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CEO gives Microsoft 'Window' pains
Lindows.com founder heading for court date with Bill Gates
By David Kirkpatrick
FORTUNE.COM
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(FORTUNE.COM) -- To hear Michael Robertson tell it, he's got Microsoft over a barrel. The man made a fortune when he sold his earlier company, MP3.com, after taking on the major record labels. Now, with Lindows.com, he's gunning for the strongest, richest tech company of all. Says Robertson: "I think God put me on this world to challenge big companies."
But he has a problem: the name Lindows.com he chose for his company, which distributes a desktop version of the open-source Linux operating system. Clearly he intended to evoke the trademarked brand Windows. Microsoft is not pleased, and is fighting back.
It wants Lindows.com to change its name, and sued almost two years ago, before the company even had a product, to try to force it to do so. Microsoft sought an injunction to prevent use of the name, but the judge refused. Now, in about three weeks, the case finally goes to a jury trial in Seattle. Bill Gates is scheduled to take the stand in the first week of December.
Lindows.com is the kind of company that keeps Steve Ballmer and Bill Gates up at night. Says Robertson: "Microsoft has conceded that the server will have some Linux competition, but they've drawn a line in the sand at the desktop."
Windows on the desktop is a huge part of what makes Microsoft the world's most profitable company. Robertson is right -- Microsoft doesn't welcome competition here. But with IBM and many others now touting the notion that Linux belongs on many peoples' desktops, competition is coming. Meanwhile, Lindows.com has hardly any customers.
But Robertson professes great confidence in his ability to beat back Microsoft's suit. "In every category of trademark law we've got a bazooka," he says. His lawyer's argument will be that the word windows is in common parlance as a computer term, and as what he calls "a generic word," it is not defensible as a trademark.
And since Lindows changes a letter, it is even further from the trademarked name. Among evidence Robertson cites are numerous dictionaries published by Microsoft itself that refer to "windowing systems" in computing; press articles from the 1980s about "windows wars," as different companies competed in software; and evidence from subpoenaed internal Microsoft documents, which he says show employees talking generically about windows systems.
But his favorite piece of evidence is what he says are contradictory sworn depositions from Gates—one from the lawsuit Apple filed against Microsoft way back in the 1980's over Windows (claiming it stole many of the ideas for Windows), and one from this case. Says Robertson: "Gates in the Apple trial said 'there are dozens and dozens of windows systems out there.' But in his deposition in our trial he says there are no other Windows systems and nobody has ever referred to systems that way."
Sound delicious? I thought so, too, until I spoke to some people at Microsoft. Spokesperson Stacy Drake wouldn't directly address Gates' deposition from this case, and noted that Robertson shouldn't either (the deposition is still not public). But she did talk about Robertson's trademark claims: "He's trying to confuse two very different things. A 'window' is a term used in the tech industry in the 1980's to describe a feature, and no one at Microsoft claims to have invented the term or the feature.
'Windows' is a descriptive mark for our operating system product...Microsoft has invested in the Windows mark over the past 20 years and consumers understand it as the name for our operating system products. For instance, if you were to go into a store today and ask for 'Windows' software, you would undoubtedly expect to be shown a Microsoft product."
I suppose if Gates explains that clearly in his deposition (though he's not known for good depositions) then Microsoft may make a good case. And Drake says that Microsoft does have good evidence to rebut Lindows.com's case. For instance, she says that the company's review of press clippings from past decades make clear the distinction between trademark and generic term.
"All we want from Lindows.com is just that they change their name," says Drake. "Nobody at Microsoft is saying that he shouldn't go out and build a better mousetrap.... He just shouldn't call it the same name as our mousetrap."
But wait a minute—it's not the same name, right? No matter, says Drake. At the base of Microsoft's suit is the claim that customers will be confused and the company will suffer harm to its Windows business. Now Microsoft has actually done what's called a "random mall intercept study," and found that about 18 percent of people assume that something called Lindows must have come from Microsoft. That's enough to be concerned about, executives say.
Guys, why don't you just settle? Robertson sounds like he would change the company's name if Microsoft paid him enough money. "But the last thing they want to do," he says, "is give us money to compete with them." Microsoft won't comment, though I suspect a settlement is not inconceivable.
Microsoft's real problem is not Lindows.com, but the inexorable tide of Linux and other free, open-source software that continues to rise toward it. Microsoft probably won't accomplish much with this lawsuit whether it wins, loses, or settles, except to delay a very good marketer from getting traction.
That's certainly what Robertson thinks Redmond executives wanted to achieve: "This lawsuit has everything to do with trying to thwart competition and delay us. And they have been successful in putting a dark cloud over us." He says that the biggest impact has been in the financial markets, which have been shut tight during the entire process because of the shadow of uncertainty the suit puts over the company. (Robertson himself is the company's sole investor.)
Then again, he's getting lots of free publicity for Lindows.com from this lawsuit, including from me right now. Expect to hear more about this imbroglio in coming weeks.
David Kirkpatrick is senior editor for Internet and technology for Fortune.com.
