsoft.