As for Microsoft's swift reaction, it was not necessarily a result of Microsoft's kindness of hart and honest remorse. It probably is more of an attempt on Microsoft's part to not get themselves into a deeper hole than they already are in. And no mater how expert or well paid their lawyers are it won't change the fact that they are in the wrong here. There is very little chance Plurk will end up being chewed up and spat out.
And lastly, this is big business, not preschool - the excuse "but a contractor did it, it's not my fault" doesn't work. Microsoft are (one of) the legal entity (-ies) behind that service. They are ultimately responsible for things like this copyright violation. They are free to seek compensation for the damages from the contractor, but legally speaking (well, not really, I'm not a lawyer and this is not legal advice, but still), as far as Plurk are concerned Microsoft are the offender. And don't feel bad about Microsoft, there is a good chance they'll end up with a net positive, at least financially.
So Plurk should roll over and forget anything happened
just because Microsoft said they are very sorry?
You see such benevolence from big corporations in the
same situation almost never. Why should Plurk do any
differently?
Microsoft focuses on building software that corners markets. That's a legitimate mode of operation for a company.
MS did the right thing in their response to this issue. Plurk has suffered no damage, and indeed has won press. Plurk should now also do the right thing and get on with trying to build software, and avoid the martydom track.
And lastly, this is big business, not preschool - the
excuse "but a contractor did it, it's not my fault"
doesn't work.
It's also not in their Plurk's interest to go legal as it will be a distraction from building software.
I think it's your last point that's the most important one here. From a purely pragmatic standpoint, lawsuits are a massive, massive distraction. The startup landscape is littered with the carcasses of startups that got distracted by things other than building and selling their core product, and who thus ran out of cash before achieving any kind of revenue stability. Distractions like this can easily be the death of a startup, and they should be avoided wherever possible. Even if you win the lawsuit, by the time it's all over you'll be far behind where you should be in terms of product development, which will probably more than offset any net win in terms of a legal settlement.
And yes, it probably is in Plurk's best interest to either seek settlement or sue Microsoft over this - for one it will show that they wont tolerate being ripped off (otherwise what's stopping someone else doing it again tomorrow and when caught "sincerely" apologizing) and for two, for a small and relatively unknown company it makes perfect financial sense to do so, they will probably make more money this way than they'll be able to make in 10 years "building software".
There's the ethical approach: is this a matter which, ethically, is worth pursuing? In this case, we might answer by examining the nature and amount of harm done, and the intentions of the parties involved. The harm was limited by unusually quick action, and by the fact that it occurred in a market in which Plurk had no influence or prospective customers to begin with. Microsoft has given a plausible statement denying any intention on its part. Comments suggesting that a lawsuit should be pursued simply because that's the action expected from Microsoft in the case of a role reversal belie a prejudice against Microsoft which doesn't provide a strong ethical basis for a lawsuit.
There's the approach from law: Plurk must demonstrate which laws were violated, in which country, and to what extent. Has Plurk taken any actions to protect its intellectual property prior to this case? Does it hold any patents? Has it copyrighted its publicly readable code or released it under a license? And, if indeed there is a law which has been violated, to what extent would the damages be assessed? If Plurk can't point to some clear loss of revenue from the event, then they must establish an intrinsic value for their intellectual property. From a legal standpoint, that can be difficult.
Finally, there's the approach from likely outcome: statements like, "And no mater how expert or well paid their lawyers are it won't change the fact that they are in the wrong here" belie an extreme naivete in terms of the law and legal proceedings. Legal battles between companies are less often resolved by establishing the "rightness" and "wrongness" of the parties; more often, they are resolved in terms of resources: the company with the most resources wins.
"Hackers" have a peculiar tendency to believe that their expertise in generalized systems means that they can dive into a legal battle and understand the arena well enough to have an outcome in their favor. The term "IANAL" is almost always followed by a layman's legal advice. However, legal proceedings have little to do with programming. Microsoft's legal team for example could simply choose to bury Plurk in onerous discovery, and it would cost Plurk far too much money to even enter the courtroom, while costing Microsoft relatively nothing.
I don't see a winning scenario for Plurk from any of those standpoints.
By acting quickly, they gained some important PR points, but that doesn't erase the offense. This is especially true since they admitted their offense. My guess is that all is left is to negotiate the level of compensation.
The reason I advance is that we don't want large companies taking the following line of thought: "Instead of buying a smaller competitor or replicating their functionality from scratch in a clean room, let's just use an arms-length contractor to rip them off directly. If we get caught, we'll just apologise and settle quietly..."
I believe it is in everyone's best interests that companies be strongly discouraged from this kind of theft, to the point where they will be insanely scrupulous about code developed both in house and at arm's length.
The contrition after the fact certainly should limit further negative consequences, but does nothing to erase the initial crime.
Agree with everything except this last sentence. I reckon they could get a bigger win out of this. Maybe a partnership (I heard they're censored from mainland China, no?), some sort of licensing, or even a token settlement of a little bit of cash so that "Microsoft settled for an undisclosed amount." Going to war with someone who doesn't want it and apologized is a bad play, but they should at least see if they can get a little further with this. Since the China market is blocked to them, this could be a massive win if they get some sort of joint venture, partnership, or licensing going.
If Plurk is hoping for a Microsoft-funded exit, this is probably not the way to go about it.
The situation was handled swiftly and correctly by Microsoft. It got Plurk some free press. It wasn't even caused by Microsoft directly, but by a contractor they had hired. And, best of all, although ordinarily you might be able to allege that it cost you sales ... this all happened in a market in which Plurk has been denied access anyway.
This isn't David and Goliath anymore. Plurk was fortunate to get a swift response from Microsoft in their favor; if their next move is to start a fight with Microsoft, I fully expect that Microsoft's expert, well-paid legal team will chew them up and spit them out.
I'd much rather see Plurk issue a press release stating simply the matter has been resolved and they appreciate Microsoft's swift action.