Mozilla: An Intellectual Property Monster Story

It was Jamie Zawinski’s idea.

In the early 1990s he had been a student at the University of Illinois. It was his good fortune there to be in the team that developed the Mosaic browser. Mosaic was a leap forward compared to then existing browsers, but you had to know your way around it, it was not so user-friendly.

Mosaic leapt from the World Wide Web platform invented a few years earlier. The Web’s inventor, Tim Berners-Lee, had created a text-based browser. Mosaic added graphics functionality.

Fast forward to 1994 and Zawinski was in Silicon Valley, working for Netscape. Netscape was a start-up company which when it found its way defined itself, at least sometimes, as a Mosaic killer. Netscape’s browser was intended to be a software product that was targeted to snatch the future from Mosaic.

In the Netscape office Zawinski was joined daily by Marc Andreessen and many of the other twenty-something core team that developed the Mosaic browser back at the University of Illinois. These young engineers, graduates of the University of Illinois, had been hired by Netscape to go West to Silicon Valley and build Netscape’s browser.

Zawinski and his young colleagues had accepted a monstrous Oedipal mission. They were to kill their father, Mozaic. They sought to do it in return for a good salary and Netscape shares. They would commit the murder by using a new and more formidable creation, the Netscape’s browser.

Their mission needed a mascot. It was Zawinski’s idea. He merged the name “Mozaic“, the name of the browser he helped co-develop before joining Netscape, with the name “Godzilla” (see movie poster pictured right), the Japanese film animation monster. Mozilla was to be the mascot. And so Mozilla was born.

In time, led by Mozilla, Netscape’s browser did kill whatever chance Mozaic had of global domination.

The savaging may have never taken place had intellectual property law issues stopped Mozilla in its tracks. Netscape, the company, had taken steps to minimise legal risks, but its leadership team had not been clever enough.

Even if the University / NCSA had no copyright in Mosaic, it seems reasonable to think that against Netscape the University / NCSA claim of there being theft of trade secrets was an argument which could at least be made out at law with a straight face. For the University, Douglas Colbether certainly made the trade secrets theft claim directly to Jim Clark, Chairman of the Netscape company (pictured right).

And so, in its infancy Mozilla and its start-up creators at Netscape all faced the threat of death by IP law.

In round one of the battle, the legal position of the University / NCSA had included a demand that Netscape become a licensee of the Mosaic browser (logo right), just like another company which had been formed in 1990 and floated in 1994 raising US$200 million in its IPO. That company and licensee of Mosaic was Spyglass. Spyglass sought to commercialise the Mosaic browser for the University / NCSA.

The source code of “Spyglass Mosaic” was licensed to Microsoft, among other licensees. Indeed, it became the basis for Internet Explorer 1.0 which was released as an add-on to Windows 95. Mozilla the infant monster  could now envisage over the horizon an even bigger beast, Microsoft.

Back at the Netscape headquarters in Silicon Valley, Zawinski and his colleagues kept beavering away creating their “Mosaic killer”. Their product was yet to be completed and already faced legal and marketplace death.

On 3 October 1994, three weeks before a beta release of Netscape’s browser, Clark offered to the University / NCSA a compromise to try to end the now very hot legal dispute between Netscape and the University / NCSA. Clark had an appropriately experienced IP lawyer, Robert Barr, camped outside his office door as well as other in-house and external lawyers to assist.

Clark’s compromise proposal to the University / NCSA was that Netscape would hire a forensic engineer to independently compare the code written for the separate Mosaic and Netscape browsers and report on whether there was violation of the University / NCSA code.

The offer was not taken up. Problem three remained, as did problem one and two.

Jim Clark, the founding investor and chair of Netscape badly needed a solution. His company had now released its browser and over it hung the dark cloud of legal claims by the University / NCSA and consequent negative press.

Making matters more complex, Clark had an IPO for Netscape at the planning stage. And he knew the real ultimate enemy, Microsoft, was always going to be on Netscape’s tail. He needed answers for problems one, two and three. He was not completely on his own, but all the money so far invested in Netscape was his money.

Clark was experienced, both with universities and software businesses. He was a former university academic and had a Ph. D in computer science from the University of Utah. In 1982 he co-founded Silicon Graphics, Inc with $25,000 given to him by Ronnie Goldfield, a friend who saw him as an entrepreneur, not as a university professor. Leaving his teaching position at Stanford University, Clark co-founded Silicon Graphics to be high end computer maker. By the early 1990s Silicon Graphics had became a multi-billion dollar company in stock valuation terms.

However by the early 1990s Clark found himself side-lined at Silicon Graphics, with a diluted share-holding, and about US$20 million. That sounds like a lot of money until you factor in Clark’s achievement and the grand and very real market status of Silicon Graphics in the 1980s. In his biography Clark says that the sum of $20 million “though far from shabby, actually was relatively little to show for a dozen years of creativity, leadership, risk, and hard work…”.

The outcome of the legal dispute remains a mystery. According to Clark’s biography, Netscape and the University / NCSA settled their dispute on 23 December 1994. The basis for settlement is subject to confidentiality so we may never know what was done and paid to remove problems one, two and three.

We can however make informed guesses as to how the threat was removed. It seems from Clark’s biography that the company name, trade secrets and copyright IP issues were minimised or overcome with the help of a number of factors, especially those below.

• COMPANY NAME CHANGE  When Netscape was first formed the company was named Mosaic Communications. That was a blunder by Clark and his collaborators as it made things look legally bad even if they were not. Part of the compromise with the University of Illinois was to change that name. The new name became Netscape Communications. The first browser announced in September 1994 was named Netscape to avoid potential IP issues with the University of Illinois.
• CLEAN ROOM METHODOLOGY  Perhaps due to his long prior experience in academia and business before Netscape, at Netscape Clark had insisted from the outset that Zawinski and everyone else in the development team for the Netscape browser never refer to the Mosaic source code. They were required to develop blind, to ignore the Mosaic browser they had built back at the University / Illinois. They were required to develop a completely new browser program on their own to minimise potential copyright legal claims by the University / NCSA, and even trade secrets claims. This was very smart of Clark. In doing this Clark and his development team had adopted what is known as a “clean room” methodology or strategy for developing new technology, keeping it less exposed to IP stains, chain of title issues, and paternity claims. The methodology works to an extent, but trade secrets (ie information that is legally confidential or protectable) is already in the heads of developers; and so if a trade secrets argument can be made out (as the University / NCSA did) it is hard to deny or fling off.
• CODE IN PUBLIC DOMAIN  Clark also noted that CERN’s code, on which Mosaic was based, was in the public domain. This gave some traction to Netscape to undercut in negotiations any broad IP law claims by the University / NCSA claim that all the Mosaic code subject to copyright. This, further reduced problem three, the copyright problem. (Note here that the World Wide Web was invented by Sir Tim Berners-Lee at CERN, the European Particle Physics Laboratory near Geneva, Switzerland and he put his code into the public domain, ie he made no proprietary claim to it. Others who copied it could not say they had made an original work, and to have copyright, you must have some degree of originality in your work. Mosaic’s code was not completely original.)
• EXPERIENCED LAWYER  The final important smart move by Clark involved extensive use of Robert Barr, a key Netscape lawyer, who worked closely with Clark in strategy and negotiations for resolution of the entire IP law dispute between Netscape and the University / NCSA. During the dispute he was fully engaged in Netscape’s problem.

Clear of IP law threats, the board of Netscape now moved the company forward to an IPO. On the board sat Clark and Andreessen, John Doerr (general partner with venture capitalist firm, Kleiner Perkins Caufield and Byers), Jim Barksdale (CEO of Netscape) and John Warnock (Chair and CEO of Adobe).

Early (pre-1995) adopters of the Netscape browser will recall images of Mozilla emerging slowly on their computer screens on early 1990s dial up connections. For the early images  of Mozilla see How was Mozilla born, written by Dave W. Titus who says he was the designer. As Netscape, the company, turned its mind to seriously trying to attract business users it made the decision to drop Mozilla as a mascot in its logo. In its place they went with a conservative “N” symbol rising like the Sun over the horizon (image right).

The Sun did rise for Netscape, Clark, Zawinski and others involved. Here’s how.

For the IPO Netscape shares were valued at US$28. On offer were 3.5 million shares over and above what employees and earlier investors already owned.

On 9 August 1995, the day of Netscape’s IPO, the shares tripled in value on offer, giving Netscape a market valuation of US$2.2 billion even though it had traded for less than 12 months and was barely 18 months old as an enterprise. At the time this was extraordinary and became news worldwide. By the end of the day Clark was US$544 million richer given the stock price and stock issued to him (he had made an initial investment of US$3 million) and 24 year old Andreessen was US$58 million richer

The IPO was particularly sweet for Clark also as regards achieving the financing, venture capital and IPO strategy he had put into place for Netscape.

When founding Netscape one of Clark’s key decisions was to not bring venture capital into the initial development phase of Netscape. In the initial development phase Clark was the sole investor. In his biography Clark says delaying VC involvement meant Netscape could cut a better VC deal in time and he explains his valuation model in his biography:

To buy in, Clark insisted Netscape’s venture capital partner, Doerr’s firm, pay an unusually high sum – three times the price paid by Clark per share. Kleiner Perkins agreed. It put in US$5 million and Clark put in a further US$2 million to protect his stake from further dilution. Both paid per share US$0.57 for the new (Series B) shares. Doerr also joined the Netscape board.

For this article the Mozilla story ends in March 1998. In that month Netscape released most of the code base for its popular Netscape Communicator internet suite under a free software open source licence, the Netscape Public License. Within Netscape Zawinski was among the advocates for going open source. The application that developed from the code base was called Mozilla, recognising its origins in the early history of Netscape and Zawinski’s idea.

Netscape did give life to Mozilla, and Mozilla has evolved. It is in the backbone of the open source Firefox browser (logo right) used to upload this article online. Mozilla’s name remains in the not-for-profit Mozilla Foundation (and its commercial arm, Mozilla Corp), which produce the Firefox browser, have 90 employees, 200,000 volunteers, and revenues of US$70 million in 2006. It is the Mozilla Foundation’s red Mozilla logo that heads this story. Mozilla continued to survive and thrive post-Netscape.

Where are they now?

How did others fare post-Netscape?

References

The facts and many impressions recorded in this article draw heavily on four books. They also benefit from the fact that more than 10 years have passed since the rise and fall of Netscape, but the rise and rise of many of the ideas for which Mozilla was a leading mascot, eg open source software and Web-related software development.

• Michael A. Cusumano and David B. Yoffie, Competing on Internet Time (Touchstone, an imprint of Simon & Schuster, New York, 1998). Cusumano is also the author of a prior book, Microsoft Secrets.
• Jim Clark with Owen Edwards, Netscape Time (St Martin’s Press, New York, 1997).
• Michael Lewis, The New New Thing: How Some Man You’ve Never Heard of Just Changed Your Life (Hodder & Stoughton, London, 1999).
• Tim Berners-Lee with Mark Fischetti, Weaving the Web: The Past, Present and Future of the World Wide Web its Inventor (Orion Business Books, London, 1999)
• Steven Weber, The Success of Open Source (Harvard University Press, Cambridge, 2004).

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Noric Dilanchian

Noric Dilanchian is a lawyer, author and educator practising in areas of business law for almost four decades, with a focus on contract drafting and review, and the commercialisation of content, technology, digital assets and intellectual property. Linked In |YouTube

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