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Nokia looks to either score licensing fees, or force HTC onto Windows Phone

Microsoft Corp. (MSFT) is showing off a mean one-two punch against the smartphone market's top platform Google Inc.'s (GOOG) Android.  After pressuring most Android OEMs into lucrative long-term licensing deals which erase much of the OEMs' margins, and now its close partner Nokia  Oyj. (HEL:NOK1V) and is using patent lawsuits to deliver the second blow.

I. Microsoft Circumvents Licensing Deal Via Subsidiary Nokia

The first victim of this strategy is HTC Corp. (TPE:2498).  HTC signed a deal with Microsoft in 2010, reportedly paying Microsoft around $10 USD per Android smartphone it sells.  The deal grants HTC licenses to various Microsoft operating system and hardware patents that HTC's Android device might otherwise infringe upon.

Generally HTC has tried to play peacemaker when it's been dragged into court.  In November of last year it signed a 10-year licensing pact with Apple, Inc. (AAPL).  Earlier last year Apple had scored an import ban via the U.S. International Trade Commission, the nation's trade court.  The ban caused serious damage to HTC earnings, by worsening the Android phonemakers sales slump.

HTC sign
HTC continues to be bullied by Microsoft and Nokia. [Image Source: Reuters]

While HTC has continued to struggle financially, one might think that it was safe from fresh patent litigation -- at least litigation from Apple and Microsoft, two of the smartphone war's primary drivers.  But if you thought that you would be wrong, as Nokia has secured a ban on much of HTC's smartphone line via a preliminary ruling by the ITC.

Since it has signed a licensing pact with HTC, Microsoft cannot directly sue it.  But in its recent complaint, Finnish phonemaker Nokia Oyj. is instead doing that work.

Nokia recent sold its devices unit to Microsoft, along with a 10-year patent licensing promise for $7.2B USD.  But Nokia Oyj. as a whole continues to exist in Finland and continues its anti-Android "license or be sued" patent campaign.

II. Nokia Started the Patent Wars, and it's Still Pushing Them

Nokia alleges that Qualcomm, Inc.'s (QCOM) radio circuitry inside the Snapdragon 600 (APQ8064) and other commonly used smartphone components violate dozens of patents (at one point the count was 50) owned by Nokia.  But rather than sue Qualcomm, et al., Nokia has decided to selectively target phonemakers that use the chips.

Snapdragon 4
Nokia claims Qualcomm's Snapdragon 4 and other chips infringe on its IP. 
[Image Source: Engadget]

Nokia has long been at the forefront of the so-called "smartphone wars", an industry-wide patent suing frenzy that began in 2009.  Ironically Apple -- the other leading litigator -- was the first company to be sued back in 2009 when Nokia accused Apple of violating 10 of its patents.  

Nokia also set the model that Apple and others would later follow by filing an ITC complaint requesting a ban on infringing products.  As virtually all smartphones are made in China, these import bans would effectively amount to sales bans.  The ITC approach is a particularly attractive one in the U.S. as elements of the 2006 Supreme Court ruling in eBay v. MercExchange [PDF] made it harder to secure more traditional federal court orders to ban products while pursuing infringement claims in the federal court system.

ITC office
The ITC has become a popular route to product bans. [Image Source: Wikimedia Commons]

Nokia's current complaint was filed in the U.S. District Court for the Southern District of California in May 2012 (Case 13-cv-01231-BEN-WMC) by the power law firm Neil Dymott Frank McFall & Trexler APLC [press release].  A separate ITC complaint was filed in parallel.  That complaint targeted a slew of devices that now comprise the older models in HTC's Android lineup including the HTC Amaze 4G, the Inspire 4G, Flyer, Jetstream, Radar 4G, Rezound and Sensation 4G.


The Sensation 4G

The ITC complaint involved nine "non standards essential patents", of which two were singled out to aid in a final ruling. These were EP1133831/U.S. Patent No. 7,415,247 which covers a "Method and arrangement for transmitting and receiving RF signals through various radio interfaces of communication systems" (filed: 1999, granted: 2008) and EP0951138/U.S. Patent No. 6,373,260 which describes a "Method for attenuating spurious signals and receiver" (filed: 1999, granted: 2002).

III. License or be Sued -- Licensing? Nevermind, We'll Sue You Anyways

When Nokia's devices unit was acquired by Microsoft at the start of September -- some expected or hoped that Microsoft might drop the case out of respect for its licensing relationship with HTC.  While the deal did not give Microsoft ownership of Nokia’s intellectual property it did cement the pair's close "strategic relationship".

But Microsoft appears to have no voiced compunctions about its partner continuing to attack its licensees.

On Monday, Nokia was rewarded when Administrative Law Judge (ALJ) Thomas Pender ruled that HTC infringed on the Nokia patents and ordered a ban of the HTC One in a preliminary ruling.  Due to the government shutdown that ruling is currently unavailable.

Nokia spokesperson Mark Durrant told Reuters in an emailed statement, "Nokia is pleased that the initial determination of the ITC confirmed that HTC has infringed two of our patents."

The company is expected to push the ITC to also ban HTC's flagship One smartphone and other newer models, which also use Qualcomm chips.  A final ruling is expected in January, after which HTC has 90 days to respond or face a ban.  If the panel of three ALJs upholds the ruling that HTC infringed, its products could be banned from import by April 2014.

HTC One
The HTC One could be banned by April 2014.

Ultimately, Nokia seem unlikely to actually want to have to follow through on a product ban.  Rather the decision to continue with the complaint will likely look to force HTC (and others) to separately license Nokia's patent portfolio.

A spokesperson for HTC told The Wall Street Journal that HTC will "keep its alternative plans ready to ensure no business disruption."

It's unclear whether that plan involves switching the chips used in the smartphones, switching to Windows Phone, or offering to pay Nokia via a new licensing agreement.

IV.  Microsoft, Nokia are on Pace to Milk Billions  from Android in 2013

Microsoft already makes more than any other party that's sued Android phonemakers to force licensing. It's scooping an estimated $10 USD in pure profit off every HTC smartphone sold; versus a mere $3 to $4 USD that Apple is rumored to receive.  If Nokia could force HTC (and others) to pay an additional $10-15 USD per Android device to license its patent portfolio, it could essentially make it so phonemakers make no profit off the Android smartphones they sell.

This clever scheme would either pad Nokia's profits, or force phonemakers onto the only other mature third-party smartphone platform -- its partner Microsoft's Window Phone. HTC already makes Windows Phones, so the latter is a plausible possibility.
HTC Windows Phone 8X
The HTC Windows Phone 8X


Microsoft was reported some time ago to make more profit off Android licensing that Windows Phone, and given the influx of new high-profile licensees like Samsung and China's ZTE Corp. (SHE:000063).  

Today nearly four out of five smartphones sold are Android phones, and Microsoft is getting a cut of every one of those devices.  Microsoft is on track to make a couple billion dollars off Android licensing this year.  Nokia has also built a strong portfolio of licensing obligations.  It has estimates that it will make $675M USD in royalties off Android smartphones in 2013.

Nokia is today profitable, but its sales aren't great.  It sold 5.6 million smartphones last quarter.  But HTC has fared even worse; it was rumored to have sold only 1 million units of its flagship HTC One smartphone as it missed Q2 earnings targets in July.  If Nokia can force licensing it could potentially score hundreds of millions in new licensing fees, just like its partner Microsoft.

Cash
Royalties are where the money's at for Microsoft and Nokia.
[Image Source: Life's Cheap Thrills]

This is not the first major patent loss of 2013 for HTC.  In May it was discovered via teardowns that Geneva, Switzerland-based STMicroelectrics N.V. (EPA:STMhad apparently stolen the noise-cancelling dual-membrane mic technology Nokia licensed it to use in Lumia components.  HTC subsequently apologized, dropping the once-key feature, and managed to successfully avoid an import ban in Europe.

Sources: ITC, Reuters, WSJ



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This article is over a month old, voting and posting comments is disabled

If you can't beat them, tax them.
By bupkus on 10/2/2013 5:55:30 PM , Rating: 2
Perhaps MS has finally seen what others already knew--most people aren't eager to buy their phones.
Well, maybe they can still make money by suing the competition or license them out of profitability.
I'm not saying they don't have patents, but I am wondering if those patents make any sense.




RE: If you can't beat them, tax them.
By BZDTemp on 10/2/2013 6:45:17 PM , Rating: 4
Considering that the patents comes from Nokia that actually has been developing and making phone for a long time I'd say their patents are likely to based on real innovations. And by real I mean not some crap like round corners or user interface stuff that simply mimics the real world.

Since Nokia are going after those essentially taking advantage of the tech they patented and they have been doing so for some time now I find it questionable to put forward a conspiracy theory about Microsoft using Nokia to force phone makers to the WP platform. But I guess DT likes that sort of stories :-)

Also I gotta say. WP is a good platform and it is, slowly, gaining ground, so Apple better come up with something or they are bound to lose in the long run. Already they aren't cool anymore.


RE: If you can't beat them, tax them.
By Reclaimer77 on 10/2/2013 9:29:16 PM , Rating: 5
Oh come on, this is as despicable as it gets.

HTC already agreed to a licensing deal with Microsoft, they've been paying them for years! Suddenly Microsoft buys Nokia, and they blindside HTC this way?

quote:
Since Nokia are going after those essentially taking advantage of the tech they patented


Umm doesn't the timing of this seem a little suspicious to you? Why did "Nokia" wait this long to "go after" anyone? This isn't Nokia, it's Microsoft -once again- looking to litigate competition off the market entirely. Their first round of "licensing" nearly put HTC in the poor house, now they're going for the knockout blow with import bans.

This is straight up evil. This tactic is so underhanded and dirty, someone should step in and put a stop to it. It's anti-competitive and downright unethical.


RE: If you can't beat them, tax them.
By inighthawki on 10/2/13, Rating: 0
RE: If you can't beat them, tax them.
By Reclaimer77 on 10/2/2013 9:56:20 PM , Rating: 2
lol right, okay, whatever you say.


RE: If you can't beat them, tax them.
By Mint on 10/2/2013 11:43:21 PM , Rating: 2
Nokia only sold the device business to MS. The rest of Nokia is still alive and it owns these patents. They're giving MS a license to use them, but MS doesn't own them.

Jason screwed up the article. According to the WSJ link, Nokia is getting $675M this year in royalites, not Microsoft.
quote:
Nokia in recent years has filed suits around the world against competitors in an effort to protect its more than 10,000 mobile-communications patents. The company, which has agreed to sell its handset business to Microsoft Corp., has estimated that it will receive around €500 million, or roughly $675 million, this year in royalties.


By Reclaimer77 on 10/3/2013 2:40:33 PM , Rating: 1
quote:
Jason screwed up the article.


Oh well, I can only go off the information I have on hand. That's not on me.

Still, these constant patent assaults are getting REALLY annoying and despicable, I stand by that. Especially going after HTC when it's Qualcomm's chip design being used.


RE: If you can't beat them, tax them.
By kleinma on 10/3/2013 1:36:00 PM , Rating: 2
quote:
lol right, okay, whatever you say.


What a sound argument displaying such solid evidence to the contrary.


RE: If you can't beat them, tax them.
By Reclaimer77 on 10/3/2013 2:58:26 PM , Rating: 1
I believe there is internal behind the scenes collusion between Nokia and Microsoft happening here. So does Google, the European Union, and a few other Government's who are investigating this very claim.

No
, I can't prove it.

Yes, I think it's more than likely. I think you would have to be naive to think otherwise given the long history of such happenings on prior occasions.

Microsoft and Nokia transferred 1,200 patents for assertion to a group called MOSAID, which is a known patent troll! An entity who's entire goal is to hold patents and aggressively litigate other companies from "infringement".

So how much more goddamn evidence do you want to hear? I think I'm providing plenty.


RE: If you can't beat them, tax them.
By AmFuzzy on 10/3/2013 3:27:43 PM , Rating: 2
Did you actually READ the article? Did you notice this is the outcome of the lawsuit started almost 1.5 years ago by Nokia? From the article; "Nokia's current complaint was filed in the U.S. District Court for the Southern District of California in May 2012"


By Reclaimer77 on 10/3/2013 3:47:55 PM , Rating: 2
quote:
Did you actually READ the article?


Yes, apparently that was my first mistake.


RE: If you can't beat them, tax them.
By troysavary on 10/2/2013 10:02:25 PM , Rating: 5
Don't bother. If it involved Microsoft or Google in any way, all reclaimer can see is "Google good, MS bad".

Now, any sane person would see that this is what is left of Nokia, not the manufacturing arm Microsoft bought, making the suit.Nokia has already went after HTC before MS bought any part of them over previous patent infringement claims. All evidence points to Nokia, not MS, being behind this.

The last claim had merit, since they were using the mic that Nokia invented. This time, I don't think HTC is guilty. If Nokia has an issue with tech in the Snapdragon, they should go after Qualcomm, not HTC.


RE: If you can't beat them, tax them.
By Reclaimer77 on 10/2/13, Rating: 0
RE: If you can't beat them, tax them.
By Reclaimer77 on 10/2/2013 10:14:26 PM , Rating: 2
And what does this have to do with Google? HTC makes Windows Phones too!


By rsmech on 10/3/2013 2:17:01 AM , Rating: 2
So what does MS have to gain? If HTC fails they lose licensing. How do they win with a Nokia hardware victory?

I'm not seeing your logic here.


By troysavary on 10/4/2013 1:48:09 PM , Rating: 2
Exactly, what does this have to do with Google? You should be asking Mick that, since he is the one claiming this is some secret plot by MS to force HTC to use Windows, when they are already using Windows. Instead of taking a balanced approach and questioning the flawed reasoning in the article, you immediately started on how this is a despicable move by MS. You, not me, turned it into an Android vs WinPhone debate because you are the Android version of Tony Swash, except you completely lack his style.


By troysavary on 10/2/2013 10:23:47 PM , Rating: 4
Touchy, aren't we?


RE: If you can't beat them, tax them.
By themaster08 on 10/3/2013 2:00:48 AM , Rating: 2
The problem, Reclaimer, is that you provide absolutely zero evidence to support your ridiculous claims. It's nothing but pure speculation driven by the fact that the victim is an Android manufacturer. Everyone knows how much of an Android fanboy you are, which doesn't benefit your opinion.
Yet when someone else expresses their viewpoint, which happens to be different from yours, and others call you out for not providing any evidence, you tell them to fuck themselves.

Now, can't you see how others may not take your opinion seriously with such a bigoted attitude?


By YearOfTheDingo on 10/3/2013 3:36:38 AM , Rating: 2
The bottom line is that HTC is shipping products that infringes on Nokia's patent. Whether the part in question was made by HTC itself or sourced from a third-party is irrelevant. Nokia is entitled to effective relief, which is a ban on the infringing products.

If HTC is unhappy about the situation then they'll have the settle the score with Qualcomm.


By Reclaimer77 on 10/3/2013 3:18:25 PM , Rating: 1
Great post, too bad it's all bull. The scope of how singularly wrong you are on every level is just brilliant.

Once again, Reclaimer is right. Nokia and Microsoft are indeed in collusion. There can be no doubt.

quote:
http://www.usnews.com/opinion/blogs/economic-intel...


Microsoft and Nokia are using a known patent troll, Mosaid Technologies, to drive competitors out of the market by conspiring to litigate.

Regardless of what you think of me, regardless of what you think of Android, this kind of behavior is unethical and damning. And it just highlights how utterly broken the US patent system is.


RE: If you can't beat them, tax them.
By rsmech on 10/3/2013 2:10:32 AM , Rating: 2
Seems you didn't read the article again. Just seen MS and suing Android phone maker.

Action started almost a year and a half ago. This is a hardware patent not software. How would Nokia benefit from forcing HTC to use Windows?

Let's hear the conspiracy. This has nothing to do about if Windows phone is better or that Windows 8 sucks or rt tablets suck. It doesn't say Android is inferior. So let's hear the MS hate anyway.

Ready 3...2...1...go...


By StevoLincolnite on 10/3/2013 3:09:12 AM , Rating: 2
Yeah it would be silly for Nokia and Microsoft to chase down a faltering HTC on software patents alone, besides they're one of the largest supporters of Windows Phone anyway.


By JPForums on 10/3/2013 10:03:32 AM , Rating: 3
quote:
Umm doesn't the timing of this seem a little suspicious to you? Why did "Nokia" wait this long to "go after" anyone? This isn't Nokia, it's Microsoft -once again- looking to litigate competition off the market entirely.

From the article:
quote:
Nokia's current complaint was filed in the U.S. District Court for the Southern District of California in May 2012 (Case 13-cv-01231-BEN-WMC) by the power law firm Neil Dymott Frank McFall & Trexler APLC [press release]. A separate ITC complaint was filed in parallel.


quote:
HTC already agreed to a licensing deal with Microsoft, they've been paying them for years! Suddenly Microsoft buys Nokia, and they blindside HTC this way?

From the article:
quote:
When Nokia's devices unit was acquired by Microsoft at the start of September -- some expected or hoped that Microsoft might drop the case out of respect for its licensing relationship with HTC. While the deal did not give Microsoft ownership of Nokia’s intellectual property it did cement the pair's close "strategic relationship".


1) This litigation was underway before Microsoft had ownership of any part of Nokia.

2) Purchasing Nokia's devices division did not give them ownership of the IP in question. Licensing Microsoft's patents doesn't give you immunity to another companies patents.

3) The only part that the article names specifically as an offending device is the Snapdragon 600 (APQ8064). Seeing as this chip hasn't been around that long, I don't find the timing here suspicious in the slightest. The crazy part is there is nothing to indicate that any Windows Phone with offending parts would be safe from litigation either. Only licensees (including Microsoft) are safe.

4) What company in their right mind would invest the time and effort in to get an injunction in place and deny themselves the return on investment. While unlikely, it is possible that Microsoft did request that Nokia drop the litigation and Nokia declined.

Should Nokia approach Qualcomm rather than smartphone manufacturers? I suppose that depends on precisely how the patent was written as it could have been specific to smartphone or mobile device usage. Qualcomm's chips can be used in devices other than smartphones. As I recall, quite a few Apple patents are only applicable in the phone/tablet space as there is prior art in other industries I.E. notebooks. That said, in my opinion, if applicable, they should have gone after the source.

Any way you look at this, despite how the article tries to portray it, this is a Nokia issue, not a Microsoft issue.


RE: If you can't beat them, tax them.
By inighthawki on 10/2/2013 7:34:02 PM , Rating: 3
quote:
Perhaps MS has finally seen what others already knew--most people aren't eager to buy their phones.

That's funny actually, because it's the fastest growing platform of any mobile OS (higher percentage market gain of any OS), and the satisfaction rating is incredibly high. I know very few people who have used one and disliked it.


RE: If you can't beat them, tax them.
By Reclaimer77 on 10/2/2013 8:26:14 PM , Rating: 1
quote:
That's funny actually, because it's the fastest growing platform of any mobile OS


A worthless statistic because Android and iOS have almost reached critical mass, there's not much more room for growth precluding a complete collapse by either party.


By inighthawki on 10/2/2013 8:49:29 PM , Rating: 2
That makes no sense. The sheer fact that any platform gained ground is an indication that they haven't reached critical mass. They've either lost customers to a competing product or failed to attract consumers that the competing product did.


RE: If you can't beat them, tax them.
By troysavary on 10/2/2013 10:05:01 PM , Rating: 2
Doubling sales is doubling sales. I don't see how you can try to spin that as a negative. At the current rate of growth, WinPhone will surpass iOS in several markets very soon.


RE: If you can't beat them, tax them.
By sprockkets on 10/2/2013 10:27:05 PM , Rating: 2
Apple sold 2x the phones in one weekend what Nokia did in 3 months.

Not going to happen anytime soon.


RE: If you can't beat them, tax them.
By Reclaimer77 on 10/2/2013 10:33:55 PM , Rating: 3
Well he said "some markets". In some markets Nokia is kicking Apple's ass because they are basically giving the Nokia 520 (I think that's the model) away. Obviously Apple doesn't compete at the low end.

But a win is a win, I'll gladly cheer any blow dealt to Apple.


RE: If you can't beat them, tax them.
By troysavary on 10/2/2013 10:40:48 PM , Rating: 2
It is the same strategy that got Android the market share they have. Huge numbers of low cost Android handsets were sold long before high end Androids caught on in first world markets. It would be foolish for Nokia to ignore that. They capitalized by making a better low end device than anyone else. The emerging markets is where the future growth is and Apple is shooting itself in the foot by not competing there.


RE: If you can't beat them, tax them.
By Reclaimer77 on 10/2/2013 10:49:51 PM , Rating: 2
Did you see me judge the strategy negatively?

quote:
The emerging markets is where the future growth is and Apple is shooting itself in the foot by not competing there.


Yup, absolutely.

Although their idea of "competing" in emerging markets is an overpriced plastic phone full of year-old parts lol.


By troysavary on 10/4/2013 1:54:15 PM , Rating: 2
I didn't say you judged it negatively. My comment was meant as a general observation, not specifically aimed at you.


RE: If you can't beat them, tax them.
By elleehswon on 10/3/2013 11:41:09 AM , Rating: 2
ok, i'll bite..

we have both windows phones and android phones in the house. My wife picked up an 8x(mainly becuase of the touted "kid's corner" as a way to keep my 3 year old from going where he shouldn't when playing angry birds.) From the get-go, it has been very, very feature lacking(stuff you take for granted in android just isn't present in the 8x.) Don't get me wrong, it's a decent device, just not on par with the current android offerings. The app market also sucks. it has quality apps, but like .....10 of them... also, all that being said, i got my G2 2 weeks ago, wife started playing with it and immediately got jelly.

so, all in all, is it a good phone? sure...just don't compare it to anything else.


RE: If you can't beat them, tax them.
By Varun on 10/3/2013 4:40:08 PM , Rating: 2
Can you please elaborate on this? "stuff you take for granted in android just isn't present in the 8x"

And I'm being serious. I hear this all the time but I'd like to know what features you are thinking of. It'd be nice to hear someone with both actually discussing it. Thanks!


RE: If you can't beat them, tax them.
By Reclaimer77 on 10/3/2013 4:55:01 PM , Rating: 2
One example?

Windows Phone still has a single global volume setting. Android, since like forever, has multiple volume settings for ringtones, notifications, alarms, music etc etc that can all be individually adjusted, muted, or put on vibrate.

Here's a list some guy on the internet compiled, luckily for Windows Phone it only goes to 10.

http://betanews.com/2013/08/12/10-things-a-windows...

This doesn't mean Windows Phone isn't a fine OS. But as an Android user, its' just missing WAY too many common features for me to even consider switching.

Now the common reaction from Windows Phone users, is to just dismiss it all as being "gimmicks".


RE: If you can't beat them, tax them.
By elleehswon on 10/3/2013 11:51:08 PM , Rating: 2
Reclaimer beat me to it. but yeah, a bit of googling will probably go farther than trying to get my wife to argue with people over the internet :(


By Reclaimer77 on 10/4/2013 12:13:33 AM , Rating: 2
Another thing I love about Android is having access to the "Developer Options" menu.

One of the first things I do with any new Android device is go in there and take the two seconds to disable all animations. I can live without the eye candy, plus it makes the UI feel even faster.

I understand why Apple has so much of the OS hidden from the user, I mean that's their thing. But Microsoft? From the makers of Windows OS, customizable and tweekable to the 'nth degree, I was pretty let down when I saw the direction they were going with Windows Phone.


RE: If you can't beat them, tax them.
By Varun on 10/4/2013 9:31:50 AM , Rating: 2
I appreciate the response. I'll agree some of those things bug me with Windows Phone (especially the "one volume to rule them all"). This thread is getting way off topic but I know a lot of these things are being fixed - it's just taking so damn long.

Of that list of 10 things, most I don't find an issue, but my biggest issue is the (lack of) multitasking. They need to make this better. Most apps have to completely re-open and even those that support fast switching take too long.

But there's things I love too like the lock screen, glance, live tiles, etc so I guess it's a compromise.


By Reclaimer77 on 10/4/2013 11:51:54 AM , Rating: 2
Yes a big update is rumored to hit WP8 "later this year", fixing a lot of these issues and -like Apple- lifting features straight from Android onto the OS.

But you're right, the process always seems to take too damn long.


By AmFuzzy on 10/3/2013 3:24:41 PM , Rating: 2
You must be a troll because you didn't read the article. Nokia initiated this lawsuit almost 1.5 years ago. From the article "Nokia's current complaint was filed in the U.S. District Court for the Southern District of California in May 2012"


By p05esto on 10/6/2013 2:25:53 PM , Rating: 2
You should really reconsider. The camera on the latest Windows Lumina phones are the best out there.... not even a close second. The Win8 phone OS is also innovative and fresh to use compared to the same old icon based OS of Android/Apple. Don't knock it until you use it. I can plug in my windows phone via USB and move files around with simpole windows explorer. No syncing, no nonsense, so easy.... dare you try that with Apple. lol


By Belegost on 10/3/2013 12:58:01 AM , Rating: 5
Seriously... I come here for a laugh really, but this is over the top.

"It's scooping an estimated $10 USD in pure profit off every HTC smartphone sold; "

How is it "pure profit?" Someone had to make those patents in the first place, and that (with high probability) cost money, and time. The licensing fees are a return on that investment, a return that the patent system is specifically designed to protect. The profit margin on licensing patents is high for a good reason, to encourage companies to invest in the research and development needed to push new technologies.

In perspective, if someone writes a book, and it's available in eBook format is every eBook sold "pure profit?" Is that author somehow not worthy of receiving compensation for the effort that went into writing the book?

As someone who has patents to my name this is actually something that pisses me off, I put the work into producing new ideas, new ways of doing things, why is my unique work worth less than that of a musician or author? I am against patent trolling, and bad patents, because honestly both of those things dilute the value of the work of people like me who put time and sweat into making something new. However, Nokia is not a patent troll, they are widely considered to have the strongest wireless patent portfolio in the world, which they worked for decades to build with real innovation in wireless. Qualcomm is holding the only portfolio to rival it. If HTC is using ideas from those patents, then it seems like Nokia has reason to pursue this. If a court decides that the patents are not infringed, or that the patents are invalid, so be it, but the right to protect the portfolio is clear.

Next issue:
"Nokia's current complaint was filed in the U.S. District Court for the Southern District of California in May 2012"
"When Nokia's devices unit was acquired by Microsoft at the start of September -- some expected or hoped that Microsoft might drop the case out of respect for its licensing relationship with HTC."

So wait:
Nokia filed a lawsuit with HTC in 2012, long before they sold any portion of the company to MS.
Nokia sold the devices section, but kept the patents, which they charged MS to license.

So how the hell is MS supposed to stop the lawsuit? MS paid to license those patents, they did not purchase the patents outright, so they have no control over lawsuits against other parties. Further it would be patently (pun intended) stupid for MS to pay to license these patents and then ask Nokia let HTC use them for free. That would be like Dailytech paying for a Photoshop subscription, but then telling Adobe to give it to CNET for free...

Anyways - the problem here is that HTC has a weak patent portfolio, they did not do the bulk of the fundamental work in the wireless industry that Nokia, Qualcomm, Motorola, Ericsson, Alcatel, hell even RIM did. Or in software/OS like MS and Apple. This makes them a target for those companies that DID do that work. If HTC had a good portfolio of their own there would have been a cross-licensing deal long ago.

Oh and Nokia isn't going after Qualcomm directly because they know that would be the patent war equivalent of WWIII. Both sides have huge portfolios spanning decades of fundamental work on wireless, the result of such a war would be bloody on both sides. Sniping weaklings down is far from chivalrous, but lining up in squares and marching straight at an equally strong enemy is stupidity.




By rsmech on 10/3/2013 2:33:21 AM , Rating: 3
You made to much sense so I don't think you will get many replies.


By Belegost on 10/4/2013 1:46:58 AM , Rating: 2
I also think I really know why HTC and not Qualcomm is the target here. It's because Qualcomm makes the basedband that Nokia uses. So I imagine the conversation went something like this:

Nokia: Oi, Qualcomm, I want you to make us cool modems with this tech we got.

Qualcomm: Ok, that sounds good, but, uh, you know I really don't want to make special chips for you, why don't you let me make all my chips with this cool tech?

Nokia: I understand that, but you know, I need to get paid for all these chips using my tech.

Qualcomm: Yea, sure, but look, what if I make a pile of these chips and no one buys them, I'll still owe you. Why don't I just tell you who I sold the chips to, and you can charge them?

Nokia: Yea ok, me and Motorola, and Samsung and the guys are already tight like that, so it's all good.

HTC: Huh what, did I miss something?

/scene

So basically, Qualcomm has an agreement with Nokia to use the patents, but also has stipulates in their sales to others that each company is responsible for ensuring they have licenses to all the tech in the chips. Because the big players all have cross-licensing agreements, they're covered, but it seems like Nokia and HTC don't have agreements on these.


Bigger lesson here
By Solandri on 10/2/2013 7:56:52 PM , Rating: 3
quote:
The first victim of this strategy is HTC Corp. (TPE:2498). HTC signed a deal with Microsoft in 2010, reportedly paying Microsoft around $10 USD per Android smartphone it sells. [...]

Generally HTC has tried to play peacemaker when it's been dragged into court. In November of last year it signed a 10-year licensing pact with Apple

I think the bigger lesson here is if you roll over and give in to licensing demands without a fight, you're seen as easy prey and they'll come right back to you with more licensing demands in the future.




RE: Bigger lesson here
By ritualm on 10/2/2013 11:03:18 PM , Rating: 2
The trend of late is "Kill Android, one phonemaker at a time". Nokia simply wants HTC to get out of the smartphone business so the Finns - er, Redmond - can walk in and eat their own cakes.


RE: Bigger lesson here
By Reclaimer77 on 10/2/2013 11:33:26 PM , Rating: 2
/shrug

The more phonemakers they weaken or kill, the stronger Samsung becomes.

They're creating a monster.


typical MS
By chromal on 10/2/2013 8:50:12 PM , Rating: 2
If you can't beat them on the free market, litigate! So much for innovation and letting the best product win.




RE: typical MS
By rsmech on 10/3/2013 2:27:23 AM , Rating: 2
You must have just read the headlines and bold print and missed the parts about it starting about 1 1/2 years ago or that it's hardware (Nokia) not software (MS).


By troysavary on 10/2/2013 10:36:03 PM , Rating: 2
If they took the exact same handsets and just slapped WinPhone on them, they would still have the Qualcomm chip that is under contention. You are just pulling the Windows bit out of some dark region of your anatomy. This suit has nothing to do with the OS. It is an attack on Qualcomm by proxy. Nokia wants to make money off of phones using a chip that they, rightly or wrongly I have no idea, view as infringing on their patents.

I think that Nokia should have taken Qualcomm to court over this, just as I think MS and Apple should have went after Google, not handset makers, for any perceived issues they had with Android. Ellison is a first class douchebag, but at least he didn't back down from a fight with Google. He was wrong, as Google had licensed with Sun before Oracle bought them, but he didn't fight a war by proxy.




By drycrust3 on 10/3/2013 11:17:33 AM , Rating: 2
quote:
I think that Nokia should have taken Qualcomm to court over this

I agree, its like buying a car and then you discover you have to pay patent fees to Toyota and Ford.
The real problem is that HTC and others could well be driven from the US market. While that could well bring cheers from Apple and Microsoft and a ton of other US patent holders, the real looser will be the American consumer, who will end up paying more.
One possible outcome is that more phones will be sold online, and that when a person buys a phone, every part of the sale is actually done outside of America, e.g. HTC may ship from Taiwan, Huawai ship from China, etc.


Radar 4G is WP7
By Gunbuster on 10/3/2013 9:13:14 AM , Rating: 2
Hold up now. Nokia who is being bought by Microsoft is suing HTC to stop import of the Radar 4G (A MICROSOFT WINDOWS PHONE)

Makes total sense (@_@)




RE: Radar 4G is WP7
By Flunk on 10/3/2013 10:01:50 AM , Rating: 2
They probably tacked that one on there so that they can claim they're not biased. The Radar 4G has been discontinued for over a year and they're not going to be hurting anyone by banning it.


And today on Nat Geo
By ie5x on 10/3/2013 5:23:30 AM , Rating: 3
Battles Of The Bottom Feeders....




Windows 8 phones
By mchentz on 10/2/2013 7:28:08 PM , Rating: 1
I personally like windows 8 phones. I was told at a t-mobile store once and at a sprint store when I asked I just want a phone to work like a phone. Every time I was told to get a Nokia. I am a very satisfied customer with my Lumia.




HTC 8XT
By Samus on 10/3/2013 12:27:16 AM , Rating: 1
It's a great phone. Thought I'd just say that. Anybody who hasn't used one, take my word for it, HTC going the Windows Phone route could be the very thing that saves them.




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