Windows, Xbox 360 Could be Banned in Germany as Patent War Continues
May 2, 2012 3:20 PM
comment(s) - last by
The ban-happy EU giant is making no friends in the electronics industry
The patent war has claimed another victim -- Microsoft Corp. (
). As bad as things are in the U.S. with respect to abusive,
, Germany is much worse.
I. Microsoft vs. Motorola: The Pot and the Kettle
The nation has been a focal point in the three-way fracas between Microsoft, the Android alliance led by Google, Inc. (
), and Apple, Inc. (
). The players in the battle have targeted Germany with an abundance of lawsuits as the top European Union market has a policy of
banning first and asking questions later
Microsoft vs. Motorola Mobility, Inc. (
) (and by proxy its
) has been a war with plenty of dirt flung by both sides. Microsoft is accused of
threatening Android manufacturers
with an undisclosed large portfolio of operating system patents.
Just how good or bad those patents are was illustrated by a recent Barnes & Nobles, Inc. (
) case. Microsoft approached Barnes & Nobles, an Android tablet maker, with licensing demands. It agreed. Once it had caved, Microsoft shared information about the patents with it. Barnes & Noble was shocked to discover that the patents were mostly trivial or seemingly invalid. In other words, Microsoft's Android extortion was all bluff and no bite.
Barnes & Noble responded by
breaking the embargo
on Microsoft's secret portfolio and terminating the licensing arrangement. In hopes of gaining an upper hand in the inevitable legal abuse to follow, the company wrote a letter to the
U.S. Department of Justice
U.S. International Trade Commission
(ITC) highlighting its complaints about Microsoft's Mafioso-esque tribute scheme.
Motorola and Microsoft are fighting over 100 patents, but the German case focused on only two, involving the h.264 codec. [Image Source: Joker Blog]
Motorola faced similar licensing demands from Microsoft, and refused to back down. It's currently being sued in the U.S. and Germany by the operating system giant, which hopes to terminate EU and U.S. sales of the third-place Android phonemaker.
hardly been angelic
in its response to Microsoft's demands, though. It has seemingly violated legally enforceable "fair, reasonable, and non-discriminatory" rules by refusing to license its standards patents to Microsoft, including those pertaining to the h.264 video codec, at a reasonable rate.
Microsoft complains that Motorola has
sought a preposterous sum
for the h.264 patent -- over $20 -- compared to the typical licensing rate of a couple of pennies per device.
II. Germany is Condoning Destructive International Patent War
In the U.S. the companies' mutual belligerence and patent mongering has been met largely with indifference from the courts, which have refused to implement sweeping preliminary injunctions (product bans) in either direction.
In Germany, though the court has been perfectly happy to go on a banning spree. The latest casualty is Microsoft's Xbox 360 and Windows 7.
Both products may
soon be banned
in Germany, after a Mannheim Regional Court judge ruled them to be in violation of Motorola's h.264 patents --
, a patent on an "adaptive motion compensation using a plurality of motion compensators" (filed in 1992), and
a patent on an "adaptive compression of digital video data" (filed in 1994).
Germany says "No Windows for you!" [Image Source:Columbia Pictures]
Microsoft still has some hope of avoiding the ban. It is appealing the ruling to Oberlandesgericht Karlsruhe (Karlsruhe Higher Regional Court). That court can suspend the ban if it thinks Microsoft will win an appeal on the infringement claims (e.g. if it thinks Motorola's FRAND abuse is overly egregious). Likewise the EU could step in, given that Motorola is
under antitrust investigation
by EU inquisitors regarding FRAND abuse.
Of course it's also entirely possible that the ban may be allowed to stick, as with Motorola's recent
ban the iCloud
While a ban on Windows and Xbox sounds bizarre by American standards, it's an example of just how different German intellectual property laws are versus American laws. In Germany, infringement and validity proceedings are carried out on separate tracks, so it's easy to ban products using patents that are later ruled invalid. As companies increasingly look to abuse this overly trusting architecture, one must wonder how far things must go before Germans demand their government make drastic changes.
Appeal is one of Microsoft's last routes available to avoid a costly ban.
[Image Source: Justin Sullivan/Getty Images News]
Motorola also has to deal with a thorny ruling by a Washington state federal judge, who warned Motorola that it could
face stiff fines in the U.S.
if it tried to enforce a ban on Windows sales in Germany.
In the U.S. Motorola is facing the
prospect of a complete ban on its smartphones
after Apple won a key ruling, which indicated that Motorola -- and virtually any other Android device for that matter -- infringed on one of Apple's mobile patents. The decision will likely be appealed meaning that it is unknown when or if a ban might actually materialize in the U.S.
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Who cares it's Germany
5/2/2012 4:52:15 PM
We will continue to enjoy our Xboxes here and let them fight it out in Germany.
Eventually this move will cause companies to move away from H.264 codec.
RE: Who cares it's Germany
5/2/2012 11:48:32 PM
Believe it or not, Germany has one of the largest economies in Europe.
Companies like Microsoft exist to sell products to consumers in return for money, that is the basis of all profit-making companies.
To pull out of Germany would be a fairly hefty financial hit, the shareholders would hate it.
RE: Who cares it's Germany
5/3/2012 8:09:14 AM
Being the largest squirrel doesn't make you big.
RE: Who cares it's Germany
5/3/2012 3:26:09 PM
Germany has fourth largest economy by GDP in the world
RE: Who cares it's Germany
5/19/2012 4:19:37 PM
On the other hand most people in germany love to follow a "never change a running system" approach, and got stuck on Windows XP anyways. Still, given that most complete PCs and Laptops that are sold will come with a Windows 7 OEM version, we are probably a market of about 4 million private licenses per year, and probably annother 4 million company licenses.
I'm not sure exactly how much money Microsoft makes with a OEM or business license, but thats probably anywhere between 80 and 400 million anual income (and thus almost profit, as it is software thats already developed) being lost. And probably similar numbers on income coming from the XBOX on top of that.
Of course that would only be the tip of the iceberg. If one of the most technologically advanced nations in the world, with thousands of national, highly capable software development companies, is told that it can no longer use Windows, than they will work on alternatives. At the very least you would quickly see an extrem rise of application software and games being ported to either Linux or MacOS. MS would not really be happy with that, not at all.
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