By Brad Smith, President and Chief Legal Officer
Rapid advancements in cloud computing are creating new capabilities, insights and efficiencies, allowing businesses big and small to transform the way they deliver products and services. As this transformation accelerates, virtually every company in every sector of the economy is becoming in part a digital business. And as a digital business, it must master the new legal challenges that come with participation in the booming digital economy.
One challenge that technology leaders such as Microsoft have long addressed is the risk of patent infringement. We have over two decades of experience and a broad legal infrastructure designed to manage these risks. We’ve thought about our role in promoting digital opportunities more broadly for companies across the economy. We’ve decided that we will use Microsoft’s patent portfolio to help protect our cloud customers.
Today we are taking an important step to do just that. I am pleased to announce that we are launching Microsoft Azure IP Advantage program – the industry’s most comprehensive protection against intellectual property (IP) risks.
Our goal is to help foster a community that values and protects innovation and investments in the cloud. We want software developers to be able to focus on coding, and businesses and enterprises to be able to respond to the changing needs of their customers with agility without worrying about lawsuits.
It’s a goal that we believe deserves more attention than it has received to date. On the one hand, the cloud-based economic opportunity is enormous. This shift to the cloud will generate more than $1 trillion in IT spending by 2020, according to the research firm Gartner, representing an incredible economic opportunity for individuals and businesses around the world.
But at the same time, it’s important to address the growing risk of intellectual property lawsuits in the cloud. According to Boston Consulting Group, there has been a 22 percent rise in cloud-based IP lawsuits over the last five years in the United States. And non-practicing entities (NPEs) have increased their acquisition of cloud-related patents by 35 percent over the same period.
To address this growing challenge, the Microsoft Azure IP Advantage program will include the following benefits:
1) Our best-in-industry intellectual property protection with uncapped indemnification coverage will now also cover any open source technology that powers Microsoft Azure services, such as Hadoop used for Azure HD Insight.
2) We will make 10,000 Microsoft patents available to customers that use Azure services for the sole purpose of enabling them to better defend themselves against patent lawsuits against their services that run on top of Azure. These patents are broadly representative of Microsoft’s overall patent portfolio and are the result of years of cutting-edge innovation by our best engineers around the world.
3) We are pledging to Azure customers that if Microsoft transfers patents in the future to non-practicing entities, they can never be asserted against them. We do not have a practice of making such transfers, but we have learned that this is an extra protection that many customers value.
With these changes, Microsoft now offers our customers industry-leading protection against intellectual property risk in the cloud. After previewing the program, our customer Shigeki Tomoyama, President of Toyota’s Connected Company, said, “With Azure IP Advantage we can operate and innovate more freely in the cloud while reducing our IP risk. Microsoft is uniquely able to provide such a comprehensive patent offering.”
We take seriously our responsibility to make sure the cloud is used for good, and we stand with our customers to protect them against intellectual property risk. In partnership with our customers, we are committed to creating an ecosystem where developers, entrepreneurs, enterprises and customers can innovate with confidence.
To learn more, hear about Microsoft Azure IP Advantage from some of our early preview customers and see how Azure IP Advantage works, see our animated video above. If you’re an Azure customer, you can learn more here.
This post originally appeared on the Official Microsoft Blog.