A Leveling of the IP Playing Field by Microsoft

Some time ago, Bill Gates made an interesting statement about software piracy.  “As long as they are going to steal it (software), we want them to steal ours. They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.”  The question was always just how Microsoft planned to collect?  One approach appears to be in the works; that of levying a lawsuit against established companies located in jurisdictions with strong IP enforcement laws when they receive goods or parts from companies overseas shown to be using pirated Microsoft software.  While the specifics of the idea are unique, the principle, using IP laws in jurisdictions where they are enforceable in order to indirectly enforce IP in jurisdictions where they are not as enforceable, is fairly common.  All Microsoft needs to have is the right legislature in place to show that it is illegal to do business with organizations that knowingly steal their IP.

What an interesting scenario, and I can certainly see Microsoft’s argument in this.  Substitute the ownership of IP with any physical asset – let’s say the ownership of petrol.  If I can ship goods with one trucking company for less than I can ship with its competitor because the first company steals its petrol and its competitor pays the going rate for petrol, and then I am made aware that my shipper is stealing petrol to keep its shipping prices low, wouldn’t I then indirectly be culpable of stealing petrol also if I continued to use them to ship my goods?  Of course I would be, certainly ethically if not to the letter of any given law on the books.  So why should it be any different with IP?

If all comes to pass, the next question will be how enforcement of such laws impacts the market and organizations involved.  The impact will not be equal.  Many companies headquartered in countries with good IP enforcement laws have alternatively benefited or been hurt by lax IP enforcement laws in countries where IP is used without due compensation to its owners.  Overall, I expect that a resulting leveling of the playing field would be an advantage to the competitiveness of domestic based workforces in counties with strong IP laws that have seen many knowledge jobs and opportunities shift overseas.  On the other hand, it also could have the opposite of the intended effect for Microsoft as it leads this charge, given that it could encourage domestic and overseas competitors alike to seek alternatives to Microsoft solutions in order to avoid any possibility of getting sued by Microsoft for product piracy – a variation on the strategic principle to “Let the Tiger (Microsoft here) Find No Place to Sink Its Claws.”     

Photo credit: Hemera