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License or pay settlement, that's what Microsoft's lawyers are telling China's Huawei

Microsoft Corp. (MSFT) has drawn a great deal of flack from critics like Google Inc. (GOOG) for trying to force licensing on Android handset makers.  

The company insists that it’s merely trying to protect its inventions.  However, some question the fact that it's trying to force both manufacturers and OEMs to pay two separate fees on every Android device, in essence double-dipping on licenses.  Others point to the fact that some of its patents are on seemingly obvious software, such as loading images before text or displaying an animated loading icon when loading internet images.  These patents were largely granted during the lax late 90s and early 00s period at the U.S. Patent and Trademark Office.

The latest victim of Microsoft's patent wrath is Chinese telecommunications giant Huawei.  Rather than choose Microsoft's Windows Phone 7 platform, Huawei -- like most other manufacturers -- opted to primarily back Google's free, advertising supported Android platform.

In an interview with The Guardian, Huawei's chief marketing officer Victor Xu confirms that Microsoft is lusting after his company's Android profits.  He comments, "Yes, Microsoft has come to us.  We always respect the intellectual property of companies. But we have 65,000 patents worldwide too. We have enough to protect our interests. We are a very important stakeholder in Android."

Huawei Vision
Huawei is among the biggest Chinese Android OEMs. Pictured: Android 2.3 "Gingerbread" Huawei Vision [Source: Huawei via the Guardian]

Thus far Microsoft has forced two of the three largest Android handset manufacturers -- HTC Corp. (TPE:2498) and Samsung Electronics Comp., Ltd. (KS:005930) -- into licensing agreements, along with a host of smaller sellers [1][2][3].  Samsung was arguably the biggest surprise, as it was an industry veteran with thousands of patents which some believed would be enough to offer it protection from the licensing demands.

Shenzhen-based Huawei has seen most of its past revenue from mobile network infrastructure sales.  The company is the world's second largest maker of mobile network infrastructure behind Sweden's Ericsson SpA (STO:ERIC B) and ahead of France's Alcatel-Lucent (EPA:ALU) and Nokia Siemens (a joint venture between Finland's Nokia Oyj. (HEL:NOK1V) and Germany's Siemens AG (ETR:SIE)).  

But Huawei has grand aspirations for dominating the smartphone market, as well.  Mr. Xu states, "Over the next three years we are aiming to be in the top five smartphone makers, and in the top three in the next five years.  We have established very aggressive targets in the market."

Huawei Girl
Huawei dreams of becoming a top phonemaker. [Source: VR-Zone]

Huawei indicates that "negotiations are in progress" regarding a licensing agreement with Microsoft.  Huawei is looking to aggressively expand worldwide, so it must be wary of the more pro-plaintiff intellectual property atmospher outside of China.

Source: Guardian



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Patent Trolls
By SAmely on 11/8/2011 10:28:45 AM , Rating: 2
Patent Trolls can be equally bad, but I would say that I've lost less respect for Microsoft for licensing rather than a cease and desist stance.




RE: Patent Trolls
By Varun on 11/8/2011 11:32:53 AM , Rating: 3
Patent Troll: term used for a person or company who is a non-practicing inventor (from Wikipedia).

Microsoft is certainly not a patent troll.

I also hate software patents as a rule, but unfortunately they are in place. I agree with you at least MSFT is trying to license their technology rather than just block everyone.


RE: Patent Trolls
By theArchMichael on 11/8/2011 11:59:13 AM , Rating: 2
Excellent point... I actually hadn't even considered that until you pointed it out. Is there a term yet for a company that uses questionable patents, legal maneuvers and litigation to stifle competition a la Apple and Microsoft (when it goes into beast mode)?


RE: Patent Trolls
By Varun on 11/8/2011 12:02:59 PM , Rating: 3
A corporation? :)


RE: Patent Trolls
By killerroach on 11/8/2011 1:33:54 PM , Rating: 2
quote:
Excellent point... I actually hadn't even considered that until you pointed it out. Is there a term yet for a company that uses questionable patents, legal maneuvers and litigation to stifle competition a la Apple and Microsoft (when it goes into beast mode)?


Typically that's something that's addressed by antitrust law. If you have a market position such that you can leverage it to squelch competition, that's typically frowned upon...


RE: Patent Trolls
By michael2k on 11/8/2011 2:43:28 PM , Rating: 2
Excepting that antitrust law was only applied to Microsoft because they used contract language to act anti-competitively.

Apple, in this case, is using actual trademark, patent, and trade dress law to legally act anti-competitively.

Microsoft, in this case, is using patent law to get licensees; both of which are legal (to stop vs license).

It's not illegal to act anti-competitively when you are doing so legally...


RE: Patent Trolls
By kleinma on 11/8/11, Rating: 0
RE: Patent Trolls
By sprockkets on 11/8/2011 12:55:47 PM , Rating: 2
Both apple and MS fall into the submarine warfare category of patent warfare.

Of course, MS, apple and Google all funded intellectual ventures, which is becoming a patent troll, so...


Not so fast....
By torpor on 11/8/2011 11:38:09 AM , Rating: 3
Back in the early days of the Internet, when Golden Gopher, BBS and Mosaic ruled the roost and connection speed was discussed in baud-y terms, methods around how to load remote data to a local screen were important, novel concepts that had a real effect on the user experience.

That, of course is when these "obvious" patents were filed.

Now that we're going back to a minimalist platform with a narrow pipe from the broadband world, some of these concepts are becoming important again. And ideas that became outmoded are important once again.

I have a lot less problem with Microsoft doing this than some others; Microsoft uses its patents in its products and does real R+D. Crying that what was old is new and important again doesn't make a patent invalid.




RE: Not so fast....
By FITCamaro on 11/8/2011 3:07:11 PM , Rating: 2
Well said.

I'll add all software companies have some patents that are "obvious". While I'd rather these patents be invalidated, as long as the company that owns it isn't trying to stifle other innovation by refusing to license them or making it insanely expensive to, I'm somewhat ok with things. But companies like Apple who get away with ridiculous patents on things they didn't even think up and then try to hold the industry hostage with them need a kick in the testicles.


RE: Not so fast....
By Solandri on 11/8/2011 4:15:44 PM , Rating: 3
quote:
Back in the early days of the Internet, when Golden Gopher, BBS and Mosaic ruled the roost and connection speed was discussed in baud-y terms, methods around how to load remote data to a local screen were important, novel concepts that had a real effect on the user experience.

That, of course is when these "obvious" patents were filed.

The period you're describing is the 1980s and early 1990s. Those patents are expired (17 year patent duration prior to 1995).

The patents at issue here were granted around the time the world wide web became popular (1994-1995). Those are set to expire this year (if granted in 1994), or in a few more years (20 year term after 1995).

I was a Mosaic then a Netscape user in grad school back then. Most of the patents I've seen regarding this were obvious to me back then despite my major being engineering, not computer science. I found it annoying that the web browser would pause displaying text while it loaded an in-line image. Frequently I would read all the displayed text, then have to wait for a picture to load before being able to read the rest of the text.

The first thing that came to my mind was to display all the text first, then go back and fill in the image after it's down downloading. The exact method by which you do this can be complex (the text needs to be reflowed), so I can see that being patented. But unfortunately the patent is for simply the concept of displaying text before the images are downloaded, which was obvious even to a non-CS major like me.


OK
By p05esto on 11/8/2011 12:42:10 PM , Rating: 1
I have no beef with Microsoft, it's Apple that I've grown to hate over the years. Microsoft is the new cool, they are not trendy and a wannabe hipster like Apple. Licensing makes sense, cease and desist hurts progress.




RE: OK
By UnauthorisedAccess on 11/8/2011 5:20:08 PM , Rating: 2
I just wish there was some massive patent review that seperated the 'painfully obvious patent covering something that is painfully obvious' and 'patent covering something unique that was the result of R&D and created to protect these from being stolen'.

No cash for painfully obvious patents, cash for painfully obvious patents.


RE: OK
By TakinYourPoints on 11/8/2011 5:30:20 PM , Rating: 2
quote:
I have no beef with Microsoft, it's Apple that I've grown to hate over the years. Microsoft is the new cool, they are not trendy and a wannabe hipster like Apple. Licensing makes sense, cease and desist hurts progress.


Actually, wholesale copying hurts progress. Staking out a new path is in aid of progress. Look at WebOS and Windows Phone 7, two excellent mobile operating systems that are superior to both iOS and Android in some ways, and it was done by tackling unique solutions to problems instead of carbon copying.

I don't blame Apple, Oracle, or Microsoft for protecting their billions in R&D via patents from someone else that just decides to leech off of their work. Samsung in particular has a long history of being a parasite. Research In Motion was suing them for the same reasons Apple is suing them now, and this was before the iPhone was introduced.


Yeah keep dreaming Huawei
By anactoraaron on 11/8/2011 12:55:09 PM , Rating: 1
So you want to be in the top three Android makers in five years? Let's look at where you are now...

You have only 2 android phones that have a 5MP camera- which even then are junk and the rest have your standard 3.2MP camera which is so bad you should just leave it off the phone entirely (I owned a Tmo Comet for a week and returned it).

You don't have any dual core offering here in the US yet (supposedly the glory is on it's way- we'll see) and nothing 4g announced and I can't find any info on anything 4g even in the works as of now. You only seem to be playing a 'barely passable as a phone' and 'catch up' game to your competition now. Not exactly the way to the top.

Lastly, your phone screens is where you seem to be cutting costs at the most. THEY SUCK. BAD. Literally people who look at your phones after seeing SAMOLED and the higher quality screens that are on every phone made by your competition will be put off by whatever you have to offer. The screen is the most important thing in a smart phone- it's what you look at and use the most.

If you are the last to put out a quality product you will never win any tech race to the top. Examples: WP7 (a true quality phone OS- just the last to the game), Nvidia not getting out Fermi when AMD released the HD 5xxx series (and only relatively recently getting out what Fermi should have been) I can go on and on...




RE: Yeah keep dreaming Huawei
By spaced_ on 11/9/2011 2:12:17 AM , Rating: 2
Meh. I own one, does the job for me. 1/4 the price of equivalent Apple product and about 1/2 equivalent Android when I bought it.

Do you think if Apple said they'd be top three in five years back in 2004 you'd believe them?


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