Microsoft apology for code theft may not do, Plurk says

http://www.thestandard.com/news/2009/12/16/microsoft-apology-code-theft-may-not-do-plurk-says

by ilamont • 17 years ago

28 39 17 years ago

wglb• 17 years ago

It wouldn't totally astonish me if MS eventually settled, perhaps sooner rather than later. The fact that they gave a flat out blunt apology (as opposed to a non-apology apology: "we are sorry you feel that way") shows that they understand the seriousness of the error, and own up to it, even though the contractor did the deed.

GiraffeNecktie• 17 years ago

From a legal perspective, I'm not sure that it matters whether the work was done by a contractor or employee. Whoever asked for the work to be done and paid for it is ultimately responsible for ensuring that it was done within the law. Certainly MS would be able to turn around and sue the contractor, but that's a separate issue.

thaumaturgy3• 17 years ago

Plurk's gonna burn a lot of sympathy if they do, and it may not even be a tactically sound decision.

The situation was handled swiftly and correctly by Microsoft. It got Plurk some free press. It wasn't even caused by Microsoft directly, but by a contractor they had hired. And, best of all, although ordinarily you might be able to allege that it cost you sales ... this all happened in a market in which Plurk has been denied access anyway.

This isn't David and Goliath anymore. Plurk was fortunate to get a swift response from Microsoft in their favor; if their next move is to start a fight with Microsoft, I fully expect that Microsoft's expert, well-paid legal team will chew them up and spit them out.

I'd much rather see Plurk issue a press release stating simply the matter has been resolved and they appreciate Microsoft's swift action.

lionhearted• 17 years ago

> I'd much rather see Plurk issue a press release stating simply the matter has been resolved and they appreciate Microsoft's swift action.

Agree with everything except this last sentence. I reckon they could get a bigger win out of this. Maybe a partnership (I heard they're censored from mainland China, no?), some sort of licensing, or even a token settlement of a little bit of cash so that "Microsoft settled for an undisclosed amount." Going to war with someone who doesn't want it and apologized is a bad play, but they should at least see if they can get a little further with this. Since the China market is blocked to them, this could be a massive win if they get some sort of joint venture, partnership, or licensing going.

thaumaturgy3• 17 years ago

I doubt it. A company the size of Microsoft keeps a lot of attorneys on salary, and others on retainer. If Plurk pursues a lawsuit, then the smart thing for Microsoft would be to simply drive Plurk out of business in the courtroom, and then either buy them for nickels on the dollar, or release the product anyway as Plurk disintegrates.

If Plurk is hoping for a Microsoft-funded exit, this is probably not the way to go about it.

etravers• 17 years ago

I don't know anyone at Plurk, but from here it looks like a bit of posturing to see if they can elicit some sort of swift settlement from MSFT. They got a fast response from MSFT on the original claim. Maybe they want to see if momentum is on their side. Either way, an appology was made and the code was removed. IMO they should focus on moving forward and not waste time and energy chasing rainbows.

lurch_mojoff2• 17 years ago

So Plurk should roll over and forget anything happened just because Microsoft said they are very sorry? You see such benevolence from big corporations in the same situation almost never. Why should Plurk do any differently?

As for Microsoft's swift reaction, it was not necessarily a result of Microsoft's kindness of hart and honest remorse. It probably is more of an attempt on Microsoft's part to not get themselves into a deeper hole than they already are in. And no mater how expert or well paid their lawyers are it won't change the fact that they are in the wrong here. There is very little chance Plurk will end up being chewed up and spat out.

And lastly, this is big business, not preschool - the excuse "but a contractor did it, it's not my fault" doesn't work. Microsoft are (one of) the legal entity (-ies) behind that service. They are ultimately responsible for things like this copyright violation. They are free to seek compensation for the damages from the contractor, but legally speaking (well, not really, I'm not a lawyer and this is not legal advice, but still), as far as Plurk are concerned Microsoft are the offender. And don't feel bad about Microsoft, there is a good chance they'll end up with a net positive, at least financially.

mbreese2• 17 years ago

Exactly. By doing the right thing, Microsoft didn't erase their liability in this. What they did do though was limit that liability and stop them from getting deeper in a hole.

By acting quickly, they gained some important PR points, but that doesn't erase the offense. This is especially true since they admitted their offense. My guess is that all is left is to negotiate the level of compensation.

cturner• 17 years ago

    So Plurk should roll over and forget anything happened
    just because Microsoft said they are very sorry?

That's exactly it.

    You see such benevolence from big corporations in the
    same situation almost never. Why should Plurk do any
    differently?

What other people do is irrelevant. I suppose it could be something if you were talking about a patent troll, but you're talking about Microsoft.

Microsoft focuses on building software that corners markets. That's a legitimate mode of operation for a company.

MS did the right thing in their response to this issue. Plurk has suffered no damage, and indeed has won press. Plurk should now also do the right thing and get on with trying to build software, and avoid the martydom track.

    And lastly, this is big business, not preschool - the
    excuse "but a contractor did it, it's not my fault"
    doesn't work.

But that's not what they said. They accepted responsibility for it.

It's also not in their Plurk's interest to go legal as it will be a distraction from building software.

thaumaturgy3• 17 years ago

There are three different approaches to evaluating whether or not Plurk should go ahead with a lawsuit.

There's the ethical approach: is this a matter which, ethically, is worth pursuing? In this case, we might answer by examining the nature and amount of harm done, and the intentions of the parties involved. The harm was limited by unusually quick action, and by the fact that it occurred in a market in which Plurk had no influence or prospective customers to begin with. Microsoft has given a plausible statement denying any intention on its part. Comments suggesting that a lawsuit should be pursued simply because that's the action expected from Microsoft in the case of a role reversal belie a prejudice against Microsoft which doesn't provide a strong ethical basis for a lawsuit.

There's the approach from law: Plurk must demonstrate which laws were violated, in which country, and to what extent. Has Plurk taken any actions to protect its intellectual property prior to this case? Does it hold any patents? Has it copyrighted its publicly readable code or released it under a license? And, if indeed there is a law which has been violated, to what extent would the damages be assessed? If Plurk can't point to some clear loss of revenue from the event, then they must establish an intrinsic value for their intellectual property. From a legal standpoint, that can be difficult.

Finally, there's the approach from likely outcome: statements like, "And no mater how expert or well paid their lawyers are it won't change the fact that they are in the wrong here" belie an extreme naivete in terms of the law and legal proceedings. Legal battles between companies are less often resolved by establishing the "rightness" and "wrongness" of the parties; more often, they are resolved in terms of resources: the company with the most resources wins.

"Hackers" have a peculiar tendency to believe that their expertise in generalized systems means that they can dive into a legal battle and understand the arena well enough to have an outcome in their favor. The term "IANAL" is almost always followed by a layman's legal advice. However, legal proceedings have little to do with programming. Microsoft's legal team for example could simply choose to bury Plurk in onerous discovery, and it would cost Plurk far too much money to even enter the courtroom, while costing Microsoft relatively nothing.

I don't see a winning scenario for Plurk from any of those standpoints.

raganwald• 17 years ago

IT may or may not be in Plurk's best interests to litigate. Not my call. But I believe it is in everyone's best interests for Microsoft to have negative consequences.

The reason I advance is that we don't want large companies taking the following line of thought: "Instead of buying a smaller competitor or replicating their functionality from scratch in a clean room, let's just use an arms-length contractor to rip them off directly. If we get caught, we'll just apologise and settle quietly..."

I believe it is in everyone's best interests that companies be strongly discouraged from this kind of theft, to the point where they will be insanely scrupulous about code developed both in house and at arm's length.

The contrition after the fact certainly should limit further negative consequences, but does nothing to erase the initial crime.

anigbrowl• 17 years ago

I agree. The optimal outcome would be for MS to license Plurk's code. Failing that, some kind of cash settlement...but a lawsuit would be stupid, both strategically and from a publicity standpoint. Plurk can't afford and probably doesn't want to spend years in court.

awa• 17 years ago

Totally agree with you here. Microsoft acted swiftly and aplogized. If plurk's try to litigate here, it would lose major points with me and hopefully with others also. They should be happy that they got some attention and should let their code/business do the rest of the talking instead of the legal team.

robk• 17 years ago

Microsoft was caught red-handed stealing and blames a contractor. A company is responsible for its contractors and bears legal liability in most jurisdictions for their actions. While it was good of them to apologize and pull it down immediately, Plurk is right to pursue Microsoft further if they so choose.

If, say, your kid gets caught stealing a car and say "oops, sorry" then walks away, that doesn't make everything ok.

Estragon2• 17 years ago

  A company is responsible for its contractors and bears 
  legal liability in most jurisdictions for their actions.

I wasn't aware of this, and it doesn't make much sense to me. Can you point me to some example statutes?

sfk2• 17 years ago

I think this is common sense. If X ships a device with exploding batteries manufactured by Y, X is sued by the end customer, not Y.

mbreese2• 17 years ago

Work done by a subcontractor is (in most circumstances) considered work-for-hire. So the main company owns the product of that work (in this case code). If the main company decides to publish this work as their own, they take on all the liabilities associated with that action. It is up to Microsoft to police itself and it's contractors. If it doesn't, that then opens them up to legal liability. The fact that they took care of the problem quickly doesn't lessen that liability (it only stops the liability from getting bigger).

If this wasn't the case, what would stop the companies of the world from hiring shady sub-contractors to steal other's IP and code, pass it on to the hiring company, and then let the hiring company sell that IP/code as it's own? Where are the repercussions?

Let's be clear about this: there are two aggrieved parties in this: Plurk and Microsoft. Plurk was aggrieved by Microsoft when MSN China attempted to use Plurk code as their own. Microsoft was aggrieved by the sub contractor used by MSN China when they tried to pass off code stolen from Plurk as a unique work.

Legally (IANAL), Plurk's beef is with Microsoft. If MSFT then wants to sue the contractor, that is up to them.

mdasen• 17 years ago

I think Plurk should have stayed quiet for a few days and let Microsoft negotiate with them privately. Clearly one doesn't want to just let Microsoft off the hook, but there's a decent potential that Microsoft would be willing to pay private, non-disclosed reparations or even license the technology or buy the firm. Once the initial problem is fixed (and that has happened), one can quiet down a little and not create further hostility in the hopes that a good, mutually-beneficial outcome will happen.

Microsoft didn't fight and didn't try to use its market position once they found out what happened and, while that doesn't abdicate one of responsibility, it does mean that you can deal with them a bit more in good faith. Granted, that's easy for me to say - it wasn't my work that was ripped off and so I'm not as emotionally involved as the Plurk people who are probably (rightfully so) angry.

grellas3• 17 years ago

Assuming U.S. law (or its equivalent) will apply here, the law is clear that Plurk can sue and recover damages for this misconduct, even with Microsoft's rapid action to deal with the issue. Even assuming the unlikely scenario that the contractor did it entirely without Microsoft's knowledge, Microsoft and the contractor would be jointly (and severally) liable, and Microsoft in turn would be able to cross-sue the contractor to get indemnification under the contract between them.

That said, there is such a thing as acting with class even when lawsuit remedies are available and the actions of the parties will undoubtedly be evaluated at that level as well.

This is the type of situation where a company like Microsoft would be highly unlikely to want to defend a lawsuit of this type if it had other reasonable choices and perhaps what is motivating Plurk is the temptation posed by the prospect of being able to push the legal issue in hopes of extracting some settlement money. Undoubtedly, in the background, some stiff demand letter has already been sent asking for some payout in the context of confidential settlement discussions. I actually don't blame Plurk for this - it is a reasonable thing to do in this context, even if their primary desire is not to drag this thing through the courts. How this will look to people is another issue, however, and such a strategy could easily backfire given that Microsoft has tried to deal with this swiftly and decisively and in a way that certainly appears reasonable given what happened.

mrduncan• 17 years ago

I was going to give a similar comment but you summarized it much better than I could have. Thanks for that.

ynniv3• 17 years ago

Why would you assume that US law will apply in a situation where a Chinese company lifts code from a Canadian company while contracting for a multinational company headquartered in the US but operating in China?

grellas3• 17 years ago

I don't assume that U.S. law will apply. I am predicating my comment with this statement to make clear that the sort of analysis I am articulating would only apply if U.S.-style law applies to the situation. If U.S.-style law doesn't apply, then Plurk's legal remedies might be few, if any. This likely would be one of the trickiest issues in this case if a lawsuit ever sees the light of day.

The doubt on this point, by the way, would be one more reason for Plurk not to push the legal side too hard here.

tybris• 17 years ago

They should just try to get a good licensing deal out of it.

i386• 17 years ago

Absolutely - If I were Plurk I'd be sellin out to Microsoft right now.

sfk2• 17 years ago

I do hope that Plurk goes to court with this. The situation was handled gracefully by Microsoft but a crucial question remains:

Can you outsource to the lowest bidder and expect to get back untainted code? I don't think so. Producing good original code is hard and cannot be done in sweat shops under a tight deadline. Managers at Microsoft should have known this and be held responsible for their actions.

EDIT:

I do not have a source for the above claims, but I would like these issues to be explored in court. Let's say I would not be surprised if they were true.

chollida1• 17 years ago

> Can you outsource to the lowest bidder and expect to get back untainted code? I don't think so. Producing good original code is hard and cannot be done in sweat shops under a tight deadline. Managers at Microsoft should have known this and be held responsible for their actions.

Do you have a source that said Microsoft contracted out to the lowest bidder or that that bidder was a sweat shop. I haven't seen evidence of either.

For all we know they hired a company that came highly recommended. The transgression doesn't give us any insight into this.

voidpointer• 17 years ago

Is it known what the contractor was hired to do? I guess Microsoft didn't just post on rent-a-coder to get the lowest bid on "a microblogging site like Plurk.com".

How deeply was MSFT involved in the project spec and to what degree was that spec based on Plurk?

ynniv3• 17 years ago

A lawsuit does not sound like a good idea. Microsoft has a top notch legal team, the wrongdoing was committed by an outside vendor, and there are three countries involved, each with their own IP laws. A suit will be long and expensive, and MS will do everything in their power to put all liability on that outside vendor, who probably has meager assets to pay damages. Even if they win, the reward will be attempting to collect damages from an uncooperative company somewhere in China.

Plurk: you got your goodwill and free press, don't push your luck. All you will get from a lawsuit is a five year headache and huge bills from your lawyer.

jws• 17 years ago

If someone tips off the BSA that you have a bunch of Office installs without licenses, and when the investigators come you say "Oh sorry, we'll uninstall the extra ones.". Is that "case closed"?

duncanj• 17 years ago

Perhaps the BSA could give MS the same deal as everyone else: shut them down for 4 days to inspect their systems for any evidence of pirated software, or fine them something like 2% of revenues.

figital• 17 years ago

Just a follow-up for those who downmodded me for pointing out that the original complaint/post mentioned (virtually) nothing about de-obfuscation:

"Speaking technically, what makes our claim a little stronger is that Plurk's client side code was obfuscated to begin with, so someone went in there and had to spend some real effort to unpack/reengineer the JS code and prettify it on their end," [a spokesman for Plurk] said."

radioactive21• 17 years ago

Stop making this such a big deal, its like every little thing on the internet has to be bracken down into some philosophical principal that was violated.

This is the best thing that could have happen to Plurk. Microsoft could just buy the whole darn thing, which they probably would have anyways.

Bad rep for Microsoft???? I already thought Microsoft's rep was in the dumps seeing as how every internet site trashes them.

Principal? Like this thing doesnt happen all the time, or like how big companies havent already bought up every little company that stood in it's way? At lease Plurk can get more money with all the PR, if they ever sell.

Microsoft apology for code theft may not do, Plurk says

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