Microsoft Extends Embedded Indemnification

As the mobile and embedded industry continues to face various intellectual
property and patent challenges, Microsoft is upping the indemnification
ante it offers its partners.

Microsoft Embedded and Windows Mobile OEM partners and distributors will now
enjoy the same level of protection that other Microsoft platform partners
have benefited from.

Microsoft claims that the new protection is not being
driven as a direct result of recent alleged patent-infringement suits that
have been filed against Microsoft.

The extended indemnification protection now provides Windows Embedded and
Mobile OEMs and distributors with defense against IP claims in all of the
counties that Microsoft serves.

It also removes the monetary cap for
defense costs and provides protection of patent, copyright, trademark and
trade-secret claims related to Windows Mobile and Windows Embedded software.

At the end of 2005, Visto, a company partially owned by Research in Motion’s
patent nemesis NTP, filed suit
against Microsoft alleging that Windows Mobile 5.0 infringes on three
Visto-awarded patents.

But David Kaefer, director of business development for the Intellectual Property and Policy group at Microsoft, said that Visto was not the impetus for
the protection extension.

“I don’t think that any one lawsuit or circumstance is driving us towards
making this announcement,” Kaefer told “We have about two-dozen patent suits today that we defend against.

“Is it the Visto response? No, ” Kaefer continued. “This is something that is
specific to the amount of time it takes to deal with the unique needs of
this segment.”

Kaefer explained that Microsoft has been working on adding the additional
protection since May and that the delay is due to differences between
the embedded space and the rest of Microsoft’s product portfolio.

devices manufactures like to have a lot of say and control about how they shape
and even modify software to make it fit on devices. The potential for
modification is what makes it the indemnification a bit tricky.

Microsoft has now figured out a solution. According to Kaefer, the simple
notion is that source code that Microsoft ships is covered to the extent
that if the embedded distributor adds their own source code, that is not

The extension of indemnification for Mobile and Embedded partners is
particularly an advantage because of the high costs of dealing with potential
infringement issues.

“Many companies that have experimented with building their own software have
realized that it puts them in charge of managing the IP cost and risk,”
Kaefer said.

In the buy versus build decision, the added benefit of indemnity is a
significant value add in Kaefer’s view.

Microsoft’s protection is also noteworthy in that it extends to all of its
partners, regardless of size.

“It is common practice in the industry for some partners to get better
indemnifications than other partners,” Kaefer said. “The message that we’re
sending is that from our biggest partner to our most modest-sized partners,
you will all get one level of standard indemnification.”

Microsoft began its more widespread indemnification efforts originally back in 2004. IDC and Forrester Research shortly thereafter lauded its efforts as being industry-leading.

The mobile and embedded spaces remain fiercely competitive, with
Microsoft, according to
, leading the pack.

Linux is hardly a slouch in embedded and remains a competitor to Microsoft. A recent study reported that the embedded Linux market is valued at $100 million
dollars a year.

Linux has of course come under intellectual and patent
scrutiny from SCO in recent years; though Linux vendors have all, to some
degree, offered indemnification to their users, as well.

News Around the Web