One last thing…
The news that there’s a major lawsuit between industry titans Adobe and Dolby is raising eyebrows around the world. Now before I go any further, let me be crystal clear. I am not an IP lawyer. I am simply a customer of both companies. I have, over the years, been fortunate enough to know a number of senior people in both firms, including the honour of meeting Ray Dolby a half-lifetime ago. I think both companies do great work in their various areas. And both of them have frustrated and annoyed me in almost equal measures. So I have absolutely no axe to grind with either of them and I certainly am not taking sides. The court papers, which you can digest at
pcpro.link/299jon, make fascinating reading. “Dolby’s licence agreements generally provide its partners with the opportunity to self-report their sales of products containing Dolby technology. In order to verify the accuracy of a licensee’s reporting of sales and compliance with its other contractual obligations, however, Dolby has broad rights under its license agreements to inspect its licensees’ books and records through a third-party audit… In its more than 50-year history, Dolby has rarely been required to pursue legal enforcement of its licence agreements, and only as a last resort.”
It goes on to say: “When Dolby sought to exercise its right to audit Adobe’s books and records to ensure proper reporting and payment, Adobe refused to engage in even basic auditing and information sharing practices; practices that Adobe itself had demanded of its own licensees. Adobe apparently determined that it was better to spend years withholding this information from Dolby than to allow Dolby to understand the full scope of Adobe’s contractual breaches. Yet the limited information that Dolby has reviewed to date demonstrates that Adobe included Dolby technologies in numerous Adobe software products and collections of products, but refused to report each sale or pay the agreed-upon royalties owed to Dolby.”
What appears to be behind this is that Dolby and Adobe signed a licensing agreement, based essentially on the old-fashioned boxed-copy units of software sold. This was fine until bundling came along, and especially the licensing of software across the internet, both
as a sale and as a monthly rental licence. Whether Dolby has been lax at keeping on top of this definition shift, or whether Adobe has been underhand in its definition of what constitutes a sale, is something that the lawyers representing both sides will find very profitable to discuss in court.
It does open up a can of worms, though. Adobe has been contacting customers telling them that older versions of products that they’re using are now no longer legal for use, and that they have to move to more recent versions. For example, one letter circulating on the web states: “We have recently discontinued certain older versions of Creative Cloud applications and as a result, under the terms of our agreement, you are no longer licensed to use them.”
This, of course, is the downside of the grey area of licensing: you don’t own the right to use the product, and that right can be withdrawn. It is claimed by various commentators that this is linked to the Dolby case, possibly because Adobe wants to limit its potential infringement. However, as I said before, I am not a lawyer. Software licensing is a horrible mess. My friend Wes Miller of the excellent Directions On Microsoft (@ getwired and directionsonmicrosoft.com) is a world expert on Microsoft licensing. Corporates send teams to his training bootcamps to try to understand how Redmond’s licensing works. If you naively think it’s simple and straightforward, I admire your optimism. I listen with wide-eyed horror to the tales that he can tell of organisations where Microsoft has sent in its licensing SWAT teams, and large invoices have been raised in favour of Redmond. Even CERN has had an audit, and apparently Microsoft has rescinded CERN’s academic designation. This has resulted in a new licensing cost that is some tenfold higher than before. Not surprisingly, CERN has instituted a programme called Microsoft Alternatives (MAlt) to look at how it can transition off Office and Windows, and jettison Redmond from its IT infrastructure.
Clarity around licensing isn’t optional, not in 2019. Abusing your customers never ends nicely, and there’s much evidence to suggest that many companies that aren’t compliant are simply in that position due to the deliberate obfuscation and fogginess of the various licensing processes from the big companies. It is, of course, somewhat amusing to see one of the biggest getting spanked by another for once. I look forward to watching the progress of Adobe versus Dolby. Is it too late to train to be a massively overpaid lawyer?
It is, of course, somewhat amusing to see one of the biggest getting spanked by another for once