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Microsoft's FAT fees add a little more to digicam costs
By Mike Tomkins
(Thursday, December 4, 2003 - 11:51 EST)

An article on premier Geek site Slashdot notes that Redmond, WA-based Microsoft Corp. is to suddenly begin enforcing patents related to the FAT file system.

According to the article, Microsoft is apparently expecting to receive 25 cents per unit up to US$250,000 per manufacturer of solid state media or numerous consumer electronics devices (including digital still and video cameras, electronic photo frames and the suchlike) by cashing in on patents for technology related to FAT (there is no one patent for the filesystem itself).

The patents are mostly getting on for 10 years old, and have never been licensed in this manner before. Microsoft is following in the footsteps of numerous other manufacturers by either creating (or buying patents for) technology and allowing it to become a defacto standard by not enforcing their patents for years. Then, when the standard has been adopted and it would be too difficult for the buying public to drop it and switch to something else, you suddenly begin to charge your "captive audience" for the technology.

There is a certain irony in the fact that all of the patents relate to long filenames - something which we can't remember a digital camera actually using! The problem is that whilst they don't use long filenames, the cameras may well include code that would support them if they're following the standard FAT specification. As for whether cameras could be made using a specification that simply wouldn't allow for the long filenames, hence avoiding paying Microsoft's fees - well, we don't honestly know whether that would cause problems in interoperation with other FAT devices or not.

Certainly, flash manufacturers could avoid paying the fees by simply offering their flash cards for sale unformatted - and we'd not be surprised to seem them do so, in a business where violent price wars have driven profits down to a bare minimum. It wouldn't exactly be difficult for consumers to format the cards in their cameras before using them - in fact, back in the early days of computers as a consumer device you had to do exactly that with floppy disks after purchase (at least, until they began to be preformatted as a matter of convenience).

As for the problem of companies hoping for a field day by mining their patents and charging for things they'd long allowed to remain free - well, only a reform of the outdated patent system would fix anything, and we don't see that happening any time soon. A system that was initially intended to protect the individual from rival businesses stealing their ideas now serves to do little more than prohibit competition.

What we'd like to see (perhaps a naive hope) is a bar on charging for patents if they've been allowed to lie dormant for a specific amount of time - and better still, a way to indicate when applying for a patent that it will never be charged for. This would allow companies to file for patents to ensure that their competitors don't patent the idea themselves and charge them for it - but would also allow the development of standards that are based on patents which would remain free and open to all, permanently. Microsoft might only be charging for specific devices currently, but the fact remains that they could decide tomorrow to quadruple their fees - or simply to wipe out competition by refusing to issue a license to a company that relies on the standard. Had they charged these fees from day one that the patents were issued, it seems likely that we'd be using other file systems today...

Original Source Press Release:

FAT File System Technology and Patent License

Most operating systems store computer files by dividing the file into smaller pieces and storing those pieces in separate clusters of a hard disk, floppy disk, or flash memory card. The FAT file system allows an operating system to keep track of the location and sequence of each piece of a file, and also allows the operating system to identify which clusters are unassigned and available for new files. When a computer user wants to read a file, the FAT file system also reassembles each piece of the file into one unit for viewing.

The first FAT file system was developed by Microsoft in 1976. That system was based on the BASIC programming language and allowed programs and data to be stored on a floppy disk. Since that time, the FAT file system has been improved upon multiple times to take advantage of advances in computer technology, and to further refine and enrich the FAT file system itself.

Today, the FAT File system has become the ubiquitous format used for interchange of media between computers, and, since the advent of inexpensive, removable flash memory, also between digital devices. The FAT file system is now supported by a wide variety of operating systems running on all sizes of computers, from servers to personal digital assistants. In addition, many digital devices such as still and video cameras, audio recorders, video game systems, scanners, and printers make use of FAT file system technology.

Microsoft is offering to license its FAT file system specification and associated intellectual property. With this license, other companies have the opportunity to standardize the FAT file system implementation in their products, and to improve file system compatibility across a range of computing and consumer electronics devices.

If you are interested in obtaining a license, please contact our Intellectual Property and Licensing Group at [email protected] for more information.

Pricing and Licensing
Microsoft offers a commercially reasonable, nonexclusive license so that other companies can use the FAT file system in their own products. Currently, Microsoft offers two specific types of licenses:

A license for removable solid state media manufacturers to preformat the media, such as compact flash memory cards, to the Microsoft FAT file system format, and to preload data onto such preformatted media using the Microsoft FAT file system format. Pricing for this license is US$0.25 per unit with a cap on total royalties of $250,000 per manufacturer.
A license for manufacturers of certain consumer electronics devices. Pricing for this license is US$0.25 per unit for each of the following types of devices that use removable solid state media to store data: portable digital still cameras; portable digital video cameras; portable digital still/video cameras; portable digital audio players; portable digital video players; portable digital audio/video players; multifunction printers; electronic photo frames; electronic musical instruments; and standard televisions. Pricing for this license is US$0.25 per unit with a cap on total royalties of $250,000 per licensee. Pricing for other device types can be negotiated with Microsoft.
Microsoft's FAT file system license offers limited rights to issued and pending Microsoft patents on FAT file system technology, as well as rights to implement the Microsoft FAT file system specification. In order to ensure interoperability between the licensed media and devices and Microsoft® Windows®-based personal computers and to improve consumer experience, the license requires that licensees' FAT file system implementations in the licensed media and devices be fully compliant with certain required portions of the Microsoft FAT file system specification. To help licensees implement the FAT file system, Microsoft will also provide certain reference source code and test specifications as part of the licensing package in both licenses.

In some cases, companies may wish to negotiate broader or narrower rights than the standard Microsoft license for FAT file systems. In this case, pricing may vary. Microsoft remains flexible to adjust terms to reflect crosslicensing, unit volume, version limitation, geographic scope, and other considerations.

FAT File System-Related Patents
The FAT file system licensing program includes rights to a number of U.S. Patents, including:

U.S. Patent #5,579,517
U.S. Patent #5,745,902
U.S. Patent #5,758,352
U.S. Patent #6,286,013
In addition, the FAT file system licensing package includes rights to FAT file system innovations for which Microsoft has filed a claim for a patent that the U.S. Patent Office has not yet granted. This licensing program also provides licensees rights to Microsoft FAT file system issued and pending patents outside the United States, and to the Microsoft FAT file system specification and certain test specifications.

This document describes the FAT file system specification and intellectual property licensing program as of December, 2003. Microsoft reserves the right to make modifications to the terms and conditions of this licensing program at any time. The licenses presented here do not provide rights beyond those explicitly stated above, including rights to other Microsoft patents, technical know-how or other forms of intellectual property.

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