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Acer, maker of the popular Iconia Android 3.0 Honeycomb tablet has become the latest device maker to cave in to Microsoft's licensing demands.  (Source:
Acer, Viewsonic agree to pay Microsoft's toll

Microsoft Corp. (MSFT) has already inked lucrative licensing details with General Dynamics Corp. (GD) (owners of Itronix, a maker of rugged tablets) [source]; Velocity Micro, Inc. [source]; Onkyo Corp. [source] (JSD:6628); and HTC Corp. (SEO:066570) [source].  It's pressuring Samsung Electronics Comp., Ltd. (SEO:005930) into a similar licensing deal.  Reportedly it wants up to $15 per device sold.  

So what do all these companies have in common?  They all use Google Inc.'s (GOOG) Android operating system and all are afraid that Microsoft may make good on its threat to sue them if they don't pay licensing fees.

Now Taiwan's Acer Inc. (
TPE:2353) has agreed [press release] to a similar licensing arrangement, though it declined to disclose how much it had agreed to pay per device.  Acer makes the popular Android 3.x "Honeycomb" Iconia tablet.

Horacio Gutierrez, corporate vice president and deputy general counsel of Intellectual Property and Licensing at Microsoft comments, "We are pleased that Acer is taking advantage of our industry wide licensing program established to help companies address Android's IP issues. This agreement is an example of how industry leaders can reach commercially reasonable arrangements that address intellectual property."

Of course of amiable phrasing "Help... address Android's IP issues" translates roughly to "forced to pay under threat of lawsuit".

Google does offer Android to device makers for free, so licensing isn't game over to Android manufacturers unlike Apple, Inc.'s (
AAPL) lawsuit campaign [1][2][3][4][5][6], which simply looks to ban Android devices from the market.  However, it does shift the balance of power slightly in the favor of Microsoft, who is trying to push its own Windows Phone 7 smartphone operating system on the masses, by making it less profitable to make Android devices.

Many more manufacturers will like opt the route of Acer and HTC -- simply paying Microsoft's demanded toll.

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By bupkus on 9/8/2011 4:42:48 PM , Rating: 3
The acquisition of Motorola's wireless division (and it's patents) tells me that Google still has no intention of protecting their partners. By acquiring patents themselves, Google is hoping that they can prevent any patent infringement issues by holding onto their own patents to use as leverage in the event infringements come up. Basically, "Mutually Assured Destruction" if any of these companies goes after Google directly.

Absolutely brilliant.

Let me suppose that Android's design has intentionally included vulnerabilities to litigation. Figuring that Apple may just go on the attack to both protect its IP and as a personal vendetta Apple may feel from having Eric Schmidt privy to inside information while on Apple's Board of Directors, Apple will do the dirty work of bringing down smart phone builders allowing Google and Apple to pick up all the pieces.
Google protects themselves and only themselves by buying Motorola IP and manufacturing to leave only two left standing.

If I were a conspiracy advocate I would surely want to know if there were any secret meetings with Eric Schmidt and Apple's Steve Jobs. However, I am not. I would choose the view that Google is just as Machiavellian in its business practices as any other power broker.

By Zuul on 9/8/2011 5:02:41 PM , Rating: 2
When Google changes their legal language, than I'll believe they are after protecting their partners. Until that changes, buying patents only protects themselves.

"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis

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