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Windows users 'paying $20 patent tax'
Latest stealth tax?

By Jo Best

Published: Friday 20 April 2007

Every time businesses and consumers shell out for a copy of Windows, they could be paying $20 to keep Microsoft's patent lawyers happy.

According to the Software Freedom Law Centre (SFLC), consumers pay a $20 'patent tax' on all Redmond operating systems, whether pre-installed or off the shelf.

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A report from the SFLC said: "While $20 might not sound like a lot, it adds up pretty quickly. A school with only 50 Windows machines - barely enough for one class of students - is paying $1,000 of its limited budget in patent tax, rather than buying books or other useful supplies. A government agency with a mere couple of hundred Windows machines is paying many thousands of taxpayer dollars in patent tax."

The SFLC, which supports open source software, worked out the 'tax' by calculating the amount Microsoft has spent on lost patent cases - such as the $1.5bn settlement with Alcatel-Lucent - which totals $4bn and then adding the $100m in legal fees the software behemoth spends annually defending around 35 to 40 such cases.

The group estimates there are around 200 million new Windows installations per year, meaning the cost to the consumer of covering the litigation is alleged to be $21.50 per copy of the OS.

The SFLC said: "Customers in Europe and North America pay more for Windows licences than in less affluent countries, leaving them with a bigger slice of the patent tax pie. And many Windows installations are unlicensed, meaning that those users' share of the patent tax gets passed on to paying customers."

The technology industry has been rife in recent years with high profile patent spats, particularly among mobile and telecoms' big names, such as the ongoing Nokia-Qualcomm patent fight. Consultants estimate telecoms companies' patent bills will run into billions this year.

Microsoft did not respond to requests for comment.