Clark C. Evans
May 23, 2000
Judge Penfield Jackson
United States District Court for the District of Columbia
333 Constitution Avenue, N.W.
Washington, D.C. 20001
Fax: (202) 354-3023
Honorable Judge Jackson,
As a software developer who has studied intellectual property law, I would like to present an alternative remedy for the Microsoft anti-trust case. I strongly feel that the root cause of our difficulty is an imbalanced copyright law, which is being used by Microsoft and many other software companies in a manner which undermines its constitutional justification and causes adverse economic effects. While remedies on the table will correct symptoms, the following proposal may additionally restore balance and could be applied industry wide.
In an emerging market, where prior investment is negligible, consumers desire highly differentiated software offerings; our legal environment supports this need exquisitely. However, in established markets, where consumers have invested in and have become dependent upon a particular software, these same consumers no longer desire competition for new and different software offerings. Instead, if given a choice, they would prefer competition for the change in the software they currently use. Unfortunately, our current legal practices, focused on emerging markets and justified with natural-right copyright thinking, deny the marketplace this alternative style of competition.
I do think that a contractual remedy for Microsoft, designed to establish such a competitive market for software upgrades, could prove more effective than a breakup. This proposal necessitates the creation of a non-profit registry-of-deeds tasked with maintaining records of software produced by revisions from competing authors. Specifically, the registry would administer access to source code and would calculate royalties from the licensing of administered software. The proposal rests on the following principles:
1. Before offering software to the marketplace, a developer would deposit into the registry all source code, description of patents, and design materials necessary to understand and build the program offered.
2. As part of each deposit, the developer would also specify an per-end-user licensing fee for programs derived from the material deposited.
3. Anyone can then retrieve these deposits and build from the material contained provided that any derived or competing work which the reader is thereafter involved is registered according to this same method.
4. When a derivative program is licensed, the sale price is calculated with the licensing fees for the materials upon which the program is derived. A technique involving anonymous serial numbers can be employed so that a given deposit is only licensed and charged once per user.
5. The developer may at any time reduce the posted price for their deposits; but may not license use of the material separately for amounts less than the posted price.
6. When fees are collected, royalties are distributed to each developer according to the number of licenses issued for each of their deposits.
7. The license for each deposit does not extend to trademarks, intellectual property of other parties, or material that was deposited separately. Deposits which would overlap in material must be decomposed into smaller units; the original treated as a derived work.
While the above may seem complicated, it will administer software that is a composite of revisions from competing authors. I am positive that most of this process can be automated so that developers, customers, and distributors are shielded from the administrative burden.
I believe that this mechanism could bring about more professionalism within the industry. It would eliminate bait-and-upgrade schemes. It would also improve software reliability. Lacking serious competition for upgrades, established software vendors have little incentive to work on quality control issues. Furthermore, with source code and design documents publicly available, retired programmers could be independently contracted for the evaluation of commercial applications. I can even imagine professional review organizations emerging, helping the consumer sort through the hype to identify those products with good, solid engineering.
I feel that the consumer benefits to this proposal are more clear than those benefits resulting from a breakup. Further, this proposal is not necessarily a penalty for Microsoft, but a more industry focused solution which other software organizations could voluntarily adopt. This proposal also does exactly what is needed for Microsoft, it forces a decreasing price non-discriminatory license. And the proposal opens up the operating system market for competition, albeit a different style of competition. With a bootstrap, such as the Microsoft Windows Operating System, this type of competition could gain much credibility as consumers realize the benefits and demand registration for other commercial software.
In short, this proposal provides the community of users with some say in the destiny of the software they have invested in and have become dependent upon. If you have any comments or questions, would like to talk about this further, please give me a telephone call at (202) 544-7775. I live in the D.C. area and can make myself available at any time.
Clark C. Evans
Charter for the Software Registry Of Deeds
The registry’s charter would include language about maintaining software design documents and source code (“Material”) that have been deposited, allowing consenting individuals to withdraw copies of a particular software’s Material, and issuing license for the use of binary versions of the software to consumers. The public elected board of directors for such an organization could include membership from diverse communities such as: (a) corporate software users, (b) government software users, (c) consumer advocates for home users, (d) independent software developers, (e) corporate software developers, (f) an representative of free software concerns, (g) a representative from the department of justice.
Contract Outline for Deposit Agreement
For this contract, we define the following: Registry is a non-profit registry-of-deeds as spelled out by its corporate charter; Program is the software program or library being deposited, as binary code unless specified otherwise; Material includes source codes, supplementary items, documentation, and all other information required to build and operate the Program deposited; Developer is the current copyright holder of the Material; User is an individual of the public who wishes to use the Program; Distributor is a potential distributor for the Program; And Reader is an individual of the public who wishes to obtain the Material. It should be clear that we intend a 1-1 relationship between the Program and its associated Material.
The essential elements of this contract include:
(a) The Developer grants the Registry specific rights to execute Reader agreements with potential Readers of the Material on behalf of the Developer; this includes a grant for all trade secrets necessary disclosed in the Material.
(b) The Developer grants the Registry specific rights to execute Usage agreements with potential Users of the Program on behalf of the Developer.; this includes a grant for all patent rights necessary to operate the Program.
(c) The Developer grants the Registry specific rights to execute Distribution agreements with potential Distributors of the Program on behalf of the Developer.
(d) The Developer hereby deposits to the Registry any and all Material relating to the Program.
(e) For consideration, the Registry on behalf of the User, will pay the Developer $X dollar royalty for every unit licensed under the Usage agreement.
(f) At any time, Developer can reduce their per unit royalty rate; but this rate may not be raised. Note that derived Programs do not automatically go down in price; they must be changed individually.
(g) The Developer may sell and/or license the software separately, but the agreement for sale must explicitly declare that the Registry was not used; and that the User is not entitled to the benefits of the Registry. (“Independent Licensing Clause”)
(h) In no way does this grant permission of use of the Developer’s trademarks. Although Derivative works are allowed to use the phrase: “A derivative of Program’s Trademark”.
(i) The Registry agrees to keep confidential all Material except as expressly addressed in the Reader agreement
(j) The Registry agrees to keep a specific registration number for each and every usage agreement executed, for privacy reasons no additional sale documentation will be obtained or stored.
Contract Outline for Reader Agreement
For this contract, we use the definitions above. In addition we define Derived work as any authoring of the Reader based upon the Materials delivered, and further we define Competitive work as any authoring of the Reader which is in competition with one or more Programs associated with the Materials and which was created within a 3 year period following exposure to said Materials. The essential elements of this contract include:
(k) The Registry hereby provides a copy of the Materials created by one or more Developers.
(l) The Reader agrees that any Derived or Competing works resulting from said Materials will be Deposited into the registry subject to the Deposit agreement. Furthermore, the Independent Licensing Clause does not apply in this case. (“Viral Clause”)
(m) The Reader agrees that its pricing (even if his/her changes are provided gratis) for any Derived or Competing works must include the pricing of the Programs it was derived from and/or in Competition with. ( “Price Aggregation Clause”)
(n) Lastly, the Reader agrees to keep the Materials confidential.
Contract Outline for Distribution Agreement
For this contract, we use the definitions above. In addition, define the Listed Price as a function of monthly quantity for each Product deposited into the Registry. The essential elements of the contract include:
(o) The Registry hereby provides a binary copy of the Program, possibly its packaging as well to Distributor for licensing to Users on behalf of the Developers of said Program.
(p) For each unit licensed, the Distributor agrees to pay the Registry on behalf of the Developers of the Program licensed, the Listed Price within 15 days of any such licensing.
(q) What will be distributed is actually a block of license numbers; those numbers given out to users as part of the Usage Agreement must be reported to the Registry to track licensing.
(r) Other standard distribution stuff… the Registry could implement a quantity discount program; given that the Deposit agreement reflects such a discount program.
Contract Outline for Usage Agreement
For this contract, we use the definitions above. The essential elements of the contract include:
(s) The Registry (through the Distributor) licenses to the User, on behalf of the Developer, N units of the software Program; where a unit is defined as one simultaneous individual accessing the Program’s resources.
(t) The Distributor guarantees that the Program sold has been Deposited into the Registry and that any individual can now legally create software derived from the Program.
(u) standard contract elements… lack of warranty, etc...
I sincerely hope that this is enough detail regarding the remedy proposed. The entire goal is to provide a competitive upgrade market for end users, while keeping a reasonable motivational benefit provided by developer compensation; all within our current legal and economic framework. This scheme provides as a nice side effect, the elimination of the “bait-and-upgrade” schemes where customers are lured into dependence upon the particular operation of a software product for “free”, becoming thereafter dependent upon a monopolized upgrade price. I personally believe that this proposal would also do wonders to increasing software reliability. Established software vendors have little incentive to work on quality control issues, not only do they face little competition in their upgrade market, but they can pay for product improvement through routine technical support, which is an additional charge beyond the licensing fees.
Further, I think that this proposal could be dressed up far nicer than a breakup or regulation; the benefit to consumers is clear, and the proposal is not necessarily a penalty for Microsoft, but more industry focused solution which other software organizations could, and in my opinion, should adopt. This proposal also does exactly what is needed for Microsoft, it forces a decreasing price non-discriminatory license, and opens up the operating system market to future competition. If Microsoft is half as innovative as they say they are, then they should have no problem keeping the lead.
In short, this proposal provides the community of users with some say in the destiny of the software they have invested in and have become dependent upon. And I especially resonate with Microsoft’s push for “freedom to innovate” this proposal is in full agreement with their stated goals; only that my interpretation of this freedom applies to non-Microsoft developers as well.
If you have any comments or questions, would like to talk about this further, please give me a telephone call at (202) 544-7775. I live in the D.C. area and can make myself available at any time.
Clark C. Evans
Independent Software Developer
http://distributedcopyright.org/ -- an out-dated proposal presented at Nader’s MS conference last spring
thought you might want to know; many of us “hard-core-programmer-nerds”
feel that you really understand these issues. It is so heart warming to know that a
U.S. District Judge really understands our industry. Thank you