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Software distributors paying Microsoft patent tax
Since their 2006 deal with Novell, Microsoft has been demanding that software distributors pay for permission to use unspecified patents. When Microsoft announces these deals, the press releases usually mention free software or GNU/Linux, seemingly in an attempt to create uncertainty around their competitor. Microsoft's activity is characterised by some as patent trolling (although they wouldn't fit the narrower term of non-practising entity).
Microsoft claims that 70% of the sales of Android devices include royalty payments to Microsoft.
It is worth noting that users of Microsoft software are also paying patent tax. These costs get passed on to the users.
 List of companies paying
- Novell was the first famous case, in 2006 (see Microsoft-Novell patent deals)
- 2009-07-16: Melco: With Melco Group regarding Linux-based Buffalo NAS, and informationweek.com coverage Update: boycottnovell: Microsoft Sued Melco Group Over Linux and Microsoft is Likely to Lose Another Patent Case (VirnetX)
- Fuji Xerox
- LG Electronics
- TomTom  (see Microsoft v. TomTom (2008, USA))
- I-O Data, (Japan), paying Microsoft
- HTC - for each Android phone, HTC pays US$5 to Microsoft
- General Dynamics Itronix
Mark Shuttleworth of Canonical Group has characterised this activity as racketeering:
Microsoft is asking people to pay them for patents, but they won’t say which ones. If a guy walks into a shop and says: “It’s an unsafe neighbourhood, why don’t you pay me 20 bucks and I’ll make sure you’re okay,” that’s illegal. It’s racketeering.
 Reasons why companies sign
maybe you don't infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?"
IBM got their money. (source Forbes: Patently Absurd)
 Related pages on en.swpat.org
- Used for sabotage rather than competition
- All businesses are targets
- Patent trolls
- Microsoft's FAT patents
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