After you sign over everything you own, we can be friends
The folks over at Redmond Channel Partner [“partner” sounds so much better than “lackey”, don’t you think?] report on a Japanese anti-trust investigation of Microsoft. The issue: intellectual property (IP).

Excellent! Where do I sign?
RCP reports:

The Fair Trade Commission, the nation’s antitrust body, and Microsoft have been wrangling since 2004 over a controversial clause in licensing agreements.

The clause prevents companies from suing Microsoft over patent and copyright infringement if they suspect their own software technology has ended up in the Windows operating system.

Microsoft, based in Redmond, Washington, has repeatedly said the clause is lawful. It dropped the clause in 2004.

The commission has said it suspects the clause has helped Microsoft unlawfully infringe patents. Hearings have been held in Tokyo to look at the commission’s and Microsoft’s positions. Smith said a decision from the commission is expected in 2008.

The clause has so far prevented companies from bringing infringement complaints against Microsoft, said Smith, Microsoft’s general counsel, who oversees policy on intellectual property and competition issues worldwide.

“Maybe they would have some new ability to raise that claim,” including possible lawsuits against Microsoft and computer manufacturers, if the commission rejects Microsoft’s view, he said.

Commission officials are not certain that Microsoft has violated any patents, and it is still unclear what the commission may decide.

Of course Microsoft has nothing to worry about
Why would they be the least nervous about such a provision being quashed?

Great party, until the anti-trust guys crashed it
The essence of anti-trust is when a company uses market power to win concessions – such as the one the Japanese are investigating – that it wouldn’t get otherwise.

If your company depends upon interoperating with Windows and Microsoft insists that you not sue them if some of your technology shows up in Windows, Microsoft is essentially extorting your agreement to grant them your IP. Absent Microsoft’s substantial market power, who would ever agree to such a thing? It is an abuse of market power even if they never appropriated a single line of code. Unless, evidently, you are a Microsoft lawyer or executive.

If we’re partners, why can’t I have all your stuff for free too?
In general, I don’t trust large companies to “do the right thing” with IP. Even a generally ethical company like HP sometimes veers off into gray areas. The real issue is that you are always dealing with individuals who may have their own agenda, regardless of company policy. And when company culture supports a “by any means necessary” attitude, look out.

Nice doggy, nice doggy. . .
So how do you deal with a large company that claims they are interested in acquiring you or your product and just needs to do some “due diligence”. You know, combing through your source code, picking your architect’s brains, and studying your key algorithms. Oh yeah, and we’ll want to glance at your books, too.

Wouldn’t it be wonderful if being lonely and needy made you more attractive?
When you feel little, weak and undercapitalized it can be hard to resist the blandishments of a big company making a fuss over you. “You’re so smart,” they say and even strong men start to simper.

The StorageMojo take
General policy: focus on the what your product does, rather than the “how” it does it. Don’t be flattered or bullied into over broad disclosure, even if they say they are talking to the competition. Stick to the business value of your product and how the features support that business value. Show some skin and then ask for some consideration in return. It is a courtship, not a strip search.

Don’t let your engineers talk to their engineers by themselves – engineers love to brag about how smart they are – while encouraging brainstorming on creative ways the larger company could monetize an investment in the product. You may still get screwed, but at least you’ll have the satisfaction of knowing you made them work for it.

Comments welcome of course. I’m off to NAB and then SNW next week, but even so I’ll have a very interesting post available Tuesday morning, early.