Why Microsoft Should Settle The TomTom-Linux Patent Suit At Any Price


Here’s what Microsoft (MSFT) should offer GPS device maker TomTom, which it’s suing for patent infringement: A grant of full licence to the eight patents under dispute for a penny a year, plus an NDA binding both sites to not discuss the case publicly.

Why give away the store? Because the TomTom suit revolves around the hugely contentious but never legally tested notion that Linux may impinge on Microsoft’s intellectual property.

Linux, to its adherents, isn’t so much an open-source project as something akin to a religious movement. While there’s bound to be snark in any high-profile Microsoft case — we already see plenty in the budding EU antitrust investigation — taking on Linux in court is guaranteed to bring every open-source zealot and die-hard Microsoft-hater out of the woodwork to spew venom at Microsoft.

Not the kind of attention Microsoft wants as it readies a major new launch in Windows 7, possibly coming as as soon as September.

We already see signs Microsoft is thinking settlement. Typically when a company such as Microsoft is engaged in a high-profile patent action like this, its PR people keep mum. Not this time: Microsoft is already rushing statements online to say the giant is  “open to quickly resolving this situation.”

That’s the right approach. A purely nominal settlement allows Microsoft to save face and maintain the stance that its patents are fully valid. Money doesn’t matter — TomTom’s entire business is chicken-scratch to a company as big as Microsoft.

As for TomTom, a nominal settlement makes sense for it, too. Because if for some reason the company decides to play hardball and drag Microsoft through the mud, Microsoft can, should, and must use every legal strategem in its substantial arsenal to ruin the smaller company.