Microsoft claims Linux is infringing on 235 patents

Microsoft claims that free software like Linux, which runs a big chunk of corporate America, violates 235 of its patents. It wants royalties from distributors and users. Users like you, maybe.

Free software is great, and corporate America loves it. It's often high-quality stuff that can be downloaded free off the Internet and then copied at will. It's versatile - it can be customized to perform almost any large-scale computing task - and it's blessedly crash-resistant.

A broad community of developers, from individuals to large companies like IBM, is constantly working to improve it and introduce new features. No wonder the business world has embraced it so enthusiastically: More than half the companies in the Fortune 500 are thought to be using the free operating system Linux in their data centers.

"It's a tinderbox. Patent law's going to be the terrain on which a big piece of the war's going to be fought. Waterloo is here some where." --Eben Moglen, Executive director, Software Freedom Law Center

But now there's a shadow hanging over Linux and other free software, and it's being cast by Microsoft (Charts, Fortune 500). The Redmond behemoth asserts that one reason free software is of such high quality is that it violates more than 200 of Microsoft's patents. And as a mature company facing unfavorable market trends and fearsome competitors like Google (Charts, Fortune 500), Microsoft is pulling no punches: It wants royalties. If the company gets its way, free software won't be free anymore.

The conflict pits Microsoft and its dogged CEO, Steve Ballmer, against the "free world" - people who believe software is pure knowledge. The leader of that faction is Richard Matthew Stallman, a computer visionary with the look and the intransigence of an Old Testament prophet.

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Caught in the middle are big corporate Linux users like Wal-Mart, AIG, and Goldman Sachs. Free-worlders say that if Microsoft prevails, the whole quirky ecosystem that produced Linux and other free and open-source software (FOSS) will be undermined.

Microsoft counters that it is a matter of principle. "We live in a world where we honor, and support the honoring of, intellectual property," says Ballmer in an interview. FOSS patrons are going to have to "play by the same rules as the rest of the business," he insists. "What's fair is fair."

It's a breathtaking number. (By comparison, for instance, Verizon's (Charts, Fortune 500) patent suit against Vonage (Charts), which now threatens to bankrupt the latter, was based on just seven patents, of which only three were found to be infringing.) "This is not a case of some accidental, unknowing infringement," Gutierrez asserts. "There is an overwhelming number of patents being infringed."

Furthermore, FOSS has powerful corporate patrons and allies. In 2005, six of them - IBM (Charts, Fortune 500), Sony, Philips, Novell, Red Hat (Charts) and NEC - set up the Open Invention Network to acquire a portfolio of patents that might pose problems for companies like Microsoft, which are known to pose a patent threat to Linux.

So if Microsoft ever sued Linux distributor Red Hat for patent infringement, for instance, OIN might sue Microsoft in retaliation, trying to enjoin distribution of Windows. It's a cold war, and what keeps the peace is the threat of mutually assured destruction: patent Armageddon - an unending series of suits and countersuits that would hobble the industry and its customers.