WSJ on the impact of MS paying Apple for its IP

Rohit Khare (
Thu, 04 Sep 1997 03:14:10 -0400

[Some perspective on the psyuchological importance of the $100mn side
payment for patent rights... RK]

Business World: Apple Stops Sulking and Comes Out to Play

By Holman W. Jenkins Jr.

Sounding more like a French intellectual than the guy who set out "to
change the world" by inventing the Macintosh, Steve Jobs told Wired
magazine last year: "This stuff doesn't change the world. . . . We're born,
we live for a brief instant, and we die."
That's what going from 25 to 40 will do for you.

Normally we would resist the urge to anthropomorphize business, or even
business people. In this case we'll make an exception. Apple, the company
Mr. Jobs founded, has, like Mr. Jobs himself, finally taken a deep breath
and gotten over itself.

He was once a CEO in love with himself, and his relationships suffered
accordingly. It was a company in love with itself, and didn't cope too
well, either, with a world of others. Now both man and company have
changed. By building bridges of interoperability with the Wintel world --
the essence of the deal announced with Microsoft two weeks ago -- Apple
actually has a chance to thrive again as a maker of PCs for special people.

Crucial to burying the hatchet is a more mature appreciation of the
murkiness of invention, and the difference between this and business.

Apple has been moping woundedly for a decade, based on the feeling that an
evil sibling, Bill Gates, had made off with goodies and glory that
rightfully belonged to Apple, and mommy and daddy didn't do anything about
it. This was the source of Apple's paralysis.

In company lore, Apple "invented" the graphical user interface (GUI), and
Bill Gates "stole" it. It was that simple. What's more, an avant garde
school of antitrust had sprung up to argue that only a "market failure" had
allowed Microsoft to "lock-in" most of the world's users, beating out the
"better" Macintosh system.

It wasn't that simple. Intellectual paternity is always more iffy than it
has been convenient to recognize, and Apple stood on the shoulders of more
giants than its ethos could admit.

Steve Jobs and crew didn't invent the GUI or the mouse, which were
incubating at Xerox's Palo Alto Research Center in the 1970s. Forgotten by
a lot of people, too, Xerox launched its Star computer system two years
before Apple came out with Lisa, its first stab at a GUI. Star featured
windows, pull-down menus, a trash can, the mouse and other rudiments that
would be more elegantly realized in the Mac.

It didn't go anywhere, as PARC's Alan Kay must have figured it wouldn't. He
was on record believing that personal computing, and the GUI, wouldn't come
into its own until computers had a lot more power, and became a lot more

Mr. Jobs and Mr. Gates took turns proving him right. Apple unveiled the
Macintosh in 1984, which was a nice little demonstrator, but wasn't much
use as a tool until it got a hard drive, more memory and a laser printer
several years later.

Mr. Gates wasn't completely out of the loop on what was happening at PARC
either, and was early on involved with Apple in trying to make the Mac GUI
work with his software. He wrote Apple in 1985 urging it to clone the
Macintosh, which would have brought down the cost faster and spread the
gospel to users and software developers. Notoriously, Apple refused.

When the Macintosh was not yet on the streets, Microsoft was already
working on its first version of Windows, which would bring an intuitive
Mac-like overlay to the world of the IBM compatible. Microsoft Word,
designed about the same time, was also engineered with an eye cocked toward
the coming of the graphical interface.

Even then, Mr. Jobs was sniping at Microsoft for cribbing from the
unhatched Mac. According to the Apple messiah's biographer, Jeffrey Young,
the response from Mr. Gates was: "No Steve, I think it's more like we both
had this rich neighbor named Xerox and I broke in to steal the TV set and
found out that you had already stolen it."

In the meantime, IBM compatibles, with their annoying command-line
interfaces, were already spreading through the economy; they let people
achieve their purposes now. So which was truly the better technology?

It wasn't until Windows 3.0 debuted in 1990 that a graphical environment
caught on with a solid majority who had work to get done. By then Apple was
repeating the mistake of Macintosh with its Newton digital assistant --
trying to market a technology in advance of developing that technology to
the point where it could perform a useful function in the world.

Looked at this way, Apple didn't help itself with its technological
preening. It had good ideas, but these weren't going to wait for Apple to
get around to incorporating them into useful products. Microsoft, on the
other hand, helped itself a lot by taking a liberal view of what
constitutes public property.

Software law is unstable in this regard, and it's a moot question whether
strong protection for intellectual property does more to foster or retard
innovation. Every management potboiler ever written, though, decries the
"not invented here" syndrome. And for all its holistic pretensions, Apple's
exclusivist approach slowed, rather than sped, the diffusion of the PC.

Besides, the symptomology of the real world tends to indicate that most of
the squawking about patents and copyrights comes from companies in the
process of committing hara-kiri. Digital Equipment can't do anything right,
and now is trying to sue the trousers off Intel. Apple chased Microsoft
through the courts for a decade, until a judge dismissed it for trying to
copyright a "gestalt." And Xerox chased Apple for a while, without any
better luck.

Then again, Polaroid surprised everybody by winning a $900 million judgment
against Kodak for pirating its instant photo technology.

You never know, but in retrospect it sure looks like Apple was waiting for
some judge to "change the world," rather than Apple adapting to the world
that is. Hence the most interesting aspect of the Microsoft rapprochement:
A payoff of undisclosed magnitude to settle complaints once and for all
about Windows ripping off the Mac.

The money may be large or small, but having its amour-propre salved could
be the thing that finally allows Apple to get back in the game.

Rohit Khare /// MCI Internet Architecture (BOS) ///
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