Recent Lawsuits Target Vista and VOIP
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What week goes by without some lawyer pounding on Microsoft's doors looking for moolah? Recent lawsuits attack Vista marketing and Microsoft's use of voice over IP technology. |
There's nothing like a billion-buck verdict to draw out a few more lawsuits. In late February, a jury awarded Alcatel-Lucent $1.52 billion in a patent dispute with Microsoft. About a week preceding the verdict, Microsoft settled a troublesome Iowa consumer class-action lawsuit. My, my, what a coincidence. One new lawsuit is about patents and the other about consumers.
The older of the lawsuits is a VOIP (voice over IP) patent dispute between LSI and Microsoft. Yesterday, LSI completed the acquisition of Agere, which filed the lawsuit in mid-March. Details have emerged trickle-like, possibly because of the merger.
The lawsuit alleges that Microsoft obtained proprietary Agere information during 2002-2003 acquisition talks and used it to develop VOIP products.
Microsoft spokesperson Jack Evans said it "would be premature to comment," because Microsoft hasn't been served papers yet.
The consumer lawsuit is more perplexing because it's about marketing practices and consumer confusion. I'm not stunned someone sued Microsoft, regardless of any case's merits.
The lawsuit, which was filed in Seattle on Friday, alleges that Microsoft engaged in "deceptive and unfair conduct in marketing and selling its new operating system, which it calls 'Vista.'"
The bigbut not onlyproblem identified by the lawsuit: "Windows Vista Capable" stickers. Microsoft launched the sticker program in March 2006, a few weeks after announcing that Vista wouldn't ship in time for the holidays. OEMs placed the capable stickers on new machines.
Back then, working as an analyst, my blog offered lots of advice to Microsoft and OEMsand I had plenty to say on this program, warning that capable "shouldn't be confused with being Windows Vista ready."
Capable meant the PC could run Windows Vista Home Basic, which is a grossly defeatured version of the operating system that has features that fall below Windows XP Home. I considered the features to be so inferior to other Vista versions, I strongly encouraged Microsoft not to associate its premium brand with Basic. I recommended calling the software Windows Basic, which is the name by which I refer to it.
To get a Windows Vista Capable sticker, PCs had to meet these Microsoft guidelines: A modern processor (which was never really explained), 512MB system memory and a graphics processor capable of supporting DirectX 9. But a computer meeting those system requirements couldn't run all Windows Vista capabilities.
Evans asserted that Microsoft had done enough to inform consumers about the meaning and limits of capable.
"Microsoft conducted a broad effort to educate computer manufacturers, retailers and consumers about the hardware requirements to run different versions of Windows Vista," he said.
Yes and no, I say, because Microsoft introduced new Windows versions with Vista, which also scales back some features based on PC hardware.
Quoting from my March 31, 2006 blog post: "I strongly encourage Microsoft partners to be careful in their Windows Vista marketing and messaging, because capable doesn't really mean ready. Customers shouldn't walk out of a store with a $399 PC and expect it to someday run Windows Vista Ultimate because of the 'capable' sticker."
Again, Evans asserts that Microsoft did enough.
"This well-documented effort occurred as part of the Windows Vista Capable program, which provided valuable information to consumers seeking to purchase PCs before Windows Vista was released to the general public in January 2007," he said. "We look forward to presenting this information to the court and addressing all other issues raised in this lawsuit."
The lawsuit takes a different position: "Microsoft engaged in a bait and switchassuring customers they were purchasing 'Vista Capable' machines when, in fact, they could only obtain a stripped-down operating system lacking the functionality and features that Microsoft advertised as 'Vista.'"
In May 2006, Microsoft stirred the pot of confusion by introducing a second sticker program: Windows Vista Ready. PCs with this sticker would be, ah, capable of running the Premium or Ultimate versions.
The Oxford American Dictionary definition of "capable": "Having the ability, fitness or quality necessary to do or achieve a specified thing." Dictionary definition of "ready": "In a suitable state for an activity, action or situation; fully prepared." The definitions don't seem that different to me, nor are the connotations associated with the words.
I'm no lawyer, and I certainly would not take a legal position. I find the lawsuits "bait-and-switch" characterization to be pretty strong. On the other hand, Microsoft's Vista marketing could have been a whole lot clearer.
By the holidays, most OEMs sold PC that were, ah, capable of running Windows Vista Premium or Ultimate. But at least through the end of back-to-school buying season, many lower-cost PCs only had the muster for Windows Basic.


Comments (12)
"The definitions don't seem that different to me, nor are the connotations associated with the words."
Right Joe. Like if we're in court and I say you were ready to kill someone vs just capable of doing so. Pretty much the same, huh? LOL. I notice how in this entire piece you don't make even a single reference to the various tables that MSFT published that listed explicitly what you got and what you didn't get by version? I guess you were too busy saying "I told you so". Tell me, when you bought your last car, were you surprised that the sedan model didn't come with all the extras of the GL model? Did you sue the car manufacturer for not making the differences sufficiently clear?
Posted by Paul | April 3, 2007 9:16 PM
Paul wrote: "I notice how in this entire piece you don't make even a single reference to the various tables that MSFT published that listed explicitly what you got and what you didn't get by version?"
Paul,
Those tables certainly weren't in any stores I visited last March or April. Are you saying that you saw in stores clear explanation that Vista Capable meant Basic and probably nothing else? Even in May, when Vista Ready started, there wasn't clear in-store definition of the difference between capable and ready, in part because Microsoft hadn't really started Vista consumer marketing yet.
The problem with the capable program isn't Microsoft trying to mislead consumers; that's not what happened here. Microsoft already had that capable program ready before the Vista delay announcement with the expectation the operating system would RTM in later summer, like Windows XP. The delay derailed all the marketing that would have supported the capable and ready programs.
Microsoft was caught between a rock and hard place. Vista marketing should have started a few months after the capable program was announced in preparation for holiday PC sales. Vista's delay meant Microsoft had to push back consumer marketing for at least another six months or risk spoiling holiday PC sales.
You misunderstand if you assume my attitude is "I told you so." On the contrary, I appreciate Microsoft's difficult situation but also I can't overlook that many people gave good advice that, if acted upon, could have prevented a lawsuit like this one.
Joe
Posted by Joe | April 3, 2007 10:18 PM
"Are you saying that you saw in stores clear explanation that Vista Capable meant Basic and probably nothing else?"
I'm saying that you had to have been living under a rock if by that point you hadn't seen or read that capable meant Basic unless you upgraded. WRT in store, how far do you want to take that "logic"? I didn't see clear explanation that plugging the power cord of my printer into an electrical outlet and sucking on it could electrocute me. Should I sue HP? Entry-level PCs didn't warn me they wouldn't make screamer Photoshop servers or gaming platforms. Should I sue Acer? Widscreen LCDs didn't provide clear explanation that I needed to go to at least 22" to ensure a picture as tall as a standard 19". Should I sue Samsung? MACs didn't provide clear explanation that they couldn't run Windows software unless I purchased additional s/w. Should I sue Apple?
WRT whether the advice from you and others could have prevented this, that's purely speculative on your part. For all we know the plaintiff is a flake and would have filed suit regardless. The issue is whether MSFT took reasonable measures to ensure that consumers could figure out the differences. IMO they did, but that doesn't make it perfect (as it's not for the other cases mentioned), nor does it protect the clueless from themselves.
Posted by Paul | April 4, 2007 2:19 AM
Paul said: "I'm saying that you had to have been living under a rock if by that point you hadn't seen or read that capable meant Basic unless you upgraded."
I disagree with that. We're all computer professionals, and so we're well aware of the differences because, true, we were surrounded by the information. But the average consumer who walks into Best Buy or Wal-Mart and says, "I wanna buy a computer!" isn't going to have nearly the information we have. They saw the ads on TV and walked into the store to get one. The sales person says, "You'll be able to install Vista." The sticker says "Vista Capable." The consumer may well *not* know the difference. Certainly people should be responsible to make intelligent buying decisions, but if these people aren't totally computer savvy, how would they know to even ask, "Are there different versions of Vista that I should be aware of?" and then go to pcmag.com and read about the differences?
However, that said, my personal suspicion is that the big thing people are upset about is they want to see the 3D windows floating around on their screens like they saw on the TV ad, and were upset that it didn't happen. That's just my guess though and I could be wrong.
Posted by Jeff | April 4, 2007 12:35 PM
The 'Vista Capable' sticker is deceptive, since how would people even know about Vista Basic vs. Ultimate if there is no in-store reference to such versions? It is Microsoft's resposibility to inform consumers of limitations before selling the product. They could have made a more informative sticker that read 'Windows Vista Basic Capable", while another read "Windows Vista Ultimate Capable", etc.
Of course, there would be no need for so many different Vista versions if the OS code was properly written and allowed all functions to be run on entry-level PC's.
Posted by EL | April 4, 2007 12:38 PM
I just thought of another comparison. This isn't like buying a sedan and then being angry it didn't come with all the advanced features of the higher-end model. Rather, this is like the manufacturer saying, "This car is capable of getting 50 miles per gallon" but without including the fine print that says, "...when driving in a flat area with no hills; otherwise you'll get 30 miles per gallon".
Or here's one: I buy a car that comes with satellite radio. I get home and when I sign up for the service I find the radio is only capable of playing the David Lee Roth show and nothing else.
If Microsoft had simply been a little more clear on what exactly "Vista Capable" meant, they wouldn't be in this mess.
Posted by Jeff | April 4, 2007 12:52 PM
Here is a Vista related news item, from an April 4, 2007 Best Buy press release:
"Contributing to the results was the launch of Microsoft's Vista operating system, which accompanied double-digit comparable store sales increases for notebook computers and computer services."
http://phx.corporate-ir.net/phoenix.zhtml?c=83192&p=IROL-SingleRelease&t=Regular&id=981657&
Posted by TomT | April 4, 2007 1:05 PM
This provides yet mor evidence that we need to stuff all software and business method patents in the wastebasket. That's why countries other than the United States never found these accpetable.
Posted by Roy Schestowitz | April 4, 2007 5:13 PM
Sounds like you called it, Joe. While I certainly see the Vista lawsuit as frivolous, I can understand the confusion. However, it is reasonable to expect a consumer to research a product before purchasing it, especially one that is of a technical nature. There are certainly return policies in place for unsatisfied customers who did not do their due dilligence.
Posted by Spencer Ferguson | April 5, 2007 12:05 AM
I generally agree with Paul, as I think Joe's doesn't recognize the differences in the definitions of capable and ready. I think the words and definitions are perfectly simple and clear cut. It's a simplistic response to a complex technical marketing problem, but I read "Windows Vista capable" on a computer in Best Buy, and read, "this is capable in the most basic way of running Windows Vista," Given that they specifically mentioned 'capable,' I felt that it may not even do it's job at a respectable speed, but could do it with a little more effort, like more RAM which is constistent with their previous operating system updates. The 'ready' means "it's go time," as it does in the HDTV world, this means it just needs the software (or signal). It's all se?man?tics, but I think their legal has it right.
I'm very interested in seeing how the vonage vs Verizon VOIP patent dispute turns out, and I'm clueless about the LSI (Agere) vs Microsoft case.
In KSR International v. Teleflex, the supreme court just decided that the lower courts must be more open in considering whether inventions are "obvious", and thus, not deserving of patent protection. It seems that this interpretation will lead to widespread patent retractions, which will make it much easier for Microsoft to "borrow" ideas from other companies.
Posted by hoo | May 3, 2007 3:54 PM
I have purchased a HP very pricey with a high def TV monitor...thinking I would be able to do TV on this PC and found out I needed to buy lots more of their produces for that to happen. Comp USA could not wait until I got it out of the door with it. HP said to call Microsoft and guess what Microsoft said to bad so sad. I have since purchased 2 computers for what I paid for that pile of garbage and now I have a paper weight...Where can I sign for the lawsuit??
Posted by MissDummy! And will never buy Hp again! | October 25, 2007 11:48 PM
Once again, a super large, monopoly-like entity sought to please financial the financial greed of it's shareholders, of which many are Microsoft employees.
With the ending of sales of XP, consumers are being forced to purchase XP machines now or face the kludgy and buggy Vista. This will increase their bottom line either way as end-users are forced to purchase.
Vista is not capable of itself, nor is it ready. Current hardware runs this Vista operating system slower than XP on a PII with 256MB of RAM and a 32MB video card.
When I buy a new OS at a ridiculously overpriced five-level pricing scheme, I expect it to run faster than the OS I am leaving behind, better features and a generally better experience.
Vista? NOT!
Slower than XP, impossible to get working quickly for a customer, and inane settings that cause all sorts of crashes, disappearing drivers, inability to unlock folders in an emergency when the system crashes a profile...I could go on, but we all know the truth.
Posted by PCASSIST | April 17, 2008 7:27 PM