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Am I missing something here?

Yes, they can own a patent on the file format itself which means the style of formatting the data. They own many patents and have threatened the SAMBA team in the past with patent suits if they made SAMBA able to interoperate with Windows too well for MS' liking.

And guess what? SAMBA did exactly as you suggested, they sat down and wrote their own code and still got threatened. Microsoft has openly stated in the past that if open source .NET tools reimplement its proprietary .NET extensions like Windows Forms and ASP.NET too well that it reserves the right to sue the developers for patent infringement.

Patents are for those people who believe in a "fair marketplace" rather than a more or less hands off marketplace. The former draws a bit from market socialism....

Then if I own a patent on a file format I should give it away? I still don't get it. If Microsoft has a patent on a file format, then it belongs to them, not me. I'll just have to come up with something different and better. I don't have a problem with that.

Patents are for those people who believe in a "fair marketplace" rather than a more or less hands off marketplace. The former draws a bit from market socialism....

China isn't a believer in the sanctity of intellectual property, either. And of the industrial nations, they have one of the lowest standards of living and no political freedom.