Microsoft acquisition of Netscape/AOL patents

As reported in the news this week, Microsoft acquired some 800 patents from AOL for a billion dollars. A few people have asked what this means for Mozilla. At present, I don’t believe that the acquisition poses an immediate danger to Mozilla.

There are many possible motivations for the acquisition including reducing exposure, preventing others from obtaining the patents, increasing your portfolio size and quality, using them for cross-licensing, or even patent license programs. We’ll never know for sure, but viewing this acquisition in the broader context of the patent battle playing out across the tech sector, it makes sense for strategic reasons.

Certainly Google, Apple, and Microsoft are key competitors in this battle, and Google recently increased its portfolio size dramatically with the acquisition of 17,000 Motorola patents. Other players hold thousands of patents as well, topped out by IBM with 6,000+ new US patents in 2011 alone. Obtaining a huge chunk of patents and licenses in one move, saving time along the way, makes sense for broader reasons, and in this context it is hard to imagine it’s driven by anything related to Mozilla. Frankly, there are easier ways to influence the market without near the attention or the cost.

In this particular case, it would seem that the exposure is even lower because portions of the Mozilla code base are already licensed under some set of these patents. Early code contributions from Netscape to the Mozilla project came with patent licenses from Netscape/AOL via the Mozilla Public License. These licenses are still in play. For example, the first granted Netscape patent was for HTTPS as I recall. To the extent this is implemented in the Firefox browser or Thunderbird code bases by Netscape/AOL (and subsequently the Mozilla code base) patent grants would flow with the code under the MPL. The express MPL patent grant, which didn’t exist in other open source license at the time, finally sees its day.

Overall, while this acquisition is certainly surreal for many Mozilla folks that worked at Netscape including those who are inventors for some of the patents, I don’t view this as a threatening move in and of itself. Patent holders like Microsoft and Google are generally considered more predictable, subject to market and ecosystem pressures, and more often than not, targets of patent litigation themselves. That being said, Yahoo did sue Facebook, so conventional wisdom may no longer apply these days.

I believe the real threat is what ultimately happens with the patents. If Microsoft maintains ownership of the patents, on the margins, it is better than having them sold off piecemeal to non-practicing entities, often called IP trolls. If they end up in the wild, it’s not a good thing. We will need to watch this carefully.

It would be great to see Microsoft express its intentions in this regard or put some protections around the portfolio if it transfers the patents. This could alleviate many of the concerns raised by the transaction.

Updating the MPL

On Monday we announced a public process to update the Mozilla Public License. The goal of the update is to incorporate learnings gathered over the years so we can simplify, modernize, and make the license easier to use.  Mitchell Baker’s post this morning provides some good historical context and you can find more information about the process, rationale, and how to get involved on the MPL update web site. I’m pretty excited about the prospects although it’s going to be a big chunk of work and with any open process some respectful disagreement from time to time, but that’s ok.

More than a decade ago, I had the chance to work with Mitchell on the MPL. At the time, I had never worked on an open source license – nor had most attorneys back then. It seemed like another cool project to work on, but I certainly didn’t fully comprehend the possibility at the time. It was also my first exposure to creating legal artifacts in an open and transparent way. It was a bit of shock and I’m still in awe at how open source products are created.

In my experience practicing law, transactions come and go, and not often do you work on the same “deal” again. Especially in the Internet sector, it’s rare that that you get two shots at anything.  So this means either that the license is enduring, relevant, and worth working on again or perhaps more simply that I’m getting old. I opt for the former.


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