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What Linspire Agreed To
Sunday, July 22 2007 @ 11:35 AM EDT

We can read the Linspire-Microsoft patent agreement now, or more precisely Microsoft's "Covenant to Customers", and I thought it would be worthwhile to give it a close, line-by-line reading. I'll explain it as best I can, but ask your lawyer if it matters to you in a real-world sense. For our purposes here, let's just have fun with the worst deal I've seen yet in this category.

It's worse than Novell's, actually. It's worse than Tivo, in my book. I know some say that Tivo doesn't interfere with you modifying, as long as you give up using the modified software on Tivo hardware. To me, that is a penalty not contemplated by GPLv2, because if you buy a Tivo, it's because you wanted to use the software with the Tivo hardware, but with Linspire's agreement, you have to give up pretty much all your GPL freedoms, as far as I can make out, and more. And what do you get in return for giving up everything? True Type fonts, Windows Media 10, DVD playback, patent coverage...

Here's what you can't do without losing Microsoft's promise not to sue you. You can't share the software with others, pass it on with the patent promise, modify your own copy, or even use it for an "unauthorized" purpose, whatever that means in a software context. You must pay Linspire for the software, but then the "covenant" says to use Linux, you must also pay Microsoft. That payment doesn't cover upgrades. Linspire said it was absorbing the initial fees, but I don't know about upgrades. New functionality means you lose your coverage or presumably must pay again.

It doesn't cover a lot of types of software, most especially not business applications. It covers Linspire Five-0. That's it. It doesn't cover anything running on a server. It doesn't cover clone or foundry products or "other excluded products", according to Microsoft's definitions, which I'll show you, even if you get them from Linspire, and of course it doesn't cover GPLv3 anything. Freespire isn't covered, nor are apps you get separately from CNR that you don't pay for. Microsoft can change the deal or even drop it any time they are good and ready, but Linspire can't. And of course, you are not consulted. Microsoft can interrogate you any time it thinks it necessary to make sure you really are covered. But there is no clear list. I see no arrangement for resolving disputes.

Here's what you can still do: just sit there and don't make any sudden moves. Pretend you are using Microsoft software instead of GPL'd software. Don't think. Don't modify. Don't share. Don't explore. Don't improve. Don't innovate. Don't distribute. Don't sublicense. Don't do "unauthorized" things. Don't do nuttin' or you might get sued.

What was Linspire thinking? You think I'm kidding, don't you? Let me show you.

By the way, in researching this article, I found that Linspire is a privately held company:

What is Linspire, Inc.'s stock symbol?

At this time, Linspire, Inc. is privately held and not publicly traded. Therefore, there is no stock symbol for the company....

Who owns Linspire, Inc.?

Linspire, Inc. is currently owned by the founders of the company.

Who is that? The page on the Linspire executives lists only one founder, Michael Robertson. Maybe there are others. Who knows with a privately-held company? For that matter, who knows where the Microsoft money goes with a private company. There is no public accountability. The "Inc." means it is a corporation, so it's still under certain requirements under the laws that govern that type of entity, but it's not like SCO Group, where we get to read where all the money goes. Well.

Here is the covenant, then, with some translation into plain English from legalese and some analysis by me interspersed.


Covenant to Customers

Published: July 5, 2007
Updated: July 5, 2007

Microsoft, on behalf of itself and its Subsidiaries, hereby covenants not to sue a Customer of Linspire for infringement under Microsoft’s Covered Patents on account of such Customer’s use of specific copies of a Covered Product as originally distributed by Linspire;

[So this is the part that tells you not to modify. Microsoft promises not to sue you over any covered patents of theirs if you've paid Linspire for software which is covered, a specific copy of a "covered product," but only if it is "as originally distributed by Linspire". So you can't even fix something, if what Linspire sent you isn't quite what you need. Why would a business want software they can't personalize? That is one of the principal advantages of using FOSS in business -- that you can make it do exactly what you want.]

provided, however, the foregoing covenant is limited to only those specific copies for which such Customer has purchased a Patent SKU or Patent SKU Plus.

[This is the Thou-Shalt-Pay-Microsoft part. Why end users are buying SKUs is a mystery to me. But pay you must.]

For the avoidance of doubt, a specific copy to which bug fixes and minor updates have been applied is considered the same copy and remains covered by the above covenant provided such bug fixes and minor updates do not add substantial new functionality; an upgrade (or a new version) of a specific copy is treated as two different copies.

[Heh heh. None of that "new functionality" for you! Just stick to what Linspire gave you and no one gets hurt. Bug fixes are OK. But any new functionality throws you off the reservation. If you want to get back in after an upgrade, you must pay again for patent promises. There is no free lunch.]

The above covenant is personal to any given Customer and is non-transferable.

[That means no eBay, no friends, no family, no first sale with the promise attached. Just keep it to yourself, if you know what's good for ya. Be buried with it.]

By necessity, the covenant is conditioned upon the Customer providing Microsoft, upon its request, with sufficient information to verify which copies of Client Offerings are Covered Products subject to the covenant.

[Ah! Pop quizzes as Microsoft deems it "a necessity". Are you really and truly covered? Inquiring minds want to know. And what if you and Microsoft don't agree? I see no arrangement for resolving any such disputes. You are covered if they say you are. They have vays of making you talk, you know. Go ahead. Sue them. They have lawyers to darken your skies. What? You were thinking of suing over this junk? Take it or leave it.

That's the thing about promises. Either the promise is kept or it isn't. And if it isn't, what can you do? I don't see anything in the agreement addressing that.

Well, if you can't trust *Microsoft*, I ask you, who *can* you trust?]

Microsoft reserves the right to update (including discontinue) the above covenant pursuant to the terms of the Patent Agreement between Linspire and Microsoft that was publicly announced on June 13, 2007; however, any covenant provided to specific copies of Covered Products before such update shall survive under its initial terms and conditions.

[This is the part where Microsoft gets to make a clean break or change the deal, although I see no escape clause for Linspire, but whatever was covered before Microsoft renegs runs remains covered, if it was already covered and you can prove it in any interrogation sessions. So Microsoft can update the deal or cancel it at any time, subject to the terms publicly announced on June 13, 2007, they say, whatever those terms were -- they don't bother repeating them here, I notice, nor do they provide a link -- but whatever was once covered stays that way, they vow. Unless you saved the June 13th terms, you don't really know what that is, do you, or if anything has changed? But something is covered. So long as you don't twitch, move, modify, upgrade, sublicense, or do unauthorized things. But if you assume that by buying Linspire, you are safe forever, forgeddaboud it.]

The foregoing covenant shall survive for such specific copies of Covered Products in perpetuity.

[Of course, your computer won't last forever, and neither will your software on it, not that "specific copy", so it's easy to promise forever, particularly when upgrades are not covered. What? You wanted to upgrade too?]

Definitions of capitalized terms used above may be found in the Definitions section below.


“Client Offerings” means any software products of Linspire that include the Linux operating system, including Linspire Five-0 and successor offerings. However, Client Offerings do not include (i) any portions of products that comprise or include Foundry Products, Clone Products, GPLv3 Software or Other Excluded Products, (ii) Freespire and any other software offerings that include the Linux operating system for which Linspire receives no Revenue, (iii) any products running on a server, or (iv) any Linspire CNR applications distributed separately from the Linux operating system.

[Hmm. It doesn't cover much, does it? Only paid-for Linspire Linux is covered, except not foundry, clone, GPLv3, or other excluded products. So you can still get sued for software you get from Linspire. Oh, and nothing that is "running on a server" is covered. Catch that, businessfolk? No apps you got separately via CNR, either.

Here's what "foundry product" means:

“Foundry Product” means a product which is either (a) designed by a third party (or designed for a third party other than by Linspire) without substantial input from Linspire and made, reproduced, sold, licensed, or otherwise transferred by Linspire, on essentially an exclusive basis, (i) to that third party, or (ii) to that third party’s customers, or (iii) as directed by that third party; or (b) made, reproduced, sold, licensed or otherwise transferred through or by Linspire for the primary purpose of attempting to make such product subject to the covenants under the Covered Patents of Microsoft so that a third party’s customers can receive the benefit of such covenants.

Is that odd language saying that all the thousands of third-party applications that come with a normal Linux distro are not covered? I'm not sure. It's the kind of language lawyers come up with for a particular fact pattern that they understand but you may not. But if only Linspire-designed software is included, that isn't much. What are cloned products?

“Clone Product” means a product (or major component thereof) of Linspire that has the same or substantially the same features and functionality as a then-existing product (or major component thereof) of Microsoft (“Prior Product”) and that (a) has the same or substantially the same user interface, or (b) implements all or substantially all of the Application Programming Interfaces of the Prior Product. Except for Wine, OpenXchange, StarOffice, CrossOver Office and Mono, the Parties agree that the versions of Client Offerings sold, licensed, supplied, distributed or otherwise made available by Linspire before the Effective Date (“Existing Products”) will not be deemed to be Clone Products.

Wait. I thought the whole point of a patent agreement was so you *could* use comparable functionality. Well, nope. If Microsoft has something like it, you had best not do it too, except for any exclusions listed. OK, the promise is getting smaller and smaller. What are "other excluded products"?

“Other Excluded Products” means (a) any applications (e.g. office productivity applications, word processing, spreadsheets, presentation software) to the extent they are hosted by or running on a computer acting as a server for a connected client device, (b) any software embedded in, or otherwise running on, any servers or other devices (printers, cameras, game consoles, set-top boxes, phones, handheld devices, TVs, etc.) other than personal computers, laptops or workstation computers, and (c) new features and functions in the following categories of products: (i) video game consoles (e.g., Xbox video game consoles), console games, video game applications designed to run on a computer, and on-line video gaming services (e.g., Xbox live); (ii) business applications designed, marketed and used to meet the data processing requirements of particular business functions, such as but not limited to accounting, payroll, human resources, project management, personnel performance management, sales management, financial forecasting, financial reporting, customer relationship management, and supply chain management; and (iii) unified communications.

Woah. Run that last part past me one more time, please. If I am a businessman, and I'm thinking about getting a patent promise not to sue from Microsoft, because I think like that, wouldn't that last bit kill the deal? Business applications are not covered. So accounting, payroll, HR, project management, sales management, financial forecasting and reporting, supply chain management, "unified communications" -- none of that is covered. And no games. No online apps.

Wait. Isn't that a lot of excluded stuff? Why, yes. Yes, it is. So when you read that Linspire is thinking of offering various items via CNR to Freespire users, read the small print. You are not covered, as I read the terms. And if it were me, I'd insist on an explicit list of precisely what is and isn't covered, by application name, before I signed up for this. I might need it later in my interrogation sessions.]

“Covered Product” means a specific copy of a Client Offering for which a Customer has paid for a Patent SKU or Patent SKU Plus and MLGP has received the applicable Fee; provided, however, after MLGP receives such Fee then such Client Offering will be deemed a Covered Product as of the date such Customer paid for such Patent SKU or Patent SKU Plus.

[Your coverage starts when they get the money, not when you pay it. Once they get it, however, it's retroactive to the day you paid, which means your window of coverage is over that little bit sooner. So your check needs to not bounce, and while you wait to see if it's good, they can sue you during that window of time. But your coverage runs out dating from the date you handed over the check, not the date it cleared. Hey. Microsoft gets to set the terms. It's a monopoly. What do you want? Egg in your beer?]

“Covered Patents” means any Patents that may cover the Covered Products which Microsoft or any of its Subsidiaries now or hereafter (i) owns or controls, or (ii) has the ability or right to grant a covenant not to sue without requiring payment to any third parties.

[*May* cover. You get to guess. One can't actually know if the patents are infringed or not, then, can one? It's one of life's little mysteries. And you are free to gamble and not pay Microsoft if you are feeling lucky. Well? Are you, punk? Methinks this vagueness is tied to certain language in the GPLv3. Here is how Microsoft defines Patents that are covered:
“Patents” means any and all utility patents, utility models, patent registrations, and equivalent rights (including, without limitation, originals, divisionals, provisionals, results of reexamination, continuations, continuations-in-part, extensions or reissues), and utility patent applications for the foregoing, in all countries of the world, and any other procedure or formality with respect to the aforesaid that can result in an enforceable patent right anywhere worldwide. Patents do not include design patents, design registrations, copyrights or trade dress rights.

Just because they promise not to sue you over patents, that doesn't mean they can't sue you for copyright infringement or trade dress rights. And not all types of patents are included. Design patents are not covered. So the useful parts are covered, but the ornamental are not. Here's a definition of "utility patents". I gather, then, that if Microsoft has other types of patents, like business method patents, for example, they are not included in the promise. If you come up with a perpetual motion machine, there is no promise not to sue you, then, because that wouldn't be a utility patent, so if Microsoft developed one first, it's not part of the promise not to sue, I guess.]

“Customers” means an enterprise or individual that utilizes a specific copy of a Covered Product for its intended purpose as authorized by Linspire.

[OK. And how does one perceive Linspire's intent? This is the Don't think, Don't innovate, Don't modify clause.]

Enterprises or individuals are not Customers when they (1) resell, license, supply, distribute or otherwise make available to third parties such specific copy or additional copies of the Covered Product; or (2) resell, license, supply, or distribute the output of SDKs or developer kits they utilize as a Customer.

[See what I mean about giving up your GPL freedoms? Microsoft makes no promises not to sue you if you do the things many folks normally do with GPL software. In this Brave New Brand-X-Linux World Linspire got you into, Microsoft has no actual competition, merely partners who behave themselves and non-partners, who can get sued.]

For avoidance of doubt, an enterprise or individual cannot qualify both as a Customer and Distributor for use of the same copy of a Covered Product.

[We got it. Trust me, we get the picture. Microsoft doesn't want anyone distributing Linux.]

“Patent SKU” means patent coverage from Microsoft purchased for a copy of a Client Offering under the terms set forth in the Covenant to Customers.

“Patent SKU Plus” means patent coverage from Microsoft purchased for a copy of a Client Offering under the terms set forth in the Covenant to Customers, plus the rights to distribute certain other Microsoft technology under the terms set forth in the Agreement.

[To get the promise, then, you must purchase a "Patent SKU or Patent SKU Plus" whatever that is. Let's see. It says that you get the Plus version if you wish to distribute, but not Linux software. No, no, no. That seems to be out, period. You get the Plus version if you wish to distribute certain *Microsoft* stuff. Lordy, lord. Talk about upside down and backwards at the same time! You can distribute Microsoft tech, if you pay for the right, but there is no way you can take GPL software and distribute it. You have paid not only money for this Microsoft promise not to sue. You've paid with your GPL rights. Poof. FOSS is dead. The GPL-based development model is over for you. And what do Linspire customers get in return? Fonts. A media player. Voice over IM. What a deal. Who wouldn't give up freedom for some fonts and some MP3s?]

“Subsidiary” means any entity (a) more than fifty percent (50%) of whose outstanding shares or securities representing the right to vote for the election of directors or other managing authority are, now or hereafter, owned or controlled, directly or indirectly, by a party, but such entity shall be considered a Subsidiary only when such ownership or control exists; or (b) which does not have outstanding shares or securities, as may be the case in a partnership, joint venture or unincorporated association, but more than fifty percent (50%) of whose ownership interest representing the right to make the decisions for such entity is, now or hereafter, owned or controlled, directly or indirectly, by a party, but such entity shall be considered a Subsidiary only when such ownership or control exists.

[This matters because it's telling you precisely who can't sue you for patent infringement, namely Microsoft or its subsidiaries as precisely defined here. All others can. Now how safe do you feel?]

“Term” means the period beginning on the Effective Date and, unless extended pursuant to Section 9.1, ending on the earlier of (i) three (3) years from the Effective Date, or (ii) the date of termination of this Agreement.

[Yes, it only lasts three years. If Microsoft doesn't back out of the agreement first, then the promise is for three years. You'll recall Novell got five. So the deals are getting less juicy. That's a happy trend. If they keep this up, pretty soon Microsoft won't be able to find any more eager sellouts. Folks, just how dumb do you have to be to want to sign up for something like this?]


P.S. By the way, for those of you aware of the Canonical-Linspire deal earlier and who may wish to avoid all things Linspire, here is a diagram that will help you understand how CNR works.

For myself, I think it's time to think really seriously about who should be allowed to use the name Linux, before the trademark loses all its traditional meaning.

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