Microsoft chief executive Steve Ballmer has warned users of Red Hat Linux that they will have to pay Microsoft for its intellectual property.

"People who use Red Hat, at least with respect to our intellectual property, in a sense have an obligation to compensate us," Ballmer said last week at a company event in London discussing online services in the UK.

A video report of Ballmer's speech (registration required) was posted on Mydeo over the weekend.

Red Hat has repeatedly stated that it will not engage in a patent licensing deal similar to the Novell-Microsoft partnership, referring to its as an 'innovation tax'.

Microsoft has been the second most aggressive party in pursuing alleged intellectual property claims against Linux and open source in general.

The firm ranks behind SCO, which failed in its attempt to prove that it owns the intellectual property to Linux and now faces bankruptcy.

Microsoft inked a partnership with Novell last year in which Novell agreed to license Microsoft's intellectual property in exchange for a patent pledge to users of Novell's SuSE Linux.

Ballmer praised Novell at the UK event for valuing intellectual property, and suggested that open source vendors will be forced to strike similar deals with other patent holders.

He predicted that firms like Eolas will soon come after open source vendors or users. Microsoft paid $521m to settle a patent claim by Eolas in August.

"Every time an Eolas comes to Microsoft and says: 'Pay us,' I expect they eventually would like to go to the open source world [as well]," said Ballmer.

"Getting an intellectual property interoperability framework between the two worlds, I think, is important."

Microsoft supported the (rejected) European software patent directive, which would have allowed software patents to be filed within the EU.

Software patents are permitted in the US today. But poor oversight and quality control at the US Patent and Trademark Office allow for many 'bad' patents to be awarded.

Patent critics argue that software does not need long term protection by patents. Development costs of software innovations require fewer investments than for mechanical or pharmaceutical innovations.

Today's cutting edge innovations, furthermore, are reduced to commodities in a matter of a few months or years.

Repeating his call for software patents, Ballmer argued for a limited reform of the US patent system.

"The thing I worry about is that people will want to throw the baby out with the bath water and say: 'Let's just get rid of this.' That would be a terrible thing for innovation in companies large and small," he said.

"Reform makes sense, but we should make sure that it facilitates innovation in our industry as well as others."