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Re: When Companies Control Newspapers

Larry Qualig wrote:
> Rex Ballard wrote:
> > Larry Qualig wrote:
> > > Rex Ballard wrote:
> > > > Roy Schestowitz wrote:
> > > > > HP told WSJ to, 'Go say nice things'

> > > > Remember, I used to work for Dow Jones.  I remember at least one
> > > > incident when Walt Mossberg, the technology columnist, wrote an article
> > > > singing the praises of Solaris, or Linux, or some competitor to
> > > > Microsoft.
> > > >
> > > > Microsoft called one of the owner/executives, told them that since WSJ
> > > > liked Solaris so much, they could let Sun buy all the ad space that
> > > > Microsoft was about to pull.  They not only pulled their own full page
> > > > ads at $250,000 per page, but they also pulled the ads of  several
> > > > OEMs, claiming that they didn't want their logo misused.

> And you worked there as what... a *nix advocate to develop some
> software system for them. Since when do publically traded companies
> share their contracts and financial dealings with software developers?

I was director of an alliance developer program to recruit, train,
support, manage, and coordinate about 25 organizations, along with
about 8 teams within Dow Jones.  The goal was to provide Down Jone news
wire services via a very expensive X.25 feed and have these
organizations distribute the information through low-cost corporate
networks and TCP/IP networks.  This eventually included coordination of
efforts to distribute Dow Jones newsfeed content via public TCP/IP
networks, aka Commercial Internet such as CIX and the "World Wide Web".

> > Do YOU work for a publisher of a major national publication?
> > Do YOU have access to high level executives on a weekly basis?
> > Did YOU have this access from 1993 to 1997?
> > Did YOUR publisher ever publish glowing reports of some Microsoft
> > competitor?

> > I DID.

HR policy at that company is that, they only confirm employment.  I had
people who worked with me, and supervisors I could give as references,
but if you call Dow Jones HR department they can only say "yes, he
worked here from xx to yy".

> > http://www.open4success.org/bio

> > > For starters anyone who's ever dealt with
> > > advertising knows that the scenario you just described is pure fiction.
> > > If Microsoft or any other company were running "full page ads at
> > > $250k/page" they would not be paying for these ads on a daily basis.

$250k/Page, $250k per day.

> > Full page ads, Wall Street Journal, international circulation.  In 1993-4.

Do you have a rate sheet from that period?

> > It may have been more than 1 page, but the $250K/day was definitely a
> > number that sticks in your head.  Especially when the executive is
> > intimating that YOU might be the cause of this loss or similar losses - if you
> > don't keep a "low profile".

> > Really wish Microsoft could generate a reliable archive of the
> > University Microforms service. That's one I'd probably even pay for, if
> > I could access it from a Linux machine.
> It already exists and it's called Lexis-Nexis. Considering how you were
> this high level insider at a publisher you should of heard of them by
> now.

Yes.  I've used Lexis-Nexis, even distributed feeds to them.  One of my
alliance developers had them as a customer.  On the other hand it is a
very expensive service, and charges pay-per-view, especially for such
premium services as the legal archives of court records.  I'm not sure
of current rates, but I remember that it used to be similar to Dow
Jones News Retrieval services rates.  In 1993, NRS was something like
$25/hour, plus $3 per page (roughly 1/2 meg or 25 lines at up to 80
columns per line.

When I worked for DJ, I was encouraged to search the DJ archives.

> > Maybe Google will offer that service instead.
> > > As far as MS pulling the ads of several OEMs... more bullshit. The OEMs
> > > pay for their ads and MS has no authority what-so-ever to pull or
> > > modify any ads that an independent OEM wants to run.
> >
> > Actually, this is not true.  Microsoft has full control of the
> > Microsoft trademark and logos, incuding the Windows logo, and the
> > Microsoft logo and the Butterfly logo.
> They own their logos and trademarks but this does not give them the
> right to "pull" adds that Dell, IBM, Lenovo, Acer, etc are running in
> newspapers and publications. These are two completely different things.

It gives them right to control Quality, and Reputation.

I'll draw out the details from your quote below:
> > Microsoft used the example of "We don't want the Microsoft logo being
> > posted next to a naked hooker in Hustler, appearing as an endorsement
> > for immoral behavior".  This happened so long ago, it's probably also
> > not in those google archives.  Microsoft even made a public
> > announcement of it - probably in 1991 or 1992.  Seems that some major
> > OEMs were putting ads for Windows machines in publications like
> > MacWorld.
> The "Hustler" example is against the contract. See section 3-b in the
> contract. Using their logo next to a naked hooker is damaging to the
> logos image and reputation.

A slippery slope.  It's quite easy to see, from Microsoft's point of
view, that a picture of a fat, happy, naked penguine, almost stuffed
with sardines and herring, and being a representatives of organizations
and communities who have aims contrary to Microsoft's interest, would
actually be MORE damaging to the logos and reputation than having the
Butterfly or Windows logo next to a woman in a bikini, bathing suit, or
skin tight dress.

In addition, Microsoft has publicly argued that having their logo
placed too close in relation to other logos IS damaging to the
Microsoft brand.  They have made similar arguments over the use of the
word "Windows", even though their trademark only covers "Microsoft
Windows".  Given the arguments Microsoft hase raised in the "Lindows"
case, it's quite easy to see that Microsoft considers placement too
close to certain competitors to be MORE offensive than having their
trademarks placed in close proximity to images of scantily clad women.

> Using the logo to advertise Dell Computers in the WSJ is not.

Again, there is nothing specific that controls that "slippery slope".
If a publication is suddenly openly endorsing one Microsoft's biggest
competitors, this could be percieved, by Microsoft, to be as
"offensive" and "damaging to the brand" as if their AD had been placed
on a page opposite an article promoting pedophelia, prostitution, or

Given that the nature of what is "offensive" was pretty much up to Bill
Gates and Steve Ballmer, it's not that hard to see how they might be
horrifed and offended in this manner.

> Therefore MS has no right to take it upon themselves
> to pull adds that OEMs like Dell place in mainstream publications.

No, but they could revoke the license of Dell to use the Windows logo
in their advertizing.  The end result would be ads from Gateway and
Compaq featuring the Windows logo, and ads from Dell with no Windows
logo.  If this were combined with rumors of incompatibility with
Windows, the impact could be devastating.  Something very similar to
this happened with Micrososoft and IBM almost immediately after the
release of Windows 95.  IBM had intended to ship the machines with OS/2
and Windows 3.1 emulation.  Boxes, therefore, did not have the Windows
logo plastered all over them.  Rumors, possibly started by Microsoft,
were that IBM products did not "fully support" Windows 95.  The smear
campaign cost IBM $millions in sales over the first few weeks after the
release of Windows 95.

Ironically, it's possible that IBM only got their Windows 95 license
because Microsoft had included the IBM logo in their "Big Release"
backdrop.  The absense of IBM's logo could have telegraphed a "rift"
and might have led to perceptions of an "OS War".  Microsoft included
the logo on the banner, and faxed the License to IBM - appearantly
within about 15 minutes of raising the curtain.

> I just happen to have a copy of the Logo contract below...
> (a)Microsoft hereby grants to Licensee a worldwide, nonexclusive,
> nontransferable, royalty-free, personal license to use the specific
> Logo listed in Exhibit 3 for Product, solely in conjunction with
> Product that meets the Quality Standards (as set forth in Section
> 4(a)), and in the manner described in the specifications set forth in
> the attached Exhibit 1. Microsoft reserves all rights not expressly
> granted herein.

Notice that this is not a corporate license, but a corporate license.
Historically, courts have limited the terms which can be imposed on
Individuals who usually don't have legal representation when using the
logo.  Corporate licenses (not just Microsofts), are nearly always more
restrictive, more tightly controlled, and more carefully monitored.
Usually, the terms are very carefully negotiated, and specific
exceptions for specific situations need to be requested and granted.

We can go to Section 4 a in a bit, but notice that language is very
It doesn't say "solely in conjunction with THE Product that meets the
Quality Standards...
It says "solely in conjunction with Product that meets..".  This allows
Microsoft to define ALL product in which the product may be used.

> (b)Licensee may sublicense solely to Subsidiaries, use of the Logo in
> relation to Product that meets the Quality Standards,

Big question here, what are the Quality Standards?  Are they specified
Or are they subjective, subject to the whims, tastes, and sensibilities
of Microsoft's top corporate executives?

> and Licensee shall have a continuing obligation during the term of this Logo

This sounds like a stricture on use of competitor Logos even when the
Windows logo IS being used.  For example, if Microsoft considers Linux
to be "not up to Quality Standards", then the OEM can't use the Logo on
a machine that is advertized to run Linux elsewhere.  For example, Dell
couldn't put an Ad using the Linux logo in LinuxWorld, then put an ad
for the exact same hardware, featuring the Windows logo in PC Week.  At
least not without getting confirmation that this is "acceptable" to
Microsoft's top executives, marketing department, and legal department.
 The approval process alone could take weeks, even months.

> Agreement to require Subsidiaries' compliance with the terms and
> conditions of this Logo Agreement.

Put simply, you have to enforce whatever terms Microsoft imposes,
whether you agree with it or not.  And since the terms are not defined,
best to err on the side of being as conservative as possible.

> No other sublicense shall be
> permitted. Licensee and Subsidiaries shall not assign, transfer or
> sublicense this Logo Agreement (or any right granted herein) in any
> manner without prior written consent from Microsoft.

There you have the smoking gun.  If you have permission to put the
Windows Logo on your packaging, or in your master zinc, this doesn't
mean that you can just willy-nilly put that logo on any publication
you'd like.  This would be sublicensing.  The contract explicitly
states in this paragraph, that this sublicense MUST be done ONLY with
prior written consent from Microsoft.

Check with your lawyer on that one.  I could be wrong, but I believe
that Microsoft COULD legally argue for this interpretation in a court
of law, and your would NOT be able to argue for your interpretation
(since Microsoft was the Sole AUTHOR of the agreement).

Notice that in all settlements, all contracts, and all licenses,
Microsoft is the sole author of the documents.  This gives Microsoft
the SOLE argument of interpretation.  The judge may, or may not, agree
with Microsoft, and may or may not agree with the legality.

> (c)This Logo Agreement does not grant by implication, estoppel, or
> otherwise, any license to any Microsoft technology or proprietary
> rights other than use of the Logo permitted pursuant to Section 2(a).

Put simply, you can't use the logo and trademark in any way not
exressly permitted above, and given the subjective interpretations
above, about the only "Safe" use is that you can leave the Windows Logo
sticker on your PC, and even then, only if you don't put Linux on it.

Keep in mind that most Microsoft license agreements are desgined to
have the Licensee be in violation the moment the license is accepted.
This means that Microsoft can revoke the license, at any time, for any
reason, without notice, and without trial.

> (a)Licensee acknowledges Microsoft's sole ownership of the Logo, and
> all associated goodwill, and that Microsoft retains all right, title,
> and interest in and to the Logo. All goodwill arising from use of the
> Logo by Licensee will inure to the sole benefit of Microsoft.

Here's another BIG restriction.  In theory, a Linux advocate couldn't
use the word Microsoft in an an article. I would probably be unable to
even display the Microsoft logo on my "pro Linux" website (which I

> (b)Licensee will not use the Logo in any manner that will diminish or
> otherwise damage Microsoft's goodwill in the Logo.

Here's one you can drive a freight train through.  Simply put, if
you're ad contains the Microsoft logo, then you can't have ANYTHING
that "diminishes Microsoft's goodwill" anywhere in that ad.  Simply
put, if the ad mentions Linux, this would "diminish Microsoft's
goodwill" compared to an ad that made no mention of Linux.

> Licensee will not
> adopt, use, or register any corporate name, trade name, trademark,
> domain name, service mark or certification mark, or other designation
> that violates Microsoft's rights in the Logo.

We have a smoking gun.  In theory, if Dell were to adopt the Linux
trademark or Tux logo, and to start using it in their ads, packaging,
this would diminish Microsoft's goodwill.  As a result, this would
violate Microsoft's rights in the Logo.

Again, this may not be the "client oriented interpretation", but it
could easily be argued as the "Microsoft interpretation", and remember,
they wrote the license, so it's their interpetation that counts.

> (c)Licensee shall take reasonable steps to notify Microsoft of any
> suspected violation of, or challenge to, Microsoft's rights in the
> Logo of which Licensee becomes aware.

Put simply.  Not only can Dell not use the Linux logo and Microsoft
logo together, but if someone ELSE uses the two together, they are
required to tell Microsoft and let THEM decide what to do.

> Microsoft shall have the sole right to, and in its sole discretion
> may control any action concerning the Logo.

This is why, when VA Linux offered OEM built machines with Linux,
Microsoft could let THEM advertize Linux and Windows on the same ad,
but at the same time, Microsoft could revoke the license to the
trademark immediately if Dell, IBM, or HP did the exact same type of

Keep in mind, that it is the very fact that these OEMs don't dare risk
losing the use of the Microsoft logo that makes Microsoft's protection
of that logo, with such extreme measures, completely justified.

If Microsoft didn't enforce the Logo licenses so strictly, preventing
all but the OEMs who were prepared to sell, market, and advertize
machines WITHOUT the Windows logo, from using the Windows logo with the
Linux logo, they would have lost the ability to control the advertizing
of Linux, and would have diminished the value of the Logo to the OEMs.

> (a)All Product distributed in connection with the Logo shall: (i) meet
> the Criteria,

Notice that the criteria is never actually specified.

> (ii) meet or exceed the quality of products distributed
> by Licensee before the Effective Date,

Simply put, unless MICROSOFT sees Linux as an ENHANCMENT to Windows, or
at least the value of their Logo, trademarks, and brands (highly
unlikely), the OEM cannot alter the product in any way, without
Microsoft's prior approval.

> (iii) meet or exceed standards
> of quality and performance generally accepted in the industry,

If this were one of the alternatives, this could be the loophole that
would give the OEMs the ability to argue "the industry considers this
an improvement".  It's amazing how many people will read 3 clauses and
assume that the conjunction is OR instead of AND.

> and

Those Microsoft legal beagles are amazing aren't they.  One little
word, carefully couched in a large and complex sentence, gives
Microsoft every possible advantage, slips past judges and compliance
officers charged with enforcing antitrust rulings, and is never

> (iv) comply with all applicable laws, rules, and regulations (collectively
> the "Quality Standards").

This is really fuzzy.  Another slippery slope.  If Microsoft wants to
sabotage the PC with it's own changes, that is their option.  On the
other hand, if the OEM interferes with these efforts, this would be a
form of sabotage, because it would diminish the value of Microsoft

Keep in mind that the value of a license is almost entirel based on
perception.  IBM often collected several million dollars in "royalties"
for it's mainframe licenses, but this was because IBM also provided
extraordinarly good support.  Often, they would provide a full-time
on-site employee, paid by IBM, and when expert help was needed, would
put the qualified expert on the next plane, and even fly them out in
chartered or fleet planes if necessary.

The problems were few and far between, but when they occurred, downtime
could easily cost millions of dollars.  A pension fund that didn't send
out the checks on time, could be deluged with calls from recipients for
hours at a time, costing hundreds of dollars per check.

This perceived value pricing model was later used by Lotus for 1-2-3.
They argued that, since really good spreadsheets are important in
getting financing and investment capital, this increases the "perceived
value" over competitors such as Visicalc.

Over the last 25 years, the value of a software license or trademark
license has become more a function of perceived value.  Microsoft
enjoys 85% profit margin on licenses which does not include the revenue
generated by support contracts.  The average profit margin in the IT
industry is around 15%.

The courts in several countries have already determined that most of
these profit margins for Microsoft are because of their monopoly
control.  In effect, what Microsoft is doing is using the language of
this agreement to protect that monopoly control.  After all, the value
was based on the monopoly, and actions such as offering Linux on the
same machine could reduce the amount of revenue that could be collected
at some point in the future.

> Licensee shall use the Logo solely in
> connection with Product that meets the Quality Standards.

That pretty much spells it out, doesn't it.  It means that you can't
advertize the machine as being "Linux Ready", because, in Microsoft's
point of view, this would not meet the Quality Standards (would
diminish the value of Microsoft's licenses).

> (b)Licensee shall cooperate with Microsoft to facilitate periodic
> review of Licensee's use of the Logo, and of Licensee's compliance with
> the Quality Standards.

Another little "bear trap".  The licensee must keep detailed records of
the content and placement of every use of the Logo.  Furthermore,
because of 4.a.ii, all other ads could also be reviewed,

The rule of thumb that is relevant for this agreement is that the
Licensee is not allowed to use the Logo to promote a product, and then
do ANYTHING that diminishes the value of that product - to Microsoft.

It's irrelevelant that the OEM might be able to charge a higher price
for the hardware.  Unless the OEM is willing to pay Microsoft more for
the right to use the logo to advertize a machine that run Linux AND
Windows - even if Linux isn't installed by the OEM.

Put simply, unless Microsoft profits, and continues to profit, such
actions would violate the Logo license.

> Licensee shall promptly correct and remedy any
> deficiencies in its use of the Logo and conformance to the Quality
> Standards upon reasonable notice from Microsoft.

This one is interesting.  An OEM makes a public statement or
advertizement that Microsoft feels diminishes the value of their Logo.
Now, Microsoft wants them to "correct and remedy" this.  The horse has
left the barn, and getting it back takes more effort.  Lennovo
announces that the T60p runs Linux, and this has diminished the value
of that PC to Microsoft.

Since no remedy is specified, Microsoft could almost request anything.
A full retraction and denial, a formal policy announcement saying "no
Linux is not supported", and maybe even discontinue the Linux ready
configuration.  Microsoft might even demand a substantial advertizing
compaign with the OEM declaring "loyalty" to reporters, OEMs, and
pundits, to try and eliminate even the appearance of dissent.

Thanks for including the license copy.
It's much easier to make my point when I have actual wording in front
of me to be quoted in my response.

Keep up the good work.

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