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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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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.

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.

By TakinYourPoints on 11/8/2011 5:30:20 PM , Rating: 2
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.

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

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