It looks like the press and furor over Microsofts apropriation of BlueJ technology and design in their patent application had an effect. On Monday, Microsoft retracted the patent application, announcing it through their education representative, Jane Prey on the Special Interest in Computer Science Education (SIGCSE) mailing list. Great news; if this patent had been allowed to stand, the chilling effect on educational software development would have been extreme. As it is, good on Microsoft for doing the right thing. Slashdot has more coverage.
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