The software giant has been a prolific intellectual property mill over the past two decades, securing more than 3,000 US patents. But as Microsoft and other large companies actively embrace open standards as a way to expand the market for Web services and other technology, they walk a fine line between promoting the adoption of standards and protecting valuable proprietary software.
Standards such as Extensible Markup Language (XML), a format for creating structured documents and facilitating Web services, have been embraced by Microsoft and others as a way to ensure the interchange of data between disparate computing systems. The basic XML description is freely published and open to anyone, but the software Microsoft and others are building to exploit XML isn't, leading to a growing list of granted and pending patents covering methods for manipulating XML data.
In just the past month, Microsoft has applied for patents in Europe and elsewhere to cover how XML-based documents are created in the company's dominant Word software. Analysts and rivals claim the company is attempting to use patented technology to lock out competitors. Microsoft contends it is simply protecting its intellectual property.
At the same time, Microsoft has agreed to give away the proprietary XML dialects, or schemas, its new Office 2003 package uses to describe documents.
The situation is indicative of a struggle faced by Microsoft and other companies, said Stephen O'Grady, an analyst for research firm Red Monk. They want to profit from their research and innovations, yet standards-based technology has to be freely available on some level to encourage broad adoption and ensure interoperability.
"There's always a struggle between openness and keeping your technology to yourself," for companies like Microsoft that are "proprietary in nature," O'Grady said. "There is a fine line there. You need a sizable community to commit to a particular product and format to give that product relevance. But you also want to protect your interests."
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