Microsoft seems to be trying to get its own personal unfair competition laws passed state by state, so it can sue US companies who get parts from overseas companies who used pirated Microsoft software anywhere in their business. The laws allow Microsoft to block the US company from selling the finished product in the state and compel them to pay damages for what the overseas supplier did.
You heard me right. If a company overseas uses a pirated version of Excel, let's say, keeping track of how many parts it has shipped or whatever, and then sends some parts to General Motors or any large company to incorporate into the finished product, Microsoft can sue *not the overseas supplier* but General Motors, for unfair competition. So can the state's Attorney General. I kid you not. For piracy that was done by someone else, overseas. The product could be T shirts. It doesn't matter what it is, so long as it's manufactured with contributions from an overseas supplier, like in China, who didn't pay Microsoft for software that it uses somewhere in the business. It's the US company that has to pay damages, not the overseas supplier.
Awful, I know. But the real question is, Why? Why is Microsoft doing this? Does Microsoft need a new revenue stream, now that folks are switching to smartphones instead of PCs? Or is it something worse, something Machiavellian? I ask that because I noticed two things, one, that Microsoft said that it came up with the laws because it is dissatisfied with patent law and two, something odd and frankly alarming in the Washington State version of this bill that leads me to suspect that this is Microsoft's Plan B in its litigation storm against Linux — its Ace in the hole in case the Supreme Court decides that its software is unpatentable.
Not that Microsoft would mind having more than one way to harass Linux and it competitors in general, or two revenue streams without having to actually work to make better products. I'd like to show you how Open Source is deliberately excluded, though, a deliberate carve out.
How can there be state copyright-related statutes without conflicting with US Copyright Law, which is federal? You may well ask. Some are already saying that they think the bills are unconstitutional, but not only has such a bill just passed the Senate and the House in Washington State, 90-4 natch, Louisiana passed such a bill already, the Unfair Trade Practices and Consumer Protection Law, which you can read about here. Microsoft tried and failed in Utah, so far, but similar bills are working their way through the state legislatures in Massachusetts, Kentucky, New York, Connecticut, Arizona, Illinois and Oregon. So what might Microsoft do with such a bill?
Let us analyze it by repeating. If a company overseas uses Microsoft's software, a pirated version, not in any step of the manufacturing process alone but anywhere in that business, and then sells the parts to a US company to become part of a larger product, the US company can be liable for damages, tripled if it was knowingly done and it can be blocked from selling the product in Washington State. The «victim» can sue in civil court and the Attorney General can go after the «wrongdoer» US company, if a notice is sent and no amelioration occurs. But if the violation is of an *open source license*, the victim can't sue anyone under the bill, and the Attorney General does nothing for you. It's an exception to the law.
Think Android, for example. Do you think there could be anticompetitive effects of such a law? Well. Fairness isn't exactly Microsoft's middle name. If you reread the Supreme Court's ruling in AT&T v. Microsoft, I think you can see at least some reasons why Microsoft might be unhappy with patent law. In that instance, it benefited them. But they have lawyers. I think they got more than they wanted, and they might be imagining how things might go if they were the plaintiff instead of the defendant. I'd rather not elaborate, in that I don't wish to teach Microsoft anything it doesn't already have in mind.
But getting back to the new law, while it is awful on its face, what makes it worse is that in the Washington State version that just passed both the House and the Senate and which is now being worked on to merge the two, if the violation is of an Open Source license, there is no recourse under the proposed law.
Here's the Senate report [PDF] on the bill in Washington State, which I've done as text, and which explains what those for and against the bill argued as to why it should or should not be passed, and I've red-text-ed the parts about Open Source, because it's long. Also, in purple you see the neat trick whereby no one can sue Microsoft over its software under this law. This report is, as it explains, not the bill but what legislative staff wrote up to explain it: (Далее длинный кусок текста)