Open source operating systems provider Lindows faces a penalty hearing after Microsoft told an Amsterdam court of appeals it hadn’t complied with a preliminary injunction.
At issue is the Lindows name, which Microsoft claims is too close in name to its own Windows software platform to be anything less than trademark infringement.
On March 8, an Amsterdam appeals court ruled that Lindows had infringed. The court ruled that the average computer user might not figure out that LindowsOS wasn’t a Microsoft product. It also said that previous legal rulings had established the right of a brand holder to every use of its brand name; therefore, it rejected Lindows’ argument that the Web site, Lindows.com, wouldn’t be confused with Microsoft’s operating system.
Now, Microsoft wants the court to fine San Diego-based Lindows more than the maximum for selling Lindows software in Belgium, Luxembourg and the Netherlands (Benelux) and for flouting a court order to stop using the Lindows name in those countries.
A summary judgment rendered on January 29, 2004 gave Microsoft everything it asked for. It required Lindows to immediately stop advertising or distributing software under the Lindows brand, to inform its Benelux distributors of the judgment, block Benelux residents from the Web site; to stop filling orders to Benelux; required it to pay court costs; and imposed a fine of 1,000 euros per day (about USD$1,222) if Lindows didn’t comply.
In a press release, Lindows said it’s implemented a complete withdrawal from the Benelux market, pending an appeal. But Microsoft’s new filing said that on February 26, a person in Amsterdam successfully ordered a package of “Lindows,” and that Lindows confirmed the order with delivery to Amsterdam.
“Since visitors to our Web site come from international ISPs, proxy servers,
anonymizers and other methods, it is impossible for us to comply with such a broad order to block all visitors from Benelux, and Microsoft knows this,” Michael Robertson, chief executive officer of Lindows, said in a statement.
“We believe they were violating the terms of the preliminary injunction order,” said Microsoft spokesperson Stacy Drake. “This situation is only about the Lindows name; we’re merely asking that they change it.”
“We did everything in our power to comply. We went to extreme measures to wipe our name off every possible place,” said Lindows spokesperson Kira Lee. She said she didn’t know whether her company had blocked users with IP addresses within Benelux from accessing Lindows.com. Company executives were not available for comment.
Lindows did place new language on its home page, advising residents of Belgium, Luxembourg and the Netherlands that they were not permitted to purchase Lindows software or access the site. It told them to click on a link, which led them to an alternative site, www.lin—s.com. The home page showed a game of hangman with Lin—s.com next to the gallows, and below, the alphabet with every letter except d, o and w crossed out. Microsoft complains that visitors to the “lindash” site still could purchase “Lin—s” software through it.
However, at press time, there was no link to www.lin—s.com on Lindows.com. The home page of the dash site says, “Important Notice! Sorry, pending our appeal visitors from the Netherlands, Belgium, and Luxembourg are not permitted to access our Web site or purchase our products.”
When asked whether the “lindash” site followed the letter but not the spirit of the injunction, Lee said, “We did everything the court asked us to, aside from just lying down and giving up. We feel the citizens of these countries still have a right to get these products. We won’t go against the court’s ruling to do that, so we tried to find a happy way to please everyone.”
Lee said she didn’t know whether her company’s management had considered changing its name. “There’s an issue when you do something like that, especially when we are so much smaller than Microsoft and don’t have the cash to go on these huge marketing campaigns.”
Robertson is the founder and former CEO of MP3.com, which he sold to Vivendi in 2001 for USD$372 million, with his personal share estimated at USD$100 million. While that may be considered chickenfeed by Microsoft standards, the Redmond, Wash.-based giant is not taking the issue lightly.
The court set the fine for disobedience to the order at 1,000 Euros per day, with a maximum 90,000 Euros. Microsoft had asked for 100,00 Euros a day, or USD$122,201.69 per day. Microsoft’s Drake said she wasn’t familiar with the case and couldn’t say why the company had asked for penalties 100 times in excess of the maximum set by the court. In any case, “We don’t comment on our legal strategy,” she said.
A judge is expected to hear Microsoft’s request to impose penalties on March 30, in Amsterdam.
