Microsoft is losing the battle to protect license lucre

Rupert Goodwins Rupert Goodwins Register columnist Published mon 13 Jul 2026 // 09:30 UTC OPINION In Disney movies, if you wish really, really hard for what you want, it happens. In British courts, not so much. Prince Redmondia really, really wanted to stop the evil barons from reselling on-prem Office and Windows licenses, and made a fairy tale argument in court to make it so. Our hero did not get its wish, not then, and not now with the UK Court of Appeals.

The traditional reason companies dislike reseller markets is the obvious one that they don’t get any revenue. The law, however, has an even more traditional take on this: that once you’ve bought something you can do what you like with it. Is this true for software licenses? In Europe, explicitly yes. So Microsoft made the novel argument that its Office's suite's icons and help files made it a creative work that deserved copyright protection. For veterans of the Great Wars Of Software IP, this is arrant nonsense that should be jolly well tossed, and tossed it jolly well has been.

The Royal Courts of Justice in London, whose buildings date back to the 1880s, house the High Court and Court of Appeal of England and Wales. Pic credit William Barton/Shutterstock This is especially bad news for Microsoft. Not only does the reseller market continue, but the company could be on the hook for billions in damages over its efforts to date to shut things down.

By itself, this is bad enough. But wait, there’s more. Microsoft, like any modern blue-blooded software company, would much rather rent you its software than sell it to you. As anyone with the integer math skills of a seven-year-old can tell you, this is a bad deal. Thus, on-premises systems have to die off for this to work, but the sector is alive and well, and Microsoft is stuck with a valuable friend. It can't walk away.

This could turn out very badly indeed, due to one of the lost battles of those software wars. That lost IBM, at the peak of its powers, the IBM PC market it had itself invented. Forty years on, it could do the same for on-prem Microsoft.

The IP wars were all about what legal protection the law gave software companies. Could the look and feel of software be copyrighted? No. How about programming interfaces ? No again, not by copyright or patents. Actual software, as source code or binaries, was copyright and couldn’t be used without permission — which makes Microsoft's claim that text files and clip art confer extra protection so ridiculous.

A lot of this was already accepted in 1981, when IBM launched its PC. The hardware was easy to legally clone, it was barely more than Intel data sheets made flesh. The built-in BIOS chip with the software which linked that hardware to software, was safely copyrighted. IBM even published the source code, knowing that anyone who used even a tiny part of it would meet death by a thousand leathery-winged lawyers. The market swiftly rejected anything other than 100 percent IBM compatibility. Job done.

It took start-up Compaq a year to blow that assumption apart. Get a team of programmers to affirm they’d only seen the BIOS interface, not the source, and get them to implement the interface in entirely new code. 100 percent compatibility. Zero liability. Just like that, IBM lost control of its own invention.

Compatibility is the primary reason people stick with Windows and Office. The UI, behavior, feature set, and file format fidelity matter a lot more than raw function. As every Reg reader knows, there are fantastic FOSS answers for office productivity, ones that obliviate license fees, yet practically nobody wants to know. If only Windows and Office could be cloned with the same degree of fidelity as that PC BIOS.

That BIOS was an 8K binary built from around seven thousand lines of 8086 assembler. The whole listing was an appendix in a ring bound manual. Office and Windows, well, who knows. As much as 200 million lines of code and multiple GB of binary. That’s a lot of ring binders. The sheer heft of the monster and the army of data warriors tending to it made it unassailable, and the Redmond tax inescapable. Until now.

Any sufficiently advanced AI coder is indistinguishable from open sourcery. Set it loose on a product and ask it to duplicate and test. It would be expensive, and we’re probably not there yet. Once done, though, you have a whole new code base that will plug into an MS-powered organization like a clone BIOS into a motherboard. As with the PC market, you could go beyond compatibility and introduce features that people actually want.

It’s not that the sums add up, or that the LLM coding models can demonstrably do this yet. It’s that what was once so clearly impossible it wasn’t worth thinking about is now within the realms of possibility. If someone bet you of a crate of decent malt whisky that this could happen in two years' time, would you take it? Two years ago, who wouldn’t. Now you have to think about it. Now think how big the stakes are for Microsoft.

One of the few things finer on the tongue than a fine Islay scotch is the irony of a company using AI like a chainsaw chopping its own legs off. Prince Redmondia, be careful what you wish for. ®