Microsoft bill would increase liability for Massachusetts companies
A bill currently under consideration in the Massachusetts Joint Committee on the Judiciary could lead to increased liability for Massachusetts companies.
Bill H02842, "relative to the use of stolen or misappropriated information technology in the manufacturing of goods" would allow companies to be sued by their competitors if their suppliers, in the U.S. or elsewhere, use "stolen or misappropriated" information technology, such as infringing copies of software products. The information technology isn't limited to specialized products used by manufacturers; it covers all technology used "to support in any way the design, manufacture, distribution, marketing, or sales of the articles or products." This would include software for common tasks, including word processing and spreadsheet applications.
A similar law failed in Utah after meeting stiff opposition from the Utah Food Industry Association and Utah Retail Merchant's Association. The 2011 Legislative Wrap Up[pdf] from those organizations stated in part, "As introduced, SB 201 [the Utah version of the bill] would have placed significant and unreasonable burdens on retailers and manufacturers. Microsoft had this bill introduced during the closing days of the legislative session and attempted to push it through under the radar and without much discussion... The association continues to stand in favor of addressing software piracy in a responsible manner and without the draconian penalties and burdens that are contained within Microsoft’s current model bill."
In Connecticut, Microsoft's Assistant General Council, Annmarie Levins, defended it to the Joint Committee on the Judiciary, "The bill would have no impact whatsoever on third party businesses with less than 50 million dollars in revenue or who lack a direct contractual relationship with the manufacturer who uses stolen IT."
Tim Phelan, president of the Connecticut Retail Merchant's Association, had a different view. "The passage of this bill would only in our opinion add confusion, misdirection and a serious disruption of commerce in Connecticut and it also places an unfair burden on retailers doing business in Connecticut and would require third party sellers, retailers who are in no way connected to the alleged misappropriation subject to damages, costs and fees," he said.
Various other organizations entered testimony regarding the bill in Connecticut. In favor were theMPAA and the Association for Competitive Technology. Opposed were General Motors, Xerox, and the Software & Information Industry Assoiation.
Meanwhile, others see the introduction of this bill into state legislatures as a new strategy by Microsoft to disadvantage open source and free software competitors. Pamela Jones, of the legal issues blog Groklaw, noted that open source software is deliberately excluded from the "technology" covered by the bill. She writes, "Red Hat, I assure you, does not give its software away to businesses who wish to contract with them. And if there is a violation of the GPL, the license that comes with Linux, it would indeed do harm, monetary harm, to the company. But for Red Hat, there is no relief under this law. Only Microsoft can harass its competitors, who must, under this law, stand still and take it, I gather."
The bill was sponsored by Representative Michael J. Moran (D), of Brighton. A committee hearing has not yet been scheduled.
