Microsoft unit accuses Brazilian official of defamation

Microsoft Corp.'s Brazilian subsidiary has initiated legal proceedings against the Brazilian government official credited with developing the country's open-source strategy, saying he defamed the software giant in statements published in the magazine Carta Capital.

In a court filing dated June 7, lawyers for Microsoft Informatica LTDA accused the president of Brazil's National Institute of Information Technology (ITI), Sergio Amadeu, of defamation and argue that statements attributed to him in a March 17 article have damaged the reputation of the company.

The filing, called a "Demand for Explanation," asks the court to order Amadeu to publish a retraction of his comments in Carta Capital, at his own expense.

In the article, written in Portuguese and made available in English on the Web log of Stanford University law professor Lawrence Lessig, at http://www.lessig.org/blog, Amadeu is quoted likening Microsoft's business practices to those of a "drug dealer" and accusing the company of a "strategy of fear, uncertainty and doubt."

"These declarations made by (Amadeu), beyond being absurd and criminal... violate duties inherent to the public office (Amadeu) exercises," says an English translation of the complaint, also posted on Lessig's blog.

Microsoft's actions have aroused a firestorm of condemnation from open source advocates, who have portrayed the action as an assault on free speech and who fear it could be the precursor to a lawsuit against the Brazilian official.

Even at least one Microsoft employee has publicly criticized the company for filing the Demand for Explanation.

"Note to Microsoft management and employees: It's a major mistake to use our lawyers to try to silence our critics in this method," wrote Microsoft developer Robert Scoble, in a recent entry in his Web log, at http://radio.weblogs.com/0001011/.

Amadeu thus far has refused to respond to Microsoft's request. "We are working to have open software on the government, which does not require explanations to monopolies," he said during a speech at a public information technology conference last week.

"Although we don't know if Microsoft has a clear idea that they will sue Sergio, it is very clear that they want to intimidate or even embarrass him," said Denise Direito, a spokeswoman for the ITI, in an e-mail interview.

Microsoft officials in the U.S. were unable to explain the company's rationale for filing the Demand for Explanation or to say whether the company intended to bring a lawsuit against Amadeu.

The only comment the company was able to provide on the matter was a brief written statement saying that the Microsoft was "not suing anyone" and that the company was "committed to an open and respectful dialog with the government, customers and industry."

If Microsoft did plan to sue Amadeu, its window of opportunity may have closed. According to the ITI's legal counsel, Brazilian law required Microsoft to file a defamation lawsuit within three months of the publication of the Carta Capital article -- a deadline that passed on June 17. "We imagine that Microsoft decided not to sue Sergio," Direito said.

Last year, Brazil signed a letter of intent with IBM Corp. to develop initiatives that will promote the use of Linux in the South American country, and the ITI is now in the early stages of managing a sweeping transition to open source that eventually will migrate 300,000 computers to open source software, according to Amadeu.

"We have already migrated between 4,000 and 5,000 machines," he said at the conference. "I believe that in three years we can have half of the total running open source software."

(Daniela Braun and Sonia Penteado of IDG Brazil contributed to this report.)