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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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RE: uh, what?
By quiksilvr on 11/7/2011 1:41:13 PM , Rating: 5
No. The whole point of Android was so that manufacturers didn't have to pay for the software, making it more appealing than Windows (which worked).

So Microsoft used its patents to squash this perk for manufacturers. Now they pay nearly the same amount they would have to pay to run Windows Phone 7.

In other words, instead of actually competing, they are just using their patents to leech off of the manufacturers and Google's success.

RE: uh, what?
By kleinma on 11/7/2011 3:43:06 PM , Rating: 3
If google is found to be using IP that Microsoft developed and patented, then who is leeching from who?

All google needs to do is take all offending code out of android and then it doesn't need to worry at all about violating patents and paying royalties to Microsoft. Of course then their OS would probably suck so instead of doing that, they would rather just cry about it and hope someone does something in their favor.

RE: uh, what?
By sprockkets on 11/7/2011 7:43:30 PM , Rating: 2
Of course then their OS would probably suck so instead of doing that, they would rather just cry about it and hope someone does something in their favor.

Actually the phone/tablet/ereader wouldn't even function.

Add insult to injury, a lof of the stuff they are whining about is stuff the Linux kernel developed for years, and it is 20 years old.

Remember the FUD Microsoft been flinging "Linux" for years. I guess they had no target to sue that would yield $$$.

RE: uh, what?
By TakinYourPoints on 11/8/2011 3:33:30 AM , Rating: 2
Exactly. Google is now playing in the big leagues and learning that they should have built up a patent portfolio to protect themselves instead of leaving their hardware partners hung out to dry.

RE: uh, what?
By omnicronx on 11/7/2011 4:14:08 PM , Rating: 2
The entire point of open source is that you don't have to pay for software, that does not magically imply that said software is unencumbered.. You can't piggy back on the ideas of others and expect to get it all for free.

Sure companies like MS and Apple hold thousands of garbage patents that should most likely be invalidated, but I assure you many of them are unique and non obvious, and should be patentable regardless of the system in place.

I love Android, but this idea that because Google invisioned an OS that should be free, does not make it so in practice. They should have known better and been more careful in their implementation, perhaps only taking a chance on items that they knew could be invalidated down the line.

Not much in this world is free, the idea that a mobile OS which usually accounts for tens of thousands of patents is going to be completely unencumbered is a pipe dream at best.

And FYI.. this is coming from an Android user.

RE: uh, what?
By spaced_ on 11/8/2011 2:39:34 AM , Rating: 2

Free software is simply called freeware.

OSS is about sharing knowledge and ideas and generally encourages you to 'piggy back' off others, depending on licence. Some licences simply force you to acknowledge the original creators, some copyleft, like the GPL (try to) force proprietary companies to keep any piggy back'd code open (but often they don't, after all, who's going to sue them for violating the licence?), some licences have no restrictions. But in general open source has the philosophy that ideas and code are to be shared in order to allow for rapid innovation and increased knowledge for EVERYONE. Android, nor iOS, nor even Windows would exist without piggy backing from many pre-existing ideas and code, many of them open source.

The difference is, if you patent an idea, you can legally obtain free money. So if you're a public company and have a horde of lawyers, it makes business sense to take advantage of the patent system to increase revenue, thus making shareholders happy, thus receiving pats on back / penis extension for being a good CEO.

Software and 'design' patents are just plain retarded. In 99.999% of cases, all they do is hold the industry back. If you want to keep your secrets to yourself, then do so. In order to develop anything of any value, it takes years of development anyway, this puts you years ahead if your idea doesn't suck balls. This gives you lead time and market advantage ANYWAY. Why do you need another 5-10 years to milk money from others via the legal system?

Problem is, as a software company, Google's business model is simply superior to Apple/Microsoft for the general consumer, they're always going to get a larger user base / market share if they offer their sh*t for free compared with not free. If Google enter any market, they can undercut the competition and it doesn't hurt their bottom $$$ because they have a different business model. Apple/MS don't like having their markets taken away by a company that does things that make consumers spend less $$$ on wanky tech gadgets. So as a CEO of a software company, you either have to adapt, or sue. Which would you rather do if you were CEO?

RE: uh, what?
By NellyFromMA on 11/8/2011 9:02:24 AM , Rating: 2
MS played the actual game and followed its rules, Google had an ideology and are now finding out a little bit about the difficulties of such a athing. Microsoft wasn't late to the party on this one, and there isn't a think about Android that MS hasn't done already, don't you think?

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer

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