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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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By ZorkZork on 11/7/2011 3:01:47 PM , Rating: 2
Already now the GDP of the EU is same size as the US (or a bit bigger depending on whose numbers you use). Add Japan, South Korea, Taiwan then you got something fairly substantial. And in a few years there will be 500 million middleclass Chinese and Indians. Then it will not matter what patent laws exist in the US. Manufacturers will just skip offering devices with potential patent problems in the US. And then the rest of the world can get on enjoying the advantages of healthy competition.

By matty123 on 11/7/2011 4:31:53 PM , Rating: 2
Agreed for now the US gets almost special treatment when goods are released, it's usually the first country to get new products and the most likely to see many variations of existing products but if they keep this up in a few years the US will be specifically excluded because there patent laws are becoming more and more obscure and unfreindly to smaller players. Also companies like samsung arn't american and if you look how long the US had to wait for the galaxy s2 to arrive these companies may already be setting the trend.

By matty123 on 11/7/2011 4:33:45 PM , Rating: 2
Found this quite intresting aswel

At this moment, on the White House's official website for petitioning the government, the only thing as popular as legalizing marijuana and separating church from state is a petition to "Direct the Patent Office to Cease Issuing Software Patents."

There are lots of good reasons to end the practice of patenting software, including the fact that software patents are primarily a vehicle for transferring wealth from the innovators who create it to patent trolls whose sole "product" is litigation. (Software patents are also sometimes used by big companies to take their rivals down a peg or two, in what seems like an effort to pile up so many cross-licensing fees that they all cancel each other out.)

Link: https :// staging technologyreview com/ blog/ mimssbits/ 27194/ {Won't let me post link says it is spam

By Labotomizer on 11/7/2011 4:54:51 PM , Rating: 2
So companies should spend money on research and development and have anyone else be able to take that and use it in their own software? I don't get where that logic comes from. And if Samsung is setting a precendent, they're doing it by paying Microsoft to use Android.

By matty123 on 11/7/2011 5:18:55 PM , Rating: 2
I think you misunderstood what I meant by samsung setting a precedent... what I meant was that Americans had to wait for the galaxy s2 to arrive in the states almost six months, {which is ages in the tech world} it was released alomost every where else in the world before that, I have family in south africa who had the galaxy s2 available locally in june. Anyway what I am saying coupled with the post above about how the EU economy is almost the size of the US and there are 500 million upcoming middle classers in India and China is that tech companies may begin to shun the US as the best market for products {or the first} if the goverment allows this patent trolling to continue, eventually when companies can make more money elsewhere without the legal hoops in the states companies may focus there efforts elsewhere {assuming they can make as much profit elsewhere}. Ecspecially of note is the well documented slide to unlock debacle that was approved in the states {for apple} but preliminarly chucked out in Europe because of proir art, the patent office in the states it seems isn't even trying.

By Labotomizer on 11/7/2011 5:56:50 PM , Rating: 2
I agree with software patents being far to vague currently and that they are causing problems. But I also disagree with the idea that companies shouldn't have a way to protect their intellectual property. And I firmly disagree with Microsoft being a patent troll. They are protecting technology they actually use in their own products. A patent troll, at least the way I see it, are these litigation companies that buy up patents and go after large corporations when they never intend to actually use these patents in any actual product.

I think most agree, including Microsoft, that patents need to be reformed. But I've yet to see any real good ideas. And that's unfortunate. It seems the two options I see posted repeatedly are either let the patent system continue as is or allow people to use whatever they want with no regard to the money others have spent in research. And I don't have a good idea for an alternative either.

By ZorkZork on 11/11/2011 3:22:35 PM , Rating: 2
Patents should be reserved for inventions that are not obvious. The rest of the world allows patents for real inventions. This rewards R&D spending. The US seems unique in allowing patents for stuff like gestures, in-app purchases, etc. And since litigation is absurdly expensive in the US, patents becomes a tool for big established players to block smaller upstarts.

"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs

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