Groklaw thinks about the posibility of appeals
<snip>
we find it cut and bleeding on the other side. What about appeals of the
travesty? There is an appeal process, although you may have noticed that
Standards Norge's decision was objected to elsewhere. Perhaps folks have
gotten the idea that ISO is a bit tilted at the moment. But here's what
ISO says about appeals:
"Subject to there being no formal appeals from ISO/IEC national
bodies in the next two months," the text of the standard will be
published as ISO/IEC 29500, ISO said Wednesday.
Here's what it means if there are any such appeals:
If any national standards organizations do make appeals to JTC1,
the Joint Technical Committee of ISO and the International
Electrotechnical Commission (IEC) that worked on the draft, then
Microsoft may have to wait several months longer while the appeal is
heard, according to Section 11 of the ISO/IEC JTC1 Directives.
That is if the appeals are unsuccessful. So Microsoft has to wait at
least two more months for appeals to be filed and heard. So, that means
to me that it will be more than two months, unless ISO just rubber
stamps rejections of appeals as fast as they are filed. Which seems
sadly possible.
</snip>
Can india play any role here?
Can we try it?
Some more news items
-------------------
FSFE concerned about quality of standardisation process
http://mail.fsfeurope.org/pipermail/press-release/2008q2/000206.html
EU investigating OOXML vote
http://government.zdnet.com/?p=3745
Microsoft's ISO win may worsen antitrust woes
Claims of foul play in the voting process may come back to haunt the
software giant
-
http://computerworld.co.nz/news.nsf/news/DFE3C11047741AFACC25741F003379BD
> From: Anivar Aravind <anivar.aravind(a)gmail.com>
> Subject: Re: [FSUG-Bangalore] [ssug-malappuram] Bad news: OOXML won
> the vote for ISO standards approval!
> To: ssug-malappuram(a)freelists.org
> Cc: Free Software Users Group - Bangalore
> <fsug-bangalore(a)mm.gnu.org.in>
This is probably presumptuous of me, but if it is confirmed that
OOXML is approved, how about a protest outside the Microsoft
office in Bangalore (I suppose there is one or more?)
Reason I say this may be presumptuous is because I don't even live
in Bangalore, and can thus be there only in spirit. But even 20-30
people demonstrating outside with placards for an hour or two,
media informed well in advance, and some well-known techie present
to address them, we may get decent coverage and manage to place
the issue in the broader public domain. (Something bigger would be
great, of course, but this is the minimum.) Right now, it's only
FSwallahs who even know that something horrible is happening; let
us try and widen awareness and show that the issue matters to all
citizens, not just software people.
We should focus on the fact that MS has used unethical methods to
achieve this. We should highlight that India voted against, and
supply a list of institutions that voted against while determining
the Indian vote (they're an impressive bunch) and that only
private companies with links to MS voted in favour. We can
highlight the kind of underhand lobbying that MS indulged in
globally and how it essentially rigged the vote.
Then there's lot of other stuff we can add, I paste at the end of
this mail a mail that appeared on ilug-goa mailgroup. We can show
how MS is scr***ing us every which way.
What do people think? Once again, apologies for my presumption,
and ignore this if it doesn't make sense.
-----
> Subject: [ILUG-GOA] [off-topic] Microsoft India pays zero income tax
> An interesting analysis of a recent ruling against Microsoft India by
> the Commissioner of Income Tax(Appeals). Apparently Microsoft India
> doesn't pay a paisa in income taxes...and according to the article may
> be the only such country in the world for Microsoft. Microsoft hasn't
> filed income returns since 2005...since in its own words it had 'nil
> income'.
>
> The CIT(A) has said that Microsoft is liable to pay income tax on
> gross royalty income earned out of licensing its software(b/w
> 1995-2005) to Indian customers. That figure could be as high as Rs.
> 350 crores, which balloons to Rs.700 crores with interest as well!
>
> The most interesting part is the way in which Microsoft's India
> operations are skilfully structured so as to avoid booking sales as
> 'income'.
>
> http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&n…
>
> Microsoft softwares - 'The Product is licensed, not sold\' - Income
> from licensing is royalty, taxable under domestic law as well DTAA;
> CIT (A) enhances income by Rs 1340 Cr
>
> By TIOL Legal Bureau
>
> NEW DELHI, MAR 31, 2008 : IF a sample survey is conducted in India
> with the sole objective of finding a non-user of Microsoft softwares,
> such a laborious exercise may not yield tangible results at all. In
> other words, no computer literate can even feign ignorance about his
> familiarity with Microsoft products. So pervasive and entrenched is
> Microsoft's brand name and its products in any computer-literate
> society. But how many of TIOL Netizens are aware that the Microsoft
> Corporation does not contribute even a single penny to the Indian
> Exchequer in terms of income tax! Perhaps only a handful of
> well-informed ones. Now, how many of you know that Microsoft pays
> income tax on income generated out of its software licensing in all
> other countries in the world but not in India? Perhaps not many again!
>
> Against this backdrop, the TIOL has come to know that in a
> path-breaking judicial decision, the CIT(A) handling international
> taxation cases in Delhi has recently held that the Gracemac
> Corporation, a 100% subsidiary of Microsoft which had, in 1999,
> granted proprietary and ownership right in license and in intellectual
> property (IPR) of Microsoft softwares and hardware products, is liable
> to pay income tax on its gross royalty income earned out of licensing
> of softwares to Indian customers. And the total gross royalty income
> for the six assessment years starting from 1999 to 2005 is computed to
> be about Rs 2240 Crore. Going by 15% tax on royalty u/s 9(1)(vi) of
> the Income Tax Act read with Artilce 12 of the DTAA with the USA, the
> total tax liability on the Microsoft subsidiary is calculated to be
> about Rs 350 Crore. Given that interest has also been confirmed, the
> total liability is likely to exceed Rs 700 Crore.
>
> No doubt, this case has all the makings of a big revenue news-maker
> which would travel upto the Apex Court in the due course of time but a
> studious perusal of the facts, the legal positions both domestic as
> well as international and the lucidity with which every point of the
> counsels of the assessee has been torn apart, reveals that the Revenue
> has indeed made a solid case which would serve as a model decision for
> others in the Department and also a quality training material for the
> young revenue officers who are keen to dabble into the complex
> architecture of international finances and their taxabilities.
>
> Let's take a quick look at the matrix of facts :
>
> Microsoft Corp entered into `a parent subsidiary agreement' with
> Gracemac Corporation on January 1, 1999 under which MS Corp. had
> granted appellant proprietary and ownership right in license and in
> intellectual property ( IPR) of Microsoft softwares and hardware
> products, exclusive licence to manufacture and distribute these
> products to retailers or to MS Corp or to subsidiaries of MS Corp and
> exclusive right to licence Microsoft software and hardware products to
> any third party or the customers.
>
> Later on appellant granted non-exclusive license to Microsoft
> Operations PTE Ltd. Singapore ( MO) to duplicate, market and
> distribute Microsoft software products within specified territory. The
> MO in turn granted non-exclusive distribution right to Microsoft
> Regional sale Corporation USA (in short MRSC) to distribute MS
> Software Products in Asia, South East Asia and South Pacific. MRSC
> had entered into agreements with various distributors in India which
> sold Microsoft software product to End User in India for all the years
> under consideration. During years under consideration the appellant
> had granted end user license to customers in India to use the MS
> software along with a copy of MS Software (distributes by MRSC) in
> lieu of which appellant earned royalty income as `net selling price'
> (license fee) that MRSC had collected from its customers for M.S.
> software in India. However, a part of royalty income was paid by MO
> to appellant at the rate varying from 35% to 73% of `net selling price'.
>
> Microsoft
>
> According to the appellant the income from licensing of software to
> Indian customers was not taxable under DTAA between USA and India and
> for this reason appellant did not file returns of income for the years
> under consideration. In response to notice u/s 148 of the Act for the
> years under consideration, the appellant filed returns of income for
> all the years under consideration declaring Nil income.
>
> During the course of scrutiny assessment, the AO analysed the claim of
> appellant under provisions of section 9(1)(vi) of the Act read with
> Article 12 of DTAA and had held that appellant had licensed MS
> Software to end user in India. Under the license, appellant allowed
> its customers in India to use the software. The AO was of view that
> software is essentially an invention because development of software
> requires highly technical manpower with highly sophisticated
> infrastructure. The AO also pointed out that software falls under the
> category `secret formula or process' and the software when installed
> on a computer responds to every instruction in a specific way. After
> considering the submissions of the appellant, the AO held that income
> received by appellant from licensing of software in India was taxable
> within the meaning of the Income Tax Section and the Article of the
> DTAA. In brief, the AO passed an order to tax about 35% to 40% of the
> total income of Rs 868 Cr for the six assessment orders. The AO in
> fact went by the terms of agreement between the MO and the appellant
> to tax only certain percentages of the income which was attributed as
> royalty income.
>
> When the matter travelled to the CIT(A) the counsels of the assessee
> argued that the sub-licence fees received from MO is not deemed to
> accrue or arise in India under section 9(1)(vi) of the Act. This is
> on account of the following reasons:
>
> ++ The payment of sub-license fees to the Appellant is not in respect
> of a right used for the purposes of a business carried on by MO in India.
>
> ++ The payment of sub-license fees to the Appellant is not in respect
> of a right used for the purposes of making or earning any income from
> any source in India.
>
> ++ This "right to copy" the master copy is exercised by MO in
> Singapore and hence, "copyright" is not used in India. Consequently,
> Article 12(7)(b) of the DTAA is not attracted.
>
> ++ The Appellant's income does not arise in India mainly because it is
> calculated on the basis of the number of Microsoft products sold by
> MRSC to distributors which is in turn not based on the number products
> sold by the distributor in his specified territory since the formula
> used for determining the quantum of royalty is not relevant for the
> purposes of ascertaining the place where the royalty `arises'.
>
> ++ The Appellant claims that depreciation u/s 32 be allowed to it on
> the "fair value" of the "license" granted by MS Corp and consequently,
> the sums received from MO as reduced by depreciation under section 32
> be taxed at 48% (if this be more favorable than the taxability under
> Article 12).
>
> Although the counsels of the assessee indeed laboriously tried to
> rebut all the points raised by the AO but what seems to have sealed
> the fate of the case was a simple expression used in the End User
> Licence Agreement which goes to a customer with each software or
> hardware, and it is ''The Product is licensed, not sold''.
>
> The quasi-judicial authority further notes that ''I am of considered
> view that the argument of the AR that appellant had sold software
> under scheme "full packaged product" and "volume purchase product" to
> Indian customer is factual incorrect statement. The correct fact is
> that appellant had licensed these software to its customers in India
> to copy the same on a specified machine and to use it ... in lieu
> there of a consideration.''
>
> What further strengthens the Revenue's case is the fact that customers
> after acquiring a copy of the software further require permission from
> appellant to activate and use the software on a specified computer at
> specified location.
>
> It is pertinent to mention here that Microsoft Activation System
> located in different part of the world are owned and controlled by
> appellant and these systems get integrated with Master Activation
> System in USA. In other words, it is quite clear from above facts of
> this case that customers never had ownership over the software to use
> the same as their own sweet will but had only right to copy software
> on specified computer and to use software.
>
> Thus it was concluded that,
>
> ++ As per provisions of section 9(1)(vi) the royalty income should
> satisfy twin conditions that there has to be consideration, and this
> consideration should be for transfer of all or any right (including
> the granting of the license) in respect of the copyright, patent,
> invention, design, secret formula or process, scientific work. In this
> case the payment under software license agreement has fulfilled both
> the conditions and the income from software license was taxable in
> India as royalty.
>
> ++ A copy of software supplied by the appellant admittedly did not
> amount to a sale but it is a licence to use the software as stipulated
> in software licence agreement. This is because software is an
> intellectual property right (IPR) which can be licensed to one user
> and can be given further to any number of user. In other words the IPR
> in software still remain intact with the supplier.
>
> ++ income from software licence is in the nature of royalty both under
> the domestic law and DTAA and is taxable in India.
>
> Commenting on the OECD recommendations the CIT(A) noted that they are
> mere recommendations and carry no weight unless they are incorporated
> into domestic laws or DTAAs. In fact, India is not even a Member of
> OECD, and there are many OECD Members which do not comply with OECD
> recommendations on characterisation of income from licensing of software.
>
> Having studied the complex matrix of financial and marketing
> architecture of the assessee, the CIT(A) order also refers to a
> pertinent observation made by Lord Goff of Chieveley who reiterated
> this theme in Ensign Tankers (Leasing) Ltd. v. Stokes [1992] 1 AC 655,
> 681 -
>
> "Unacceptable tax avoidance typically involved the creation of complex
> artificial structures by which, as though by the wave of a magic wand,
> the tax payer conjures out of the air a loss, or a gain, or
> expenditure, or whatever it may be, which otherwise would never have
> existed. These structures are designed to achieve an adventitious tax
> benefit for the taxpayer, and in truth are no more than raids on the
> public funds at the expense of the general body of taxpayers, and as
> such are unacceptable."
>
> The first appellate authority has also taken the pain to cull together
> many landmark international rulings on tax treatment to software
> licensing and has indeed drawn huge strengths for his order by citing
> decisions of many European and North American countries. some of them
> are Adam Opel Ag (German subsidiary of the General Motors Group) Vs
> Inspección Tributaria; Angoss International Limited Vs Her Majesty the
> Queen, Canada and many more.
>
> Having established that the total amount received from India was
> royalty income which was taxable on GROSS BASIS under Article 12 of
> DTAA, the CIT (A) found that the AO had under-assessed the quantum by
> relying on self-determined and adhoc allocation of royalty income out
> of gross royalty income from India under a self-serving agreement.
> Thus, a sum of about Rs 868 Cr, the total quantum of income determined
> by the AO, has been enhanced to Rs 2240 Crore for the all the AYs
> under consideration. Since interests under Sec 234A and 234A are
> mandatory, the AO has no head-room to form any other view on this issue.
>
> Shut down all the windows and restart again - the problem may be
> rectified.
--
"Those who profess to favor freedom, and yet deprecate agitation,
are men who want rain without thunder and lightning. They want the
ocean without the roar of its many waters...Power concedes nothing
without a demand. It never did and it never will." — Frederick
Douglass
From: press(a)fsfeurope.org
Media release 2 April 2008
FSFE concerned about quality of standardisation process
Today the International Standards Organisation (ISO) approved
Microsoft's Office OpenXML format as ISO/IEC standard 29500 despite
severe technical and legal concerns with the specification that have
been raised by various parties.
"FSFE published its 'Six questions to national standardisation bodies'
before the September 2nd vote last year. [1] Considering the statements
about progress made on MS-OOXML, one would have hoped that at least one
of these questions enjoyed a satisfactory response," states FSFE's
German Deputy country coordinator Matthias Kirschner.
He continues: "Unfortunately that is not the case. Issues like the
'Converter Hoax' [2] and the 'Questions on Open Formats' [3] are still
equally valid. As the 'Deprecated before use' [4] and 'Interoperability
woes with OOXML' [5] documents demonstrate, MS-OOXML interoperability is
severely limited in comparison to Open Standards. In addition to these
issues, there are the legal concerns that were raised by various
parties. [6]"
"Technologically speaking, the state of IS29500 is depressing," says
Marko Milenovic of FSFE's Serbian Team and co-chair of the Serbian
technical committee on DIS29500. "In large parts it is low quality
technical prose that fails to use the normative terminology mandated by
ISO/IEC's guidelines. We've been told to wait for the maintenance
process for MS-OOXML to become usable. That ISO would knowingly approve
a dysfunctional specification is disillusioning."
FSFE vice-president Jonas Öberg states: "Governments have to start
asking themselves what the ISO seal of approval really means. As
demonstrated by the MPEG standards, it never meant that something
qualifies as a meaningful 'Open Standard.'"
Öberg continues: "Now it seems that ISO could be the wrong forum for
standards development in information technology in general. It seems to
work too slowly or too poorly to make the ISO brand meaningful in the IT
world. We'll have to see whether ISO can repair its own processes enough
to become a meaningful participant."
"Governments that seek to gain control over their own data and ensure
long-term archival of public records independently from any specific
vendor will need to establish other criteria in their public
procurement," concludes Georg Greve, FSFE's president. "Programs like
'Certified Open' that seek to assess the actual interoperability and
independence are likely to play a larger role in the future." [7]
[1] http://fsfeurope.org/documents/msooxml-questions
[2] http://fsfeurope.org/documents/msooxml-converter-hoax
[3] http://fsfeurope.org/documents/msooxml-questions-for-ms
[4] http://fsfeurope.org/documents/msooxml-idiosyncrasies
[5] http://fsfeurope.org/documents/msooxml-interoperability
[6] http://www.fsfla.org/svnwiki/stdlib/offdoc/mision
[7] http://www.certifiedopen.com
About the Free Software Foundation Europe:
The Free Software Foundation Europe (FSFE) is a non-profit
non-governmental organisation active in many European countries and
involved in many global activities. Access to software determines
participation in a digital society. To secure equal participation in
the information age, as well as freedom of competition, the Free
Software Foundation Europe (FSFE) pursues and is dedicated to the
furthering of Free Software, defined by the freedoms to use, study,
modify and copy. Founded in 2001, creating awareness for these
issues, securing Free Software politically and legally, and giving
people Freedom by supporting development of Free Software are central
issues of the FSFE.
Contact:
You can reach the FSFE switchboard from:
Belgium: +32 2 747 03 57 ext 408
Germany: +49 700 373 38 76 73 ext 408
Sweden: +46 31 7802160 ext 408
Switzerland: +41 43 500 03 66 ext 408
UK: +44 29 200 08 17 7 ext 408
Further information: http://fsfeurope.org
_______________________________________________
Press-release mailing list
Press-release(a)fsfeurope.org
https://mail.fsfeurope.org/mailman/listinfo/press-release
Tuesday, April 01, 2008
Bill Gates is new Secretary-General of ISO
==========================================
Phew, just managed to file it before 12PM!
http://osindia.blogspot.com/2008/04/bill-gates-is-new-secretary-general-of.…
Bill Gates is new Secretary-General of ISO
In a dramatic development, Bill Gates of Microsoft has taken over as the
new Secretary-General of ISO. The outgoing Secretary-General, Illbeser
Vile said that since most of the ISO members now belong to Microsoft,
this is the most appropriate course of action.
Announcing his ascendancy at a press conference, Bill Gates justified
the takeover of ISO. "Just as George Bush invaded Iraq due to WMD
(Weapons of Mass Destruction), we have invaded ISO for approving a WMD
(Weapon of Monopoly Destruction) called ODF (Open Document Format).
"For 26 years, we have been one step ahead of the world, constantly
changing the file formats to suit our whims and fancies. Then one day we
woke up to find that governments are embracing ODF. This had to be stopped."
Flicking the dandruff off his suit, Gates said that he has been itching
for action ever since he stepped down as CEO of Microsoft. "I built two
great monopolies in Windows and Office but it got kinda boring. I went
off on a retreat, called all the M$ top-shots to the table and asked,
"What's the next great monopoly that we can build?"
After three days of intense discussion, the M$ guys finally said, "Why
even care to build products, when we can monopolize standards itself?"
Speaking to the press, Microsoft's VP for Interoperability, Wescroo U
said, "Now we are back to where we belong - bang in the center of the
universe! There was a time when the desktop world used to revolve around
Microsoft. Then these pesky Internet startups like Yahoo, Google and
Facebook turned up, making us looks like fuddy-duddies. Once we control
the standards, we'll see what happens to the sky-high stock valuation of
some of these companies."
Speaking to investors, Gates said that controlling ISO was the ultimate
business model. "Now we don't even need to build products ("we were not
very good at that anyway, just look at Vista!") Our new strategy is:
1) Drive adoption of our standards
2) File a thicket of patents around it
3) Sit back and collect royalties or sue the buggers who don't pay up.
If the software business was a 80 percent margin business, this is a
pure-cash play," Gates told salivating Wall-Street types. "Then why have
so many employees?" asked a shiny, bald-headed guy in a pin-stripe suit.
Promptly, 40,000 out of 50,000 Microsoft employees were fired, sending
Microsoft stock into the stratosphere, where it finally overtook Google.
The remaining 10,000 employees were reassigned to frantically create
"standards" or file patents around them.
One Microsoft minion patented the English language. Everytime, the press
asked a question in English, Microsoft was a few dollars richer. The
Queen was reportedly furious about it but there she could do little
about it since England is now the 51st state in the United States of
America. Another Microsoft factotum patented the right-hand drive as
well as the left-hand drive. Microsoft lawyers promptly scurried around
halting traffic on the streets and collecting royalties from bewildered
commuters, ably assisted by the traffic police, especially in the banana
republics around the world. The only exceptions were the rebel outposts
of China and India, which refused to toe the Microsoft line. To
neutralise these pesky, non-Microsoft standards compliant (read
"spineless") countries, Gates and co, told investors that they will
foment a war between the neighboring countries. "That will teach them
how to be standards compliant," sniggered the man whose net worth was
now half the GDP of the world.
"Is there no limit to your greed?" asked a reporter asked a journalist
in an awed whisper. "No. Our aim is TOTAL WORLD DOMINATION(TM)," said Gates.
Watching this on his TV in the Oval Office, George Bush secreted
unmentionable substances into his pants. As a foul odor pervaded the
White House, Secretary of State, Condoleeza Rice, whispered into the
President's ears, "Don't worry sir. If nothing else stops them, we can
try nuclear deterrence."
NOTE: The sequel to this is coming soon to a multiplex near you. Tickets
will cost double since the movies will be encoded in Microsoft's
proprietary WMA format.
ADDENDUM: Gates said that he is also going to unveil an April Fools Day
joke on the world called called OOXML. However, since there are some
well known date problems with the OOXML format, it will be unveiled only
on April 2nd, 2008. Get ready for the Microsoft Tax!
-------------------
ISO official pressrelease not came out yet. But see the news items
below. This is not part of April fools joke
How philipines Changed its vote from no to Yes
http://www.groklaw.net/article.php?story=20080402003610230
The France Shift From No to Abstain -- HP helped Microsoft France do it
http://www.groklaw.net/article.php?story=20080331212042460
Formal Protest Filed Asking that Norway's Vote Be Annulled & KEI Statement
http://www.digi.no/php/art.php?id=517414
What Really Happened at the BRM for OOXML & Who Attended
http://www.groklaw.net/article.php?story=20080328090328998
India's comments on BRM to ISO
http://osindia.blogspot.com/2008/03/indias-comments-on-brm-to-iso.html
Also The one day Late April fools message
http://osindia.blogspot.com/2008/04/bill-gates-is-new-secretary-general-of.…
Bill Gates is new Secretary-General of ISO
In a dramatic development, Bill Gates of Microsoft has taken over as the
new Secretary-General of ISO. The outgoing Secretary-General, Illbeser
Vile said that since most of the ISO members now belong to Microsoft,
this is the most appropriate course of action.
Anivar