Summary: SJVN adds his weight to speculators who reckon that Novell may negotiate a sale to VMware, which is run by Microsoft executives who left Microsoft

Steven J. Vaughan-Nichols (SJVN) believes that it’s reasonable for VMware to buy Novell right now, regardless of all the recent rumours that say so as well. Now that takeovers time is due for one Novell-sized company (HP buys 3PAR for Novell’s market value), he explains the logic as follows:

VMware and Novell have already partnered to bring SUSE Linux Enterprise Server (SLES) to VMware vSphere virtual machines. During Novell’s earnings call, Novell CEO Ron Hovsepian said that VMware sales staff has incentives to sell SUSE support and services to their customers. Hovsepian added that VMware and Novell would expand on what’s going on with their partnership at this coming week’s VMworld trade show.

Could the two companies announce a merger? There have been rumors for some time that VMware might buy Novell. I don’t know much about those rumors, but I do know that it’s a deal that makes a lot of sense for both companies.

The title of the above post is “VMware should buy Novell” and I asked the author: “should? You want lots of Microsoft execs to own Novell and UNIX??”

“…VMware has been no friend to MSFT, or vice-versa, for the last year or so.”
      –Steven J. Vaughan-NicholsHe replies by saying “”Should” as in it makes biz sense. Also VMware has been no friend to MSFT, or vice-versa, for the last year or so. Check it out”

There has been some chatter in blogs recently about VMware as Novell’s escape route from Microsoft dependency, but it ought to be known that VMware is now run by former Microsoft executives, so the relationship with Microsoft would not evaporate completely.

Vaughan-Nichols also links to this post from a colleague of his, who helps promote SUSE Studio (SJVN does not oppose the Novell/Microsoft deal, he never did) and earlier today he promoted Novell for “peaceful co-existence” (which we don’t agree patent deals bring about):

Novell and Microsoft are more than happy to help you bridge the gap between Linux and Windows.

Once upon a time, bridging the gap between Windows and Linux in the server room or the office was… difficult. Today, while no one’s going to call it easy, Novell and Microsoft have worked hard on ensuring interoperability doesn’t require either a Linux wizard or a Windows expert.

The two technology giants have been at this since they formed their unlikely partnership in November, 2006. Almost five years later, besides the business benefits the two companies have found in working together, Novell and Microsoft have made considerable progress in getting Linux and Windows to get along both on the server and the desktop level.

It’s all just intended to sell more Windows and less GNU/Linux. We covered this before. █

“We are going to cut off their air supply. Everything they’re selling, we’re going to give away for free.”

–Paul Maritz, former Microsoft Vice President, referring to Netscape

Paul Maritz
Photo by former Microsoft evangelist Robert Scoble

Summary: Several former Microsoft chiefs (now running VMware) may soon own the second-largest server distribution/product built with GNU/Linux, which is also a source of revenue to Microsoft

NOVELL’S market position has been weakening for years and its market cap falling to dangerous levels. News sources say that Novell is about to be acquired and it’s primarily one source that all the reports rely on. “Why would Novell announce sale in 6 weeks,” gnufreex asked. “You announce deal when it is done… And when it is definitive… They are just trying to pump stock… They have nothing.” Agent Smith” wrote: “Novell being sold in parts. What will become of OpenSuse ???” (more details in the IRC logs we’ll publish later).

“They are just trying to pump stock… They have nothing.”
      –gnufreexgnufreex said that “maybe Novell is pumping it [the stock] to buy time. Their Market Cap was 1.9b yesterday. If it slides more, they can’t get same offer as they got from Elliot… Shareholder would sue for refusing Elliot offer… If market cap goes under 1.9B…

“What I meant is that Novell is getting panicky because their market cap is sliding below the level it was when Eliot made them an offer. If it falls bellow that level, then buyers are going to offer less than Elliot offered. And shareholders might sue because they got the worse deal because Hovsepian turned down Elliot offer without letting shareholders vote (there was no vote about Elliot)”

“Agent Smith” wrote: “Received tweets hinting VMware’s the mystery buyer of Novell Novell Sold to VMware”

We’ll come to this in just a moment.

First of all, here are some more reports about Novell closing its sale (following a split). The following is everything we’ve found on the Web so far, without exception:

• Novell breakup and sale imminent, says report

Commercial operating system maker Novell is close to selling itself off after breaking it into two bits, according to the is New York Post.

Citing unnamed sources, the Post says a “strategic buyer” will shell out cash to acquire the SUSE Linux business that Novell paid $210m for in November 2003. That Linux business has just finally made it to break-even, according to Novell, and will by our estimates generate maybe $145m in revenues in fiscal 2010. (Novell brought in $108.2m in Linux platform sales in the first nine months of fiscal 2010 ended in July).

• Novell Agrees To Sell Itself In Two Parts, N.Y. Post Reports

• Novell nearing sale, says report; shares rise (Reuters)

“Shares of Novell jump 6% on buyout report,” said a Microsoft booster (the SCO booster wrote about it too):

Shares of Novell jump 6% on buyout report

[...]

The New York Post, citing unnamed sources, said the struggling business software maker plans to sell the company to a “strategic buyer” and a private equity firm.

To say more about the stock: “Shares of Novell Inc. (NASDAQ: NOVL) rallied more than 6% in pre-market tradng after the New York Post reported that the business software maker has reached a deal in principle to sell itself in two parts, and is three to four weeks away from signing a deal.”

Also: “Novell Inc (NASDAQ: NOVL) soared 5.03% to $5.85 in the pre-market trading. NOVL’s trailing-twelve-month gross margin is 78.54%.”

One financial report summarised it as follows: “Novell Inc. (NOVL US): The maker of Linux operating-system software has reached an agreement in principle to sell itself in two parts, the New York Post reported, citing people close to the process.”

Financial news from prior days indicated problems for Novell [1, 2, 3], but not everything was pessimistic [1, 2].

Red Hat’s Jan Wildeboer wrote: “Big things are coming up. Nuff said. And no, it is not Red Hat being bought.”

People still send us messages asking something along the lines of, “what about OpenSUSE?” The project should take a lesson from OpenSolaris and take action before Novell (or its acquiror) does. We urged OpenSUSE people to fork and escape the relationship with Novell, which may no longer exist very soon.

What happens to Mono and Moonlight? Maybe Microsoft can have them (no, it’s not a joke).

The LWN discussion had just one comment at the time of writing and it said: “The WallStreet Journal has the rumour that the buyer of the GNU/Linux part might be VMware Inc.

“I don’t know much about VMWare Inc., but at first glance they seem ok. Not too likely to pull an Oracle.

“Anyone got more info?”

Here is the article which suggested that VMware is afoot (Maritz and fellow executives from Microsoft). Rather than Microsoft buying SUSE as some people speculated very long ago it may be Microsoft executives who take control of SUSE and harm it or sell it at Red Hat’s expense (with Microsoft tax). Only a couple of weeks ago we found articles like this one:

Some people might be surprised to hear that that vCD is based on RHEL v5 U4 and not on Novell SUSE. You might know that VMware recently decided to standardize on Novell SUSE for all its virtual appliances, and an OEM deal was struck between the two companies. The operative word here is “recently.” Sadly, the deal was struck at such a time that VMware could not use Novell SUSE for vCD. Merely from a standardization perspective, I would like to see that change at the next release of the product, but I think we will have to wait for the vCD 2.0 offering before that transpires.

At around 3:50 of the following video the same subject gets covered.

The idea that VMware might buy Novell is not new at all as it has been floating for months and never quite denied or debunk (not convincingly anyway). █

Summary: As loads of security problems occupy the world of Windows, Microsoft resorts to seeking help from security firms it competes with and more botnets thrive nonetheless

Microsoft is having a tough month dealing with many security problems caused by its own weaknesses. This post is a quick accumulation of some issues from the past 2 weeks.

Viruses

Earlier in the month we wrote about the ‘Here You Have’ virus, which got a lot of news coverage [1, 2, 3]. It was politically motivated:

THE HACKER claiming credit for the ‘Here you have’ Trojan, written as a blow against the invasion and occupation of Iraq, might be located in Spain.

Cisco says that this virus caused brief havoc. It affects everyone to a certain extent.

Stuxnet

Stuxnet is real bummer which we covered in [1, 2, 3, 4, 5, 6, 7, 8, 9]. “Holes used by the Stuxnet worm remain in Windows XP,” said this recent report (there are more) and it is exploiting zero-day flaws. Microsoft liaises with Kaspersky in hopes of tackling this problem. Eventually some patches arrived [1, 2, 3, 4] but only after a lot of damage had been done. It turns out that Symantec — not just Kaspersky — helped Microsoft here:

Microsoft has credited security partners at Kaspersky Lab and Symantec for helping to close a critical Windows vulnerability that was being exploited by a sophisticated worm that has attacked industrial plant

Symantec

Earlier this month Symantec created a tie-up with Microsoft’s Fog Computing [1, 2]. Then came speculations that Microsoft was looking to buy Symantec. It was just a rumour (likely false), but investors took it seriously and Symantec surged [1, 2, 3, 4, 5]. The stock being driven up like this may always lead to suspicion that someone spread the rumour just to make money in a short-term period. That’s illegal of course and the SEC should keep an eye open.

Speaking of acquisitions by Microsoft, “PopCap Rejected $5 Million Microsoft Buyout” says this one report among many more [1, 2,
3]. This one says that “Microsoft tried to convince PopCap it was only worth $5 million, but the studio didn’t believe it.” To quote another item, ‘During an interview with Develop, Jason Kapalka, creative director at PopCap, explained how even Microsoft tried to buy them, but the offer price was a joke: “We had a couple of funny instances in the early years of PopCap where we were talking to Microsoft about a possible acquisition – I think it was in 2002 – and they sat us down and gave us this long speech about why our company was worth 5 million dollars, at a time when we had four million in the bank.”‘

Fakes

Back to insecurity, an older rogue antivirus attack gave trouble to Windows users this month [1, 2, 3, 4, 5]. It’s a form of malware. In an operating system where antivirus software is not necessary, this would hardly be an issue.

ASP.NET

Microsoft is acknowledging that there is a security problem with ASP.NET, as mentioned here last week.

Microsoft has released a security advisory about a vulnerability affecting Web applications built on ASP.NET.

Here is another article about it.

It’s already being exploited, based on today’s reports:

Attackers have begun exploiting a recently disclosed vulnerability in Microsoft web-development applications that opens password files and other sensitive data to interception and tampering.

The vulnerability in the way ASP.Net apps encrypt data was disclosed last week at the Ekoparty Conference in Argentina. Microsoft on Friday issued a temporary fix for the so-called “cryptographic padding attack,” which allows attackers to decrypt protected files by sending vulnerable systems large numbers of corrupted requests.

Now, Microsoft security pros say they are seeing “limited attacks” in the wild and warned that they can be used to read and tamper with a system’s most sensitive configuration files.

Malware

There are many new stories about malware, such as:

i. Report: More Than 1 Million Web Sites Serving Malware in Q2 [via]

Web anti malware firm Dasient has published data claiming that more than 1 million Web sites were compromised in the second quarter, 2010 – a sharp increase.

More than one million Web domains were infected with malicious code in the second quarter of 2010 – around one percent of all active Web domains, according to data released by Web security firm Dasient, Inc.

ii. Pirate Bay beset by tainted ads

The tainted ads exposed visiting surfers to Windows Trojans via drive-by download attacks. Pirate Bay has experienced similar problems in the past, and it’s unclear how long it will take to clear up the latest issues.

iii. Study: 33% of SMBs Have Been Infected With Malware From Social Networks

About one-third of small and medium-sized businesses have been infected with malware from social networks like Facebook and Twitter, according to a recent study released by Panda Security, a company specializing in cloud security.

iv. Windows malware dwarfs other viral threats

The vast majority of malware – more than 99 per cent – targets Windows PCs, according to a new survey by German anti-virus firm G-Data.

G-Data reckons 99.4 per cent of all new malware of the first half of 2010 targeted Microsoft’s operating system. Just 0.6 per cent of the 1,017,208 new malware programs discovered in 1H2010 targeted other systems, such as Apple Mac boxes and servers running Unix.

Botnet

When one in two Windows computers is said to be a zombie PC, there is clearly a problem, especially when it goes on for years, still unresolved. Some of the latest Windows botnets stories are:

i. A botnet for hire springs up

Insecurity outfit Damballa revealed that the creatively named IMDDOS (I’m DDoS) botnet can be hired out as “pressure test software” by those who are willing to cough up some cash and download an application. The application is little more than dialogue box allowing the user to point the botnet to a particular IP address and port number and start hitting it with spurious requests.

ii. Microsoft Helps Cox Identify Infected Computers

iii. Microsoft gets legal might to target spamming botnets

iv. Microsoft gets superweapon for fighting botnets

Internet Explorer 8

The very latest version of Internet Explorer is still not so widely adopted because of Microsoft’s hostility towards the Web which it still cannot reverse. Here is the latest vulnerability in Internet Explorer 8 [1, 2].

Late last week, a security flaw in Internet Explorer 8 was publicly disclosed to the Full Disclosure mailing list. The flaw allows attackers to steal private information from online services such as web mail and Twitter, allowing attackers to, for example, delete e-mails or send tweets from their victims’ accounts.

Exchange

“Microsoft Exchange opens the door for hackers,” says The Inquirer.

FIRMS RUNNING Microsoft’s Exchange mail server could find that users of its Outlook Web Access (OWA) software have their sessions hijacked.

A security vulnerability in Exchange Server 2003 SP2 and Exchange Server 2007 SP1 and SP2 means that attackers can take control of a user’s OWA session and issue commands up to the level permitted by security controls without the user knowing. OWA is a rich ‘web mail’ client that is offered by Exchange Server and has the look and feel of Microsoft’s standalone Outlook software.

According to this, a well-selling Linux phone (not Ballnux) suffers from its reliance on Exchange.

There are rumors that the possible technical problem with the Microsoft Exchange is causing the delay of Android 2.2 Froyo push to Motorola Droid X devices. Multiple news outlets including Droid Life has confirmed the news.

Who needs Exchange anyway? It’s just a brand. Android can do better than that and also avert the security problems. █

Summary: Analysts take a close look at Microsoft and they don’t like what they see; Microsoft is apparently trying to hide losses by merging units; alleged Microsoft employees are suggesting that more layoffs are weeks away

MICROSOFT’S financial situation is somewhat of a misunderstood subject because the company has debt and despite bragging about huge profits the company has vapourised a lot of its cash reserves. Under Ballmer’s reign or era the company lost about half its value (Microsoft would rather people evaluate it by its stock alone). Microsoft’s GNU/Linux-hostile COO Mr. Turner is dumping his Microsoft shares and despite some recovery in the stock market (see Red Hat’s performance for example) Microsoft’s performance remains rather abysmal:

Microsoft, down about 22 percent this year, is a profit powerhouse. In its last fiscal year that ended in June, it posted a 40 percent pretax profit margin and a return on stockholders’ equity of 44 percent.

That’s what Microsoft says, but there are more sceptical people out there.

“[T]he shell game of hiding loses, moving divisions around that are losing too much money (Kin)”
      –Chips B. MalroyMicrosoft thinks that Microsoft is cheap and some people went along with this type of headline (we found two examples), implying that Microsoft is about to surge. Well, on what basis exactly? A current/former Microsoft shareholder suggests dumping the stock. The company’s financials are not so impressive (buybacks imminent) and Microsoft has debt (last covered last week and therefore not worth repeating).

“Jefferies & Co. said Microsoft Corp. could borrow up to $4.5 billion,” according to two separate articles from last week [1, 2]. The latter says “Jefferies Thinks Microsoft Could Borrow $4.5 Billion” (Microsoft has already borrowed several billions).

Mary Jo Microsoft has just revealed that Microsoft may be using the old trick of merging unrelated businesses so as to make all divisions look profitable. We saw Microsoft doing this several times before. This time it’s a huge stretch because Microsoft tries to merge embedded (failing) with server and tools (successful). This way, according to our reader Chips, the failure will be hidden away in a bigger bucket. It’s “the shell game of hiding loses, moving divisions around that are losing too much money (Kin),” he explains.

There’s some odd reorg-related news coming out of Microsoft today, September 20. The company is announcing that it is moving its Embedded business into the Server and Tools unit.

[...]

I had been assuming Embedded might end up as part of Windows client or maybe as part of the Mobile Communications Business (since Microsoft’s Mobilebusiness is one of the biggest — though not the only — OEM for the various Embedded division products).

This is worse than the Microsoft blog makes it seem (we have not yet identified any proper analysis of this). But it gets worse. After some recent downgrades and the like from a Standard & Poor’s analyst and from Credit Suisse Microsoft takes another couple of hits. “FBR cuts Microsoft profit view” says this report which expands as follows: “FBR Capital Markets lowered its profit estimates for software giant Microsoft Corp due to softening consumer demand for PCs.”

“[O]nly seen about 3 comments new on Mini msft about layoffs, maybe in Oct.”
      –Chips B. Malroy“Morgan Stanley Cuts Estimates on Microsoft Corp.’s Slower PC Sales” says another report, just one among several. This cannot be good. It means that Microsoft’s upcoming results will not impress (even it they beat already-lowered street expectations, as usual because it’s easy to assure).

Chips B. Malroy says that he has “only seen about 3 comments new on Mini msft about layoffs, maybe in Oct.” That’s the blog where many anonymous Microsoft employees comment. Have any other readers noticed something about layoffs that are coming next month? Microsoft has had many rounds of layoffs in recent years because it's moving overseas to cut costs. This often means that the quality of products is reduced, not just working conditions and wages.

To repeat what was said at the start, Microsoft lost about half its value over the past decade (mostly under Ballmer’s management) and one item of news says: “That’s right, Microsoft is nearly $170 billion cheaper today than it was a decade ago. That’s an eye-popping discount. Of course, there are plenty of stocks that have gone backwards during the past 10 years, however, most are just a shadow of their former selves.”

Microsoft’s market cap is well behind Apple's and in terms of brand value Microsoft is not doing so well, either. Its position fell over the years [1, 2, 3, 4, 5]. This is one of the more Microsoft-friendly ladders and in this specific one “third place is still occupied by Microsoft, the software giant.” In some other surveys/ladders of this kind Microsoft is doing much worse (the UK one/s being the exception).

Here is a fascinating observation that we found. It just states the obvious:

It’s to assuage worries that too much of MS’s value is held overseas, resulting in tricky taxation situations. More than anything else this confirms one thing: Despite its PR, MS isn’t in the business of serving consumers … it’s a money-making machine.

“Why Apple Beats Microsoft At Change Management” says this headline from Forbes and although we spend no time comparing Microsoft to Apple (it’s the wrong comparison to have when we really deal with software freedom versus proprietary software, not brands), Chips B. Malroy insisted on pointing out (twice even) that Apple’s hypePad (and to some extent Google Android too) is causing huge damage to Microsoft sales. █

Jobs image licensed under the GNU Free Documentation License (version 1.2 or any later versions); Ellison patch By Thomas Hawk

Summary: Rumours and speculations that Oracle might prepare to buy ARM Holdings may arouse the suspicion that Android is Ellison’s target

OIN has added Mozilla as a licensee and pro-GNU/Linux bloggers keep talking about it. One person remarked:

I hope OIN is good for Mozilla, but what about Oracle? #swpats

The troubling thing is that despite Oracle and Google both being inside the OIN shield zone, Oracle decided to sue Google using software patents [1, 2, 3, 4, 5, 6] and interestingly enough, as Groklaw points out, they are assigned the same judge as in the Apple vs. Psystar case.

Google has appeared in the Oracle v. Google litigation and they have extra time to file an answer to Oracle’s complaint. Meanwhile, they’ve added some more lawyers to the team and informed the court they decline to have the case handled by a magistrate judge, so it’s been assigned to the Hon. William Alsup. What are the odds? That’s the same judge who presided over the Apple v. Psystar case.

Previously we found rumours that Apple would buy ARM (reported less than a year ago in many news outlets) and also learned that Steve Jobs’ friendship with Larry Ellison might have something to do with the legal attack on Android [1, 2, 3] (Apple is also suing Android using software patents). Right now there is news suggesting that Oracle — not Apple — might buy ARM Holdings, which recently signed a deal with Microsoft.

ARM Holdings Plc, the U.K. designer of chips that power Apple Inc.’s iPhone, rose the most in two weeks in London trading after Oracle Corp. Chief Executive Officer Larry Ellison said his company may buy a chipmaker.

ARM rose as much as 6.8 percent to 417.5 pence, and traded up 6 percent to 414.4 pence as of 12:19 p.m., valuing the company at about 5.47 billion pounds ($8.6 billion).

“We primarily think this is about Ellison,” said Lee Simpson, an analyst at Jefferies Intl Ltd. in London, adding that the “Oracle speculation is unwarranted” and that the company would more likely target an enterprise-focused chipmaker such as Advanced Micro Devices Inc.

Has Oracle not gotten enough from Sun’s SPARC? Back when it was rumoured that Apple would buy ARM people said that it can be seen as an attack on Android. Could the strong friendship between Ellison and Jobs play a role here? As pointed out some hours ago, collusion of this kind if a lot more common than people dare to imagine. █

Professor Milo, Batman: The Animated Series

Summary: Project Milo (KINect) has been killed by Microsoft’s Lionhead Studios, according to unconfirmed reports

Dead products at Microsoft are a couple a month, on average. Microsoft has been cutting down expenses by ending many products and closing down divisions for a few years now, leaving the profitable ones in tact and giving more time to losing products, hoping for some reversal or cross-product leverage (e.g. Zune being used as a tool/means to lift Xbox). The latest dead product from Microsoft is poor Milo, which is said to be canceled although Microsoft cannot confirm this just yet. To quote one report among many:

Kotaku’s reporting that the plug’s been pulled on Lionhead Studios’ ambitious Project Milo for Kinect. The undertaking–also referred to as Milo & Kate–was the jewel of Microsoft’s 2009 E3 presentation, containing the most forward-looking of the motion-gaming ideas during the press conference.

Some sites talk about it as though it’s a fact and some reserve judgment, instead just asking, “‘Milo & Kate’ scrapped by Microsoft?”

Other sites attribute to the source of the claim or call it a “rumor”.

There is this one contradictory report and having had its KINect product trashed, Microsoft too is mocking the competition to hide its own failings. It’s not a winning strategy and it leaves Nintendo in a stronger position. █

Summary: A German tabloid publishes a speculative piece about a Microsoft acquisition of Nokia

“From the rumour mill,” writes a reader of ours, “Bild.de, Germany’s largest tabloid, is speculating that Micro-Soft will swallow Nokia.” Our reader translates that as “Nokia: the fall of the Mobile giant – now a takeover by Microsoft is looming” and for context see our recent very posts about Microsoft in Nokia:

• If You Can’t Beat Them, Hijack Them (Microsoft Joins Nokia and It Already Shows)
• Linux Battle in Mobile Phones Becomes Primarily Legal, Not Technical, Due to Software Patents
• Taking Over Linux, by Proxy
• Microsoft Passes More of Its Executives to the MSBBC. What About Nokia?
• Microsoft President Quits, But is Nokia the Next Victim?
• Microsoft Insiders Galore: BBC, Nokia, Others Already Damaged by Microsoft Hires
• Linspire/Ballnux in Tablets; HP Possibly Experiments With Vista 7 in Slate After Abandoning It, Then Hiring From Microsoft

This would make little sense as Nokia can get almost nothing out of Microsoft^*, which has problems with growing debt and lack of acquisitions — a shocking observation that it struggles to deny. █
____
^*The same goes for Blackberry (RIM), which now embraces (exploits) some Free/open source software and for the Playbook uses QNX, based someone who reports that “the company announced the BlackBerry Tablet OS, which will power the Playbook. The OS is built on the QNX architecture, which the company touts as one of the most “reliable, secure and robust” architectures.”

Summary: The vast majority of Windows Live Spaces is about to get wiped out, according to a source familiar with those matters

Windows Live Spaces became a notorious spam trap, as pointed out by blogs over the past year or so. Microsoft was a very poor steward, so the whole network got filled with splogs and other rubbish. Microsoft is playing loose with the numbers when it claims that 30 million users exist in Windows Live Spaces, which will be shifted to GNU/Linux in another company [1, 2, 3] so that Microsoft can shut down its own service. Based on this post with some statistics, only about 1% of Windows Live Spaces will actually be active, so it’s natural to assume that 99% (or about 29.6 million of those 30 million users which Microsoft claims to have) won’t even bother migrating to another service. Their blogs/splogs will die permanently within months.

Windows Live Spaces’ shutdown may not be a big win for WordPress.com, after all. According to internal e-mail messages obtained by Betanews, Microsoft expects only about 1 percent of Windows Live Spaces bloggers to move to WordPress.com. If not there then where? In the e-mail exchange, one Microsoft executive asserts about the 30 million active Windows Live Spaces blogs: “Most are dead.”

As MinceR put it earlier today, Microsoft is “where projects go to die”. It’s also where blogs come to die. One blog from Windows Live Spaces — and one that we are particularly interested in — belongs to the man behind Microsoft’s highly unethical tactics. He wrote about them in Windows Live Spaces and we covered these back in 2008. Just in case he does not migrate his blog (it’s not maintained anymore based on the amount of comment spam), we are going to keep a copy. To quote him: “To be profitable, the platform must not only dominate its market, but also be defended from cloning. Anti-cloning defenses include patents and rapid evolution. Maintaining the platform’s anti-cloning defense must also be cheap, relative to the platform’s revenue, else the cost of defense will consume the platform’s potential profits.” Well, somebody tell that to fans of Mono. █

Summary: A reality check amid rumours that Microsoft may be interested in Adobe’s assets and more bad news about Vista Phone 7 [sic]

Due to some reports like this one, people have begun to speculate that Microsoft might buy Adobe, which is extremely unlikely for reasons that were brought up in IRC. If Microsoft ever thought about buying Adobe, then it confirms yet again it has an identity crisis (as new internal documents appear to suggest). The article from the New York Times begins as follows:

Steven A. Ballmer, Microsoft’s chief executive, recently showed up with a small entourage of deputies at Adobe’s offices to hold a secret meeting with Adobe’s chief executive, Shantanu Narayen.

The meeting, which lasted more than an hour, covered a number of topics, but one of the main thrusts of the discussion was Apple and its control of the mobile phone market and how the two companies could team up in the battle against Apple. A possible acquisition of Adobe by Microsoft were among the options.

Microsoft has been poaching Adobe employees for a while, it has products that compete directly with Adobe (hello redundancy and antitrust), and it does not have money to buy Adobe. These are just some of the many reasons why an acquisition is not going to happen. Rather than Microsoft growing through stealthy deals it appears as though it may shrink by splitting up, just like it was supposed to after antitrust violations in the 90s. Such a ‘radical’ suggestion came from Goldman Sachs a few days ago and here it is in the news again:

Goldman Sachs, at one time the most respected Wall Street investment bank in the world, is urging Microsoft to shed its Xbox (and the entire entertainment division, actually) branch into its own company, and for Microsoft proper to just focus on the business, operating system and office software stuff.

Goldman Sachs has also expressed dissatisfaction with Microsoft’s next attempt at the mobile market. It was not alone. As IDG puts it:

Windows Phone 7 Buzz Muted by Naysayers

[...]

In fact Microsoft is facing a wall of naysayers leading up this Monday when it will introduce its first batch of Windows Phone 7 phones. Analysts and investors are wary about Windows Phone 7′s prospects. Third-party application developers are giving mixed reviews about the new smartphone platform. And average Joes and Janes are just making wisecracks.

Here’s a look at what people are saying about Microsoft.

Microsoft Downgrade

Market research firm Gartner on Wednesday predicted that Microsoft’s forthcoming Windows Phone 7 will not buoy the company’s sagging mobile handset fortunes. Instead, Gartner predicts, Microsoft’s global market share will drop from 4.7 percent in 2010 to 3.9 percent by 2014, according to Information Week.

Gartner’s prediction follows Goldman Sachs downgrade of Microsoft’s stock on Monday from “buy” to “neutral.” The investment firm dinged Microsoft for its failure to gain “a firmer foothold in the growing migration to mobile devices,” according to Bloomberg.

It’s not hard to see where that criticism comes from. Apple’s iPad, for example, has become the tablet device to beat and inspired a slew of competitors, and this has all happened in less than a year. Microsoft, meanwhile, has been trying to inspire tablet PC adoption for years without much success.

It may not take long for Vista Phone 7 to die and join this list, at which point buyers of such phones will be greeted by messages like this one:

Customers can continue to enjoy the full benefits of MSN Direct, along with service and support, up until that date. Pro-rated refunds for unused portions of existing One-Time Payment and 12 month subscription plans will be automatically credited after January 1, 2012. Customers may cancel service at any point prior to that date and receive a pro-rated refund for any unused portion of their subscription. Microsoft customer support is available to answer any questions about existing subscriptions or refund eligibility at 1-866-658-7032.

Why would Microsoft bury about 40 products only to spend ~15 billion dollars buying Adobe (the company’s market cap is around $14.3 billion at the moment)? Microsoft hardly even makes acquisitions anymore. It just makes no sense. █

Summary: Why Microsoft will not manage to grab yet another Internet giant, not any time soon anyway

CONSOLIDATION sounds like a nice word, but usually it means removal of choice and that’s not necessarily a good thing. Microsoft has already eliminated the second search engine in all sorts of nefarious ways. Microsoft never bought Yahoo! It just achieved a sort of hijack from the inside. The company is now run by many former executives of Microsoft.

Well, one reader from Brazil told us about reports like this one yesterday:

AOL Inc. and several private-equity firms are exploring making an offer to buy Yahoo Inc., according to people familiar with the matter, devising a bold plan to marry two big Internet brands facing steep challenges.

Considering rumours/speculations that turned out to be false regarding Adobe takeover, Nokia takeover, and even AOL [1, 2, 3], it’s probably a case of boy crying “Wolf!”

Microsoft cannot afford to buy anything significant anymore (it would require borrowing more money), so for anything significant to happen here is unlikely unless the takeover is indirect. As Cringely put it:

If you think AOL actually intends to buy Yahoo, you are wrong. That story hit the press this week but it’s a ruse to motivate Google exactly as I explained a few days ago. AOL has neither the money nor the motivation to buy Yahoo, which is analogous to a bus company buying a poorly-managed airline. AOL just wants to make Google jealous.

In other Yahoo! news, it’s harmed by Google’s Instant despite revamp attempts. Is Yahoo! still developing a search engine? Why bother anymore? Won’t Microsoft just devour the whole thing?

To Microsoft, Yahoo! is just a tool now, just like SCO was once a tool. Now it’s just dead:

SCO’s stock is now back up to 7 cents, up from 2 cents or maybe less — I don’t track it closely — and 7 is where it’s been hovering most of the time for the last few months. Do people really make money from these little dips and surges? What a life that must be. That is actually a fraction of a penny higher than the stock sold for on the day SCO filed for bankruptcy. Go figure.

There’s a long list of companies that ended up as corpses outside Microsoft’s lair. Which one will Microsoft exploit next? █

“On the same day that CA blasted SCO, Open Source evangelist Eric Raymond revealed a leaked email from SCO’s strategic consultant Mike Anderer to their management. The email details how, surprise surprise, Microsoft has arranged virtually all of SCO’s financing, hiding behind intermediaries like Baystar Capital.”

–Bruce Perens

Summary: Unverified comments about internal problems at Microsoft, namely lack of activity

AT Techrights we are very references based on the sense that we try to provide a lot of references (preferably new ones) for all claims that are being made. But sometimes information arrives via IRC or word of mouth and that’s just harder to verify/validate, so we clearly make the separation.

Under what can only be classified as “word of mouth” we can say that there’s a class action coming against Microsoft Windows bundling. There’s no reason to assume everyone wants Windows anymore and to force everyone to buy Windows along with hardware is simply unreasonable. GNU/Linux has matured a great deal and people whom I put on a GNU/Linux-based operating system for the first time have zero problems with it. It does everything they expect and it is simple to use without prior experience. Increasingly I hear from people who explore GNU/Linux and migrated entire facilities to it. Even relatives of mine, who I never imagined would explore GNU/Linux, turn out to be using it without making much fuss about it. A lot of my family uses it and my brother, whose friend started working for Microsoft not so long ago, confessed that they hardly do any work there anymore. They just come to work to sit idly and he actually brags about it (which would be problematic had the name been given). Well, this is the type of arrogance that kills companies. It’s Hubris.

“Microsoft Employees Are More Bored Than Ever” says this new report from Business Insider. This one too quotes anonymous Microsoft employees.

Microsoft’s employees are more bored than ever, says the author of Mini-Microsoft, a message board/blog focused on the internal culture of Microsoft.

According to the anonymous author of Mini-Microsoft, “my circle of friends have hit a patch of corporate ennui like never before.”

They die out of boredom and this lies in complete agreement with what I have been hearing from my brother’s friend. He says they just come in, have drinks and chat, and maybe program for just a little while. Nonchalance kills their paymaster and it shows. This type of neglect may also leave angry customers hanging until more lawsuit land on Microsoft’s desk. There are interesting times to come. █

Summary: Muglia’s exit bodes badly for the convicted monopolist and it may have been a sacking based on a person close to Microsoft

YESTERDAY we wrote about the departure of Bob Muglia, which was rather vague and resembled the departures of Bach and Elop in the sense that Ballmer’s statements created uncertainty and led to more speculations than answers. First of all, let it be pointed out that this was another classic case of spinning bad news as wonderful news. Microsoft loves to spin it as “reorg”, as we explained 3 years ago (and provided many examples of thereafter).

“All presidents are leaving Microsoft just months apart from each other, leaving no reasonably-solid succession option for Steve Ballmer.”Microsoft understands that in order for trust from shareholders to be assured, it is better to pretend that nobody ever leaves Microsoft wilfully. Bob Muglia is no exception in that regard and he is just among many at his level who left recently (e.g. Bob Muglia, Robbie Bach, Stephen Elop, and Ray Ozzie). All presidents are leaving Microsoft just months apart from each other, leaving no reasonably-solid succession option for Steve Ballmer. “IMHO,” writes Jan Wildeboer, “Muglia and Ballmer seem to have different opinions about future of Windows Server market. No successor named means a lot IMHO.”

Well, here is some background about Muglia, courtesy of Joab Jackson who currently works for IDG:

Muglia has been with Microsoft for 23 years, leading development efforts in Microsoft Office, Windows NT and online services businesses. As president of STB, he oversaw Microsoft’s development and infrastructure products, including Microsoft Windows Server, SQLServer, Visual Studio and System Center products, among others.

Jackson also gives new signs that Microsoft Dynamics is struggling to stand on its feet (as always). Let’s face it; very few of Microsoft’s products are actually profitable. Some of the latest unprofitable ones can burn money at a pace of billions per year. They cannot rely on the cash cows forever and based on Muglia’s departure, something is not quite right with the division that handles Windows (Office too has had Elop elope). Recently it was confirmed that Microsoft is manipulating its SEC filing, specifically when it comes to fake numbers around Windows (so there is no guarantee that the rest of the report is reliable, either). This wiki page contains a lot more information on the subject.

“Recently it was confirmed that Microsoft is manipulating its SEC filing…”Microsoft’s most prominent boosters are very baffled by the news about Muglia and one of them insinuates that Ballmer actually fired Muglia, which would make it even more bizarre. To quote: “For a CEO, it’s surprisingly blunt to write: “I have decided that now is the time to put new leadership in place.” Vaguer, gentler language is generally used.

“Why the blunt talk? No one seems to know. And why is Muglia being let go when his division has been doing surprisingly well? Again, no one is sure.”

The title is “Why did Microsoft’s Steve Ballmer publicly oust Bob Muglia?” and the only comment at the time of writing rightly says: “What’s more vague than Steve Ballmer’s mail is your take on it, Preston. You haven’t answered your question that makes up the title of your post; but speculatively let the whole thing lie as is; without answers or offering insights or clues.” █

Summary: Rumours that Nokia is selling its mobile unit to Microsoft begin to surface

A senior figure at Nokia was quoted as saying that the Microsoft/Nokia deal “isn’t a deal between Nokia and Microsoft, this is a Microsoft take over.”

Well, with this “takeover” in mind, how about this rumour?

Straight out of the rumor mill, comes news on the possibility that Nokia would be considering selling its mobile unit to Microsoft, and that the meeting to discuss the deal might go down as soon as next week.

While this might turn out to be nothing more than just a big rumor, there is also the possibility that it would pan out, and that Microsoft and Nokia would announce the largest acquisition of all times in the near future.

The news comes from Eldar Murtazin, who has a record of being right about various aspects regarding Nokia’s business, and who claims that Nokia and Microsoft are getting ready to sit at the table and discuss the potential merger during the week of May 23rd.

That would mean patents too. Microsoft already has Skype patents that can help it impede VoIP competitors.

Has Ballmer just 'pulled a Belluzzo? █

Photo from EPO.org

Summary: Rumours suggest that Benoît Battistelli’s affairs at the EPO may have something to do with Wim Van der Eijk’s longterm absence

IT IS widely known by now that, due to (probably legitimate) criticism of Željko Topić, Battistelli (arguably) illegally suspended a judge and attacked the EBoA (among other boards).

“The present VP3,” says this comment, “Mr Van der Eijk, is on unlimited sick leave and thus out of function.”

Well, “unlimited sick leave” at the notorious office which treats sick staff like liars and cheats must really mean something. Remember how the EPO framed the suspension of a judge in order to overcome serious legal issues, or create uncertainty and doubt. It’s like assassinating someone, then calling it an “unfortunate accident”.

To quote some sarcastic comments about this: “Sounds like a bloody malingerer to me. He should be immediately summoned to a medical examination by one of the President’s doctors. And of course subject to strict “house arrest” …”

Another one says: “The President has an interest in keeping VP3 at home as at work he does only damages, i.e. he’s unable to control the chairs and the members who are too independent and do not obey orders.”

Another goes like this: “VP3 has always been a silent subordinate of the President and never had the guts to show disagreement with the mad line imposed upon the staff. Now, under house arrest, he has the time to meditate and understand the true nature if [sic] the President. Too late for coming out!”

Here is an important new comment: “VP3 has been appointed by the Administrative Council under Article 11 EPC and thus subject to the disciplinary authority of the Council – not that of the President. It is not clear whether the President can actually impose “house arrest” on him.

“Apart from that he can only be removed from office as the Chairman of the Enlarged Board of Appeal on a proposal of the Enlarged Board of Appeal (Article 23(1) EPC).”

“Given how Battistelli historically dealt with boards like these, one shouldn’t be hastily accused of making a mountain out of a molehill.”The latest mystery, to put it politely or even just prudently, is why he’s away for so long.

“For your information,” told us a source, “the Vice-President in charge of the EPO Boards of Appeal (known internally as DG3) is on extended sick leave [...] Mr van der Eijk is the Vice-President of DG3 (VP3) and also the Chairman of the Enlarged Board of Appeal.” [Wikipedia says "Wim van der Eijk (born ca. 1957) is a Dutch civil servant, currently Vice-President of the European Patent Office (EPO), head of the Boards of Appeal of the EPO, known as DG3 (Directorate-General, 3, Appeals), and Chairman of the EPO Enlarged Board of Appeal."]

Given how Battistelli historically dealt with boards like these, one shouldn’t be hastily accused of making a mountain out of a molehill. Also remember the gag orders that Control Risks and the I.U. use against staff like Elizabeth Hardon whilst under investigation/interrogation [1, 2]. “The Enlarged Board of Appeal,” as someone explained to us, “is one of the few instances which – at least on paper – enjoys some independence from the EPO President although he seems to have been doing his best to interfere in its workings over the last year or so.

“Internal rumour at the EPO has it that some recent decisions of the Enlarged Board of Appeal have not been to Battistelli’s liking.”

We covered this before. The Enlarged Board of Appeal and other boards have been under bombardment (at times silent) by Battistelli and his ilk.

Our source “can’t say at this point whether there is any connection between these events and the sudden mysterious “indisposition” of VP3. But it definitely looks like there is something fishy going on behind the scenes.”

As we explained about a year ago, the Administrative Council is now in Battistelli’s pocket and largely subservient to him.

“If the Administrative Council was doing its job properly,” told us another source, “they should investigate what exactly is going on. But if past performance is any indicator, they are more likely to stick their heads in the sand at the upcoming quarterly meeting on 14th/15th October.” █

Photo from EPO.org

Summary: Rumours are swirling around Wim Van der Eijk’s absence, suggesting that he too may be a victim of Benoît Battistelli’s iron fist

THE EPO is out of touch and Van der Eijk may be out of work, based on the latest rumours.

“Still it is not clear what are the long term plans as a move would lead to mass resignations from DG3, replacing DG3 with the UPC appears to be impossible without a diplomatic conference?”
      –AnonymousSeveral days ago we wrote about Van der Eijk's unlimited sick leave, which seems likely to have little or nothing to do with sickness (as we explained yesterday). As Chairman of the Enlarged Board of Appeal (EBoA) and DG3 VP, Van der Eijk is probably the only remaining potent threat to Benoît Battistelli because the boards are, in principle, independent from Battistelli’s corruptible EPO (in practice Battistelli just breaks the rules).

Over at IP Kat we are seeing some interesting comments. Among them:

Mr Battistelli’s plan:
Get rid of the present VP 3,
Introduce “his” reform of the Boards of Appeal;
Install there his choice of new VP3.
The new chapter in the EPOsaga: “Taming the boards”
The present VP3, Mr Van der Eijk, is on unlimited sick leave and thus out of function. Nervous breakdown? Most likely.

Another comment says:

According to what I have heard from multiple sources the move of DG3 is not for reasons of independence, but simply retaliation for having angered the top management, mainly by R19/12 and refusal of the enlarged board to agree to the dismissal of the DG3 member under investigation.

Still it is not clear what are the long term plans as a move would lead to mass resignations from DG3, replacing DG3 with the UPC appears to be impossible without a diplomatic conference?

Also quite obviously the german delegation in the AC would be strongly against weakening Munich as Europe’s patent capital, so all those plans might go nowhere as the other delegations will be very reluctant to outvote Germany in that matter.

Perhaps the best possible explanation is this:

1) EPO Enlarged Board tells Chairman: “disobey President when necessary”

The European Patent Office (EPO) Enlarged Board of Appeal (EBA) has issued an interlocutory decision in case R2/14

2) The present VP3, Mr Van der Eijk, is on unlimited sick leave and thus out of function.

who would ever think that there is any connection between 1) and 2)

One can see more context in the threads, but most comments are of no relevance to this. We kindly ask anyone with information to conside contacting us anonymously. We really wish to get to the bottom of this and end the uncertainty.

“The EPO should be a member of the Council of Europe,” Florian Müller wrote today, “but it’s not because it wants free rein to violate human rights.” █

Summary: Some more background information about Elodie Bergot and Gilles Requena, who are married whilst also sharing positions of power at the EPO (and also strong connections/ties with the EPO’s President, Mr. Battistelli); Rumours afloat at the EPO — some with ever-increasing circulation too — are worth noting

THE EPO is not an ordinary institution. It professes professionalism and public service, but it’s hard to take all that at face value. In part one, part two and part three of this series we have shown how Elodie Bergot, who is married to Battistelli’s assistant, got magically promoted. When the staff expressed shock the response from Team Battistelli was that some process which wasn’t even transparent was certain to assure the integrity of this promotion. Readers can make their own judgment and draw conclusions (if any) based on what we showed, but today we provide some more background about Gilles Requena.

“Mr. Requena previously worked under Battistelli when the latter was the Director General of the French National Institute for Intellectual Property (INPI). Mr. Requena joined the EPO in October 2010, a few months after Battistelli had taken up his duties as President of the EPO on the 1^st of July, 2010.”The husband of Ms. Bergot is Mr. Gilles Requena, who is a close assistant of Battistelli. Mr. Requena previously worked under Battistelli when the latter was the Director General of the French National Institute for Intellectual Property (INPI). Mr. Requena joined the EPO in October 2010, a few months after Battistelli had taken up his duties as President of the EPO on the 1^st of July, 2010.

Requena frequently accompanies Battistelli on his globe-trotting expeditions to the Intellectual Property Offices of the member states of the EPO and elsewhere:

Here he can be seen as a member of the Presidential entourage during a “state visit” to Liechtenstein. That’s where the image on the right is cropped from.

The photo on this Web page was taken during a visit to the IPO of the Former Yugoslav Republic of Macedonia. An English version of the accompanying text is available at the same site. This is the source of the image on the left. It’s publicly accessible, hence not a violation of privacy.

When you work for a private company of which you are founder, CEO or whatever, hiring a friend or family may generally be dubious (frowned upon by staff) but not inherently offensive; when you do this in the public sector, however, you have a responsibility to the public (you already enjoy a monopoly), so hiring should be done solely in the interests of the public. That’s why people in such positions are typically referred to as “public servants” — an ordinary and mundane term that Battistelli largely disgraced, especially when the context is the European Patent Office/Organisation.

Rumours

Now we enter rumourville and we ask readers to treat these as mere rumours. “In 2007,” we’ve learned. “Ms. Brimelow disclosed her working conditions when she joined the Office as President (including an approximate calculation of her salary in July 2007). In 2015 Mr. Battistelli disclosed the staff’s working conditions [but] Mr. Battistelli’s own contract still remains a well-guarded secret, known only to Mr. [Jesper] Kongstad and Mr. Archambeau (previously PD HR and now-Vice President at OHIM in Alicante). Evil tongues say that Ms. Bergot recently gave the President a 13% increase.”

The source “can neither confirm nor deny these rumours.” Since there is so much secrecy around it all, it’s not possible either. One can only guess based on hearsay. Battistelli likes to publicly brag about “transparency”, but his contract is perhaps an exclusion, among so many more exclusions. We have already learned that Battistelli was “asked — in vain — for his detailed earnings, including his salary, in an open letter” from SUEPO.

Mr. Requena and Ms. Bergot are not the only people from Battistelli’s ‘extended family’, so to speak. As one recent writing from SUEPO suggests:

Shortly after taking up office, Mr Battistelli put several of his previous co-workers at the French patent office (INPI) on key posts in the Office. A few months ago we flagged that the “inner circle” seemed to be growing, in particular around Elodie Bergot (PD4.3).

Our predictions are materializing. One of Ms Bergot’s personal assistants is Nadja Lefèvre. Ms Lefèvre joined the Office on 15.03.2014 as “Administrator A3” She was soon appointed head of “Administrative Services for Social Dialogue”, i.e. of the 100% staff representatives and secretaries. Next she was appointed head of “Conflict Resolution” a.i. Finally, in June of this year, “Internal Communication” was added to this already impressive work package. Since then a vacancy notice was published for a “Director HR Strategic Support and Change Management”. Only internal candidates may apply. The new Director “will manage a directorate… currently organised in 3 units: Internal Communication, Conflict Resolution Unit and Social Dialogue Administration”. We would be extremely surprised if the successful candidate were anyone other than Ms Lefèvre.

Nadja Lefèvre was mentioned here before, in relation to media spin and controversial interrogations [1, 2].

Minnoyal Double Standards

“Mr. Minnoye,” we’ve learned (the current VP1), “appears not to be amused that (DG1) documents are regularly leaking to the outside world.”

“The EPO likes selective transparency, which means making publicly available only the things that make the EPO look good while deliberately hiding the rest.”Well, when documents serve to prove irregularities it’s called whistleblowing and whistleblowers generally enjoy certain protections. It guards justice and ensures accountability within a self-serving system. The way to ensure that documents don’t regularly leak is to behave properly, in which case the leakers don’t qualify as whistleblowers. Sadly for Mr. Minnoye, there is a lot more to come. Trying to obstruct reporting isn’t a wise idea because the backlash it causes can be an order of magnitude greater than the perceived (and short-term) ‘gain’.

According to the EPO's own documents, accelerated examination for large ‘clients’ was the idea of Battistelli and VP1 (Minnoye). To quote EPO documents: “Both The President and VP1 have expressed the opinion that there needs to be closer contact between examiners and their applicants.”

It has also been alleged that Minnoye was involved in the next wave of propaganda, but we cannot confirm this for sure (no transparency at the EPO).

According to this new comment, “VP1″ (Minnoye) is hypocritical for bemoaning leaks. To quote the commenter: “That wouldn’t by any chance be the same VP1 who was allegedly involved in leaking the “facts” about a confidential internal investigation report to the Dutch press?”

Well, according to a letter from SUEPO: “A week before the Council meeting, Mr Minnoye (VP1), Ms Mittermaier (our new Dir. External Communication) and Mr Osterwalder (EPO press spokesman) apparently met with a journalist of the Financiele Dagblad.”

“To some people, truth itself is a considerable threat.”It’s becoming easy to see why Mr. Minnoye isn’t a big fan of this whole “transparency” thing which the President keeps boasting about. The EPO likes selective transparency, which means making publicly available only the things that make the EPO look good while deliberately hiding the rest.

Attempts to crack Techrights tripled this past week (an all-time high), with nearly a million attempts in just one week. It’s hard to tell who or what is behind it, but it sure limits access to the server as it’s a brute force attack. We do our best to counter this (thankfully, we have the technical skills and experience), but sometimes that is not enough. We remind readers to help protect the right to inform the public, as such rights should never be taken for granted. To some people, truth itself is a considerable threat. █

“We often forget to appreciate something until we lose it. It’s a fact of life. We tend to take a lot of things for granted. We take a lot of people for granted.”

–J. Angelo Racoma

But did Jesper Kongstad actually do it? We need evidence if any exists.

Jesper Kongstad. Photo from the Nordic Patent Institute.

Summary: Comment found online accuses the Administrative Council of pressuring, by threats, Directorate-General 3 to dismiss a judge who is silently accused (with selective ‘leaks’ to the media, reportedly orchestrated by EPO managers) but not even proven guilty

LOOKING at recent comments in IP Kat, where anonymous people sometimes refer to the EPO‘s President Battistelli as “Battishenko” and “Bashar al-Istelli”, we find rather curious allegations in relation to this 'leaked' PDF which shows how Kongstad’s Administrative Counci (AC), masking itself as “EPO”, tried to crush a judge but got denied for having no legal basis. As it turns out, the EPO likes to throw around legally unsound documents, hoping to ‘trick’ people into doing things they needn’t do. If the EPO didn’t have the immunity is so proudly boasts about, it would probably get sued for legal abuse or legal bullying. Recall this case of trademark-trolling too.

“If the EPO didn’t have the immunity is so proudly boasts about, it would probably get sued for legal abuse or legal bullying.”Based on this rather curious comment, “Mr Kongstadt recently paid a visit to DG3 to threaten them in case they fail to obey the order to dismiss the DG3 member” (the judge).

“That is a serious allegation,” responded another person. “Any proof?”

“I would not surprised if this were to be true,” the commenter added. “We have seen more examples Mr. Kongstadt acts as Mr. Battistelli’s sidekick – rather than the AC president who is to ensure Mr. Battistelli is doing his work properly: secret one-on-one deals on remuneration, contacting the EBoA on his own rather than on behalf of the AC.”

If there is truth to this rumour, then we urge people to privately contact us and confirm/deny. There would be serious implications if this turned out to be true.

“If there is truth to this rumour, then we urge people to privately contact us and confirm/deny.”Another comment says: “What the above-mentioned communication from a Board of Appeal actually means is that Part VI of the Convention / Appeals Procedure no longer applies to certain technical fields, with more to follow soon.”

If the judge is dismissed by his/her colleagues, under pressure from the AC/EPO, then what makes these colleagues think they won’t be next in the firing line? We know the identity of the judge and it seems unlikely under these circumstances that these allegations are an objective truth; they’re quite likely ‘sexed up’ (like evidence of Iraq’s WoMD prior to invasion) and maybe dependent on very careful and selective dirt-digging by the ill-intending I.U. (Investigative Unit) 1, 2, 3, 4, 5, 6, 7]. It’s not easy to dismiss someone for talking to colleagues, just as it’s not easy to besiege (or extradite) Julian Assange for merely publishing incriminating documents, handed over anonymously by genuinely concerned whistleblowers.

“What the above-mentioned communication from a Board of Appeal actually means is that Part VI of the Convention / Appeals Procedure no longer applies to certain technical fields, with more to follow soon.”
      –Anonymous“I see two outcomes to this saga,” another commenter writes:

1) At the next AC meeting the suspended DG3 member will have his salary cut again (reduced to 50% after the last AC meeting) with some kind of deal/threat circulated in the background to make sure he takes retirement. Problem solved.

2) The suspended DG3 member will not be renominated (like so many others) when his renomination is due. Problem solved.

“Or not,” said a different commenter. “2 more years of house ban is an harassment!

“It is now official that B. [Battistelli] lied to the AC and defamed the guy and made an unlawful disciplinary measure. The next AC will be surprising!”

“Actually, it is well know within the Office that Mr. Lutz is able to write his signature upside down, so that he can sign whatever the President pushes across the table to him without having to turn it round to read it.”
      –Anonymous jokeThere are many more comments there which are worth seeing. We particularly liked this amusing comment about Vice-President Lutz being like a lapdog of Battistelli. It says: “Actually, it is well know within the Office that Mr. Lutz is able to write his signature upside down, so that he can sign whatever the President pushes across the table to him without having to turn it round to read it.”

Well, the same seemingly applies to Kongstad these days, judging by the leaked PDF.

What will it take to stop Team Battistelli? We believe that information alone can put an end to it. The management of the EPO has far too much to hide, far too much to fear, and it is certainly doing a lot of things wrong. Team Battistelli, along with the I.U., wants to have a monopoly on privacy. These people want to run the EPO like the Stasi ran East Germany just so that, using the über ‘skills’ of bulk collection and mass surveillance^*, they can dig ‘dirt’ and dismiss anyone who ‘dares’ to question Team Battistelli. We need to reverse this disturbing trend and overcome the Stasi by inverting the so-called ‘transparency’. Accountability necessitates access to information — something that any public body should enable by default. All that Battistelli has done about transparency is write a blog post about it. █

“Privacy protects us from abuses by those in power, even if we’re doing nothing wrong at the time of surveillance.”

–Bruce Schneier

____
^* In the UK it has just been made official and perfectly legal for spies and sometimes for police to access people’s complete Web browsing history, so each page ever accessed (even accidentally!) can be framed as ‘evidence’.

Is the EPO weaponising the media?

Summary: Rumour that the EPO spends almost as much as a million US dollars “with some selected press agencies to refurbish the image of the EPO”

LIKE a lot of large organisations out there, the EPO wishes to guard its image and even hires accordingly. Since the EPO is a public body that receives subsidies from taxpayers, it is imperative that the public gets told how this money gets spent.

Months ago we pointed out that the EPO was preparing a propaganda campaign trying to cast/frame staff as "happy" even though everyone we hear from is unhappy and the ‘loyal’ committee is clearly not happy either [1, 2]. For all we know, even EPO management is unhappy right now, but that’s mostly because of the negative press it receives. Recently we have seen some character assassination articles prepared in coordination with EPO management, shamelessly (and with little concrete evidence) framing its opponents as armed Nazis. Later on people like Battistelli send this tripe to various people in high places, as private letters serve to demonstrate. The EPO’s management views this as an information war (as if it has done nothing wrong) and it now distorts the media, turning journalists into PR marionettes and weaponising newspapers with high circulation in Germany, Holland, and sometimes even France (where French EPO managers probably dread negative publicity).

“Recently we have seen some character assassination articles prepared in coordination with EPO management, shamelessly (and with little concrete evidence) framing its opponents as armed Nazis.”Last night we received comments with mere claims (not yet verified) from a regular commenter whose track record has been reasonably good (accurate). The comment says: “Inquire about a contract of over 800.000€ with some selected press agencies to refurbish the image of the EPO after the alllegedly [sic] “damaging campaign by few employees and mad bloggers”. Someone has seen the signed contract passing from desk to desk at the EPO (readers please provide confirmation or evidence). A further misuse of public money.”

A later comment said: “I do not know who was the beneficiary of the contract, only that its purpose was to restore the “damaged” reputation of the EPO by way of favourable press articles and media contributions (Les Echoes is just an example). For a favourable coverage, the simple resignation of BB [Battistelli] would suffice. This would be very cheap for the EPO. I was also told that the EPO might buy an armoured limousine for the safety of President who has already a number of body guards. If true, it would be another useless expenditure of public money.”

“Staff of the EPO has long been concerned about the EPO’s manipulation of the media in its favour.”We welcome any confirmatory evidence people can provide. Staff of the EPO has long been concerned about the EPO’s manipulation of the media in its favour. And at whose expense? The European public whose brightest engineers, biologists, programmers etc. are abused by the EPO?

As a side note, regarding our previous post about why Battistelli equates his opposition to Unitary Patent (UP) opposition, a reader wrote to tell us that the article “was mentioning TR, NO and CH, which did not participate in the UP, and thus helped justified the continued existence of the EPO in its present form.

“To be exhaustive, one should add to that non-EU, non UP, list: IS, AL, FY, SM and RS [Iceland, Albania, FYROM, San Marino and Serbia].

“Extremely few applications are filed from theses countries, and European patents are also seldom validated there.

“And each of these states possess one full vote on the EPO AC, even though these states count for nothing in the European IP system.”

We hope that someone can provide us with some documents to show abuse and waste of public funds, possibly to the tune of €800,000 (to be funneled to the media or given to people who meddle with the media), a la French ‘news’ paper Les Échos [1, 2, 3], which has become Battistelli's mouthpiece, not just a so-called ‘media partner’ (euphemism). █

“A desire to resist oppression is implanted in the nature of man.”

–Tacitus

Battistelli may risk losing his job if he sacks Ms. Hardon, Ms. Weaver and/or Mr. Brumme

Summary: New rumours about Benoît Battistelli’s union-busting efforts, new complaints to the EPO about traffic floods (possibly caused by its censorship Bluecoat appliance), and fresh complaints sent to the Administrative Council

“Now BB [Benoît Battistelli] has allegedly been advised by the AC,” said a comment this morning, “not to fire the suspended staff reps. He does not usually take this sort of advice. However, I wonder whether, in case that BB fires them despite this advice, the AC will prosecute then the charges of institutionalised abuse put before the AC by the staff rep in question.” (some typos corrected)

“I gave the network administrators enough time to respond and preferably take action.”This would certainly be quite a breakthrough given other rumours or speculations we have been hearing after the Administrative Council's sessions (some said that Hardon would be sacked imminently).

Incidentally, yesterday I reported to the EPO’s relevant people (admin_network@epo.org, jbielsa@epo.org, nderuiter@epo.org, wherler@epo.org, and ywoue@epo.org) abuse by its IP addresses (i.e. computers) against my site. I gave the network administrators enough time to respond and preferably take action. Here is what I wrote in the early hours:

Subject: Network abuse

Dear Network Administrators at the EPO,

Please be aware that IP addresses belonging to the EPO have been abusing my site, techrights.org, for a continued length of time, despite techrights.org reportedly being blocked from your network. This week, for instance, 145.64.134.245, has been quite busy hammering on the site and last night I had to ban it for nearly 200 attempts against Varnish in a very short period of time (just over a minute).

I don’t know if you are using a bot to access the site and I don’t know if there is an exclusion to the ban inside the Investigative Unit, which has engaged in some truly atrocious (and possible illegal) union-busting actions as of late.

I ask you politely to stop the offending addresses from effectively staging digital attacks or floods or my site. If I do not hear from any of you by 5 PM CET today, I shall escalate to the suitable European authorities and may pursue even further action.

These floods have been going on for literally months and they are becoming an embarrassment to your institution. I am eager to contact journalists regarding this matter unless this matter comes to a close by the end of the working day.

Kind regards,

Roy

Deadline was reached within more than half a (working) day, but no action was taken, so I ended up escalating. How does one respond to an organisation which is effectively above the law though? Well, perhaps the only way is to speak to those capable of taking action against the EPO. That’s Administrative Council delegates.

I sent the following message to some prominent delegates the same evening:

Subject: Abuses by EPO Against Bloggers

Dear European representative,

I am writing to you with the kindest of intentions, for serious problems arose at the European Patent Office and these affect me personally. For a number of years, as a software professional in the UK, I have been writing critically about the EPO, whereupon EPO simply banned my site (inaccessible to EPO workers), later threatened to sue me (widely reported on in the mass media because they were not even legally capable of suing), and right now IP addresses belonging to the EPO digitally vandalise my site by overwhelming it with automated requests (this has gone on for quite a while). They have, in essence, launched an assault on access to information itself. They actively threaten staff that speaks to the media about abuses and 3 months ago the EPO secretly signed an (almost) $1,000,000 1-year contract with the infamous Washington-based FTI Consulting for reputation laundering in the media. They actively try to prevent the public from finding out about a queue-hopping programme (for selected large corporations that submit patent applications), among many more scandals which serve to deny the illusion of EPO “success” and “growth”.

European delegates are the last resort now, as the EPO enjoys a controversial immunity that emboldens for abuse and disregard for European laws.

After repeated DDOS (distributed denial of service) attacks on my site I implemented some defenses and found that IP addresses belonging to the EPO are among the culprits. I reported this to the EPO, but they are not taking action to stop this. I asked them politely earlier today (message sent to their network administrators and is guaranteed to have been received), but no action has been taken, so I have to conclude this may all be intentional or that low-level staff is simply too afraid to intervene, having seen the extreme actions taken by management when any morsel of dissent/discontent was shown. The EPO has already threatened delegates, politicians, staff representatives, lawyers of staff representatives, and even journalists or bloggers.

I kindly ask you to put restraints on these practices and respond to unlawful behaviour by the EPO, not just directed at EPO staff but also at outsiders. The EPO rapidly became an embarrassment to Europe as a whole and it is consequently jeopardising unity inside the European Union, which I wholeheartedly support.

My sincere regards,

Dr. Roy Schestowitz

We don’t know if the message sent to selected delegates caused some kind of new contact between them and the EPO.

“We don’t know if the message sent to selected delegates caused some kind of new contact between them and the EPO.”To better understand what was likely hammering on our server we asked someone who may be familiar with the insides of the EPO network, whereupon we learned that “all internal EPO users, examiners etc., when they access the Internet, are routed through a PROXY! [...] In the techrights case it can be the case that so many examiners are currently trying to access your page, and that the Bluecoat appliance [believed to be in use] not only blocks the users from accessing techrights but also pings techrights, which causes a lot of traffic to your pages, but does not bring contents to the internal users. So it may be that it is not a DDOS but a side effect of (blocked for the internal users, by Bluecoat) accesses in the internal EPO network to your pages (but each try-access is sending a request to your server).”

Either way, the EPO should get its Bluecoat appliance under control. According to an RSF report (which we cited back in March), “American Company Blue Coat, specialized in online security, is best known for its Internet censorship equipment. This equipment also allows for the supervision of journalists, netizens and their sources. Its censorship devices use Deep Packet Inspection, a technology employed by many western Internet Service Providers to manage network traffic and suppress unwanted connections.”

What does that say about the real ‘enemies’ of EPO management? █

Summary: Allegations that Mr. Battistelli “traveled from Paris to Bordeaux to meet the party (Rothschild) to whom he granted this decision in order to help them to defend their case”

Benoît Battistelli’s EPO scandals are not necessarily his first. In the first, second, third and fourth part of this series (together with the teaser) we delved into Battistelli’s history in France, including his days in INPI and Ecole nationale d’administration. The early parts focused on Christine Lagarde and her close ties to Baroness Philippine de Rothschild, a large player in the French wine industry. The case of “Mouton Rothschild vs. Mouton” is therefore worth (re)visiting today. It’s not some obscure case as a lot has been written about it.

As background, we suggest the following readings.

Press reports – English

• Change the name of your wine, Rothschild’s chateau tells Burgundy wine house
• Mouton Rothschild owner presses Burgundy estate to change name
• Chateau Mouton Rothschild Tells Burgundy Wine Producer to Change its Name

Press reports – French

• Mouton contre Mouton Rothschild
• Ce Mouton ne veut pas se faire tondre par Rothschild
• Le domaine Mouton, de Givry, face au groupe Rothschild
• Quand Mouton Rothschild attaque un Mouton bourguignon
• Vignes : un Bourguignon inquiété par Rothschild
• L’incroyable affaire du Mouton noir des Rothschild dans le vignoble de Givry

There is of course a lot more, but that’s just a sample and a form of background.

“The comment on the French blog site was by a pseudonymous poster called “Mouton Noir” and it relates to an alleged intervention by Battistelli in a trademark dispute being conducted by the Rothschild Group.”We now return to the case of “Mouton Rothschild vs. Mouton” and its relevance to us. For the moment all we have is an allegation that Battistelli in his then role of Director-General of the French National Intellectual Property Office (INPI) made an inappropriate intervention on behalf of Baroness Philippine de Rothschild and Chateau Mouton Rothschild in order to advise them on how best to defend their business interests in the trademark dispute with “Domaine Mouton” (Laurent Mouton).

So far we don’t have any hard evidence to back this up. However, based on the available evidence of connections between Lagarde and Baroness Philippine de Rothschild (covered in previous parts) and the fact that Largarde was Battistelli’s political boss at the time, the allegation seems plausible. In other words, the hypothesis that Largarde could have instructed Battistelli to give advice to Mouton Rothschild to help them out in a trademark dispute doesn’t appear to be completely off-the-wall. But we would like to emphasise that so far we don’t have any ‘smoking gun’ to prove that this actually happened. What we do have are the following comments and some contact/connection details. For readers’ information we will leave some leads to facilitate further investigation, overlapping our own work/investigation.

“It would appear from this that, in his capacity as Director-General of the INPI, Battistelli may have improperly intervened to assist the Rothschild Group in defending its claims to certain disputed trademarks.”We are currently investigating an allegation that Mr. Battistelli may have committed serious misconduct in his capacity as Director-General of the French National Intellectual Property Office (INPI) in a matter concerning the above dispute about trademarks in the French wine industry.

The investigation was triggered by a comment that was posted on the IP Kat site back in October. The IP Kat comment refers back to a comment posted on a French blog site in 2010 in response to a blog entry where a patent applicant was complaining about his treatment by the INPI. The comment on the French blog site was by a pseudonymous poster called “Mouton Noir” and it relates to an alleged intervention by Battistelli in a trademark dispute being conducted by the Rothschild Group.

The original comment in French reads as follows:

Bonjour,

je voulais apporter de l’eau à votre moulin.

Savez-vous que monsieur Benoît Battistelli est un élu UMP à St germain en laye ? Et qu’il est très apprécié de Christine Lagarde ?

Savez-vous aussi qu’étant impartial, quand il y a un recours contre sa décision, il fait le déplacement de Paris jusqu’à Bordeaux pour rencontrer la partie (les Rothschild) à qui il a donné raison et ce afin de l’aider à se défendre…

Toujours étant impartial, il renouvelle sans problème la marque Mouton Noir (des Rothschild) en 2000 et 2010 alors qu’il transmet parallèlement à la Cour la preuve que cette marque est annulée depuis… 1996. (confirmé en 2007 par la Cour de Cassation).

La Cour qui a confirmé en 1998 l’annulation de cette marque arrive pourtant aujourd’hui a reconnaître que cette marque est notoire et elle rejette l’argument selon lequel cette prétendue notoriété est illégale donc inopposable… Conclusion ????

Etonnant non ?

Si ça peut vous aider, vous pouvez toujours me contacter

Écrit par : MOUTON NOIR | 06/12/2010

Rough translation into English (with emphasis):

Hello,

I wanted to add some grist to your mill.

Do you know that Mr. Benoît Battistelli is an elected member of the UMP political party in St Germain en Laye?

And he is very much appreciated by Christine Lagarde?

Do you also know that being impartial, when there was an appeal against his decision, he traveled from Paris to Bordeaux to meet the party (Rothschild) to whom he granted this decision in order to help them to defend their case …

Always being impartial, he renewed the trademark “Mouton Noir” (Rothschild) in 2000 and 2010 without any problem while at the same time passing to the Court evidence that that trademark had been revoked since … 1996 (confirmed by the Court of Cassation in 2007).

The Court which confirmed the revocation of that trademark in 1998 now however decides to recognise that this mark is notorious and it rejects the argument that the claimed notoriety is unlawful and therefore unenforceable. … Conclusion … ????

It’s amazing isn’t it?

If it helps you, you can contact me any time.

Written by: MOUTON NOIR | 06/12/2010

It would appear from this that, in his capacity as Director-General of the INPI, Battistelli may have improperly intervened to assist the Rothschild Group in defending its claims to certain disputed trademarks.

“They submitted a demand for €410,000 in damages plus interest and also requested him to desist from using the family name “Mouton” on his wines.”We researched a bit further and it is reasonable to think that this allegation may indeed relate to the famous “Mouton vs. Mouton” case which got a lot of press coverage in France and was also covered in the UK. (Note: List of press articles in English and French have been prepended above)

The Domain[e] Mouton is a family-run vineyard located in Burgundy and is currently managed by Laurent Mouton who took over from his father Gérard in 2002. In 2013, Laurent Mouton found himself confronted with legal action from the Philipe de Rothschild Group and Rothschild SA. They submitted a demand for €410,000 in damages plus interest and also requested him to desist from using the family name “Mouton” on his wines. According to press reports from 2014, Laurent was defiant and intended to fight his corner.

“Along our efforts to corroborate we did find additional comments about the alleged connection.”We don’t have any more information at the moment, but our investigations are continuing. We ask readers for help in the form of any leads or other information of interest. None of the press reports below mention the alleged Battistelli intervention on behalf of the Rothschild Group, but we are trying to find out if there is any substance to these allegations. We have attempted to find out if Benoît Battistelli ever publicly commented on this, but came out empty-handed. We could not show direct connections between the Philipe de Rothschild Group and Battistelli, either, but maybe other people out there can produce some evidence we’re not aware of.

Along our efforts to corroborate we did find additional comments about the alleged connection. To quote one of them:

“The Dutch judgment was against the European Patent ORGANISATION, not against the Office. As such, Battistelli has no authority to decide what to do about the judgment – the Administrative Council must do that.

Has he once more overstepped the mark, as he did with the DG 3 house ban?”

Well spotted!

And once again someone – this time a Dutch Minister – has moved quickly to cover for him.

The man has friends in high places.

To find out more, if you can read French, Google “INPI et les Faux et usage de Faux”.

Scroll down the page and study the comments by “MOUTON NOIR” to see how well-connected BB is.

Thursday, 26 February 2015 at 10:17:00 GMT

It would be useful to get more than Internet gossip about it. This sounds a lot like the case of Rikard Frgačić and Željko Topić [1, 2, 3, 4], with Lufthansa trademarks being reassigned under highly controversial circumstances (it was still not a closed case the last time we checked and spoke to Frgačić over the phone).

The Benoit Battistelli “Mouton” story, like the Frgačić-Topić-Lufthansa story, misses hard evidence of intervention between the head of the local IP office and the very affluent stakeholder. We look forward to hearing from readers or errant observers. █