Burning the Ships: Intellectual Property and the Transformation of Microsoft

Chapter 3. Money Isn't Money Anymore

Two people. Two very different strategies. One goal—create new forms of value from intellectual property.

At precisely 10:00 a.m. on February 21, 2005, Anne Kelley and her four-person negotiating team sat down uneasily at one end of a conference table at Toshiba's corporate headquarters in Tokyo. Across from them, the six Toshiba negotiators sat in silence, the expressions on their faces making it clear that they did not wish to be in that room discussing a possible patent cross-license (PCL) with Microsoft, a company the Japanese press routinely called "evil."

"We were all very nervous," recalls Atsushi "Yoshi" Yoshida, a young patent agent on Kelley's negotiating team who would later go to law school and become a Microsoft licensing executive. "This was to be our omiai—in Japan, we call this a marriage meeting, like a blind date or something—but it was not a good atmosphere. We could see on their faces that they were not enthusiastic at all about discussing a PCL with us."

Not a very auspicious beginning, thought Kelley, whose mission was to negotiate the first in what we hoped would be a whole series of patent cross-licenses with major Japanese companies. Six months earlier, I had chosen Anne to head the patent cross-licensing efforts. But the Toshiba negotiations would prove to be by far her most critical challenge to date.

Why Toshiba was so important deserves some explanation. After we abolished the NAP (non-assertion of patents) clause a year ...