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Android maker says Microsoft uses the patent system only when its products "stop succeeding"

There's plenty of accusations flying around in the smartphone market these days of intellectual property abuse, bad patents, and IP violations.  Who is good and who is evil depends on who you believe.  On the one side is Google, Inc. (GOOG), makers of the world's best-selling smartphone OS, Android -- and its hardware partners like Samsung Electronics Comp., Ltd.'s (KS:005930).  

On the other side are companies like Microsoft Corp. (MSFT) who hope to force Google and its partners into lucrative licensing contracts [1][2][3] -- or companies like Apple, Inc. (AAPL) that hope to remove its Android products from the market [1][2][3][4] [5][6][7][8] [9][10][11].  In Both Microsoft and Apple's cases, their weapon of choice is IP.

I. Google Says Microsoft is Free-Riding on Android's Success

Understandably, Google isn't happy about this situation.  In an interview with the San Francisco Chronicle, Tim Porter, Google's general counsel on patent matters, comments, "This is a tactic that Microsoft has used in the past, with Linux, for example. When their products stop succeeding in the marketplace, when they get marginalized, as is happening now with Android, they use the large patent portfolio they've built up to get revenue from the success of other companies' products."

Windows Phone Mango
Google says Microsoft is a sore loser who is trying to piggyback on its success due to Microsoft's own inability to compete on the smartphone market [Source: Engadget]

Google's comment that Microsoft is standing on the shoulders of its success, is almost the polar opposite of a recent comment made by Microsoft's general counsel Horacio Gutiérrez who argued, "The [Android] devices have evolved and become so much more powerful, because they've added a number of technologies that pre-existed the new devices. In general, they use software to become general-purpose computers...In doing that, [Google has] really stood on the shoulder of companies like Microsoft who made all these billions of dollars in investments."

As for Mr. Gutiérrez' comment that the cross-licensing and lawsuits were part of a natural and healthy adjustment process, he points out that Microsoft itself didn't have to endure that with Windows, despite a wealth of prior art.

Mr. Porter comments:

Microsoft was our age when it got its first software patent. I don't think they experienced this kind of litigation in a period when they were disrupting the established order. So I don't think it's historically inevitable.

The period of intense patent assertions (against things like the steam engine) resulted in decades-long periods of stagnation. Innovation only took off when the patents expired.

So what I think we're hoping to avoid is this intense focus on litigation to the degree that we all stop innovating.

Google's attorney does raise some good points in that regard.  Microsoft is still struggling with the legacy of an infamous 1991 memo by Bill Gates, in which he warned that had software been patentable in the early days of the computers, "the industry would be at a complete standstill."  In that same interview, Mr. Gates expressed fear that "some large company will patent some obvious thing" and "take as much of our profits as they want" via litigation and forced licensing.

Bill Gates head scratcher
[Source: Business Insider]

Today Microsoft awkwardly finds itself in that role of the big company, who is taking big profits and trying to defend its patents -- some of which are seemingly obvious.  For example, Microsoft has a patent on display icons showing an image is loading on a webpage, and a patent on loading text before images, to speed up page load times.

Google's subsidiary Motorola Mobility has refused Microsoft's licensing demands and has made it clear that it will fight Microsoft in court, if necessary.  Google is already in just such a battle with Apple.

II. Google Promises to Aggressively Battle Apple -- And Microsoft, if Necessary

Microsoft is not alone in having to explain away statements of its past.  After accusing Android of being a "stolen product", Apple was left trying to explain away why it lifted ideas from from Xerox Corp.'s (XRX) PARC operating system in its hit Mac computers.  And it also had an interview of its own to try to explain away, in which late CEO Steven P. Jobs remarked, "Picasso had a saying - 'Good artists copy, great artists steal.' And we have always been shameless about stealing great ideas."  

Apple recently obtained a second patent on the swipe unlock gesture, a feature that was available on many previous devices, including Neonode Inc.'s (NEON) N1m -- a phone which launched in 2005.

In his interview, Mr. Porter complains that a big part of the problem is that obvious patents or patents where there's prior art are not rejected at the U.S. Patent and Trademark Office, but rather have to be eliminated via litigation.  He remarks, "Unfortunately, the way it works is you don't know what patents cover until courts declare that in litigation. What that means is people have to make decisions about whether to fight or whether to reach agreements."

Mr. Porter also confirms that Google's recent sale of patents to top Android handset maker HTC Corp. (TPE:2498) was designed as a counterstrike to Apple.  States Google, "We've said in the past that we aggressively stand behind our partners and want to defend the Android ecosystem. I think that transaction was definitely part of that."

In the interview, Google makes an interesting case, arguing that the biggest problem with the patent system arises from patents that were granted in a lax era in the late 1990s and early 2000s, prior to a 2007 Supreme Court decision which forced the USPTO to be more careful in what kind of patents it allowed.  

Patents wide
Google says the patent system was at its worse in the late 90s and early 00s.
[Source: InvestorsEye]

Concludes Mr. Porter:

But I think what many people can agree on is the current system is broken and there are a large number of software patents out there fueling litigation that resulted from a 10- or 15-year period when the issuance of software patents was too lax.

Things that seemed obvious made it through the office until 2007, when the Supreme Court finally said that the patent examiners could use common sense.

But Mr. Porter says that his company is a realist, and if it has to play ball, it will play ball.  He concludes, "Google is a relatively young company, and we have a smaller patent portfolio than many others. So it's certainly true that part of our intent in buying these portfolios is to increase our ability to protect ourselves when people assert patents against us or our partners."

Samsung and Apple are currently under investigation by the European Union for abusing the patent system in their plethora of suits and countersuits.

For further listening (or reading) on the topic of the issues with the U.S. patent system, we highly recommend the program "When Patents Attack" by National Public Radio special This American Life.  The program is pretty pertinent as it chronicles the world's biggest patent troll -- Intellectual Ventures.  A company that was founded by none other than former Microsoft chief technical officer Nathan Myrhvold.

Source: San Francisco Chronicle



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babies
By Da W on 11/7/2011 1:21:44 PM , Rating: 1
The patent system is flawed, but it is what it is. The rules are in place, they are widely known, smart companies use it to their advantage, just like they use open-source code, inside innovation, insde hardware development, hardware partneship agreements, marketting campain, collect information from everybody who use their search engine / phones / e-mail account.
The weapons are there, just choose yours. That's the way the world works.




RE: babies
By HrilL on 11/7/2011 1:50:44 PM , Rating: 2
The way the system is today makes starups so risky for investors that its putting a dent on inovation. At a time when we need more jobs we're strugging with a system that has a strangle hold on inovation. Sure the rules are known but the simple fact is that the system is broken. Bad patents suck the life out of inovation.

The patent system is supposed to promote the progress of inovation. But now days it stifles it more than helps it.


RE: babies
By Labotomizer on 11/7/2011 4:46:13 PM , Rating: 2
You're right, software patents need to be reformed. But do you think a company that spends billions of dollars on research and patents should have those ideas taken and implemented in competing products? Reform would be good but we need some way to protect the research these companies do. And would that change the fact that Google would still be "stealing" other people's work? Probably not.


RE: babies
By sprockkets on 11/8/2011 1:04:29 AM , Rating: 2
quote:
But do you think a company that spends billions of dollars on research and patents should have those ideas taken and implemented in competing products?


Well since "ideas" can't be patented...


RE: babies
By nafhan on 11/7/2011 3:29:16 PM , Rating: 2
Yep, I agree. The problem isn't MS.
MS, like most other businesses, exists to make money, and they're doing so through a legal means. That's it. It's definitely a problem, but not one of MS's making. Until some meaningful patent reform occurs, this will continue, and likely get worse.


"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken














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