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Microsoft: ten Android firms pay us royalties

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  • Microsoft Patents chart

By Nicole Kobie

Posted on 24 Oct 2011 at 08:19

Microsoft has now signed ten licensing deals with Android manufacturers, saying the mobile patent wars are unnecessary.

The software giant has been seeking royalty payments from handset manufacturers for Microsoft-owned patents used in the Google operating system.

Goldman Sachs has suggested that Microsoft could pull in as much as half a billion dollars in revenue over the next year from the patents used in Android.

The latest patent deal is with Taiwanese manufacturer Compal, which makes smartphone and tablets for third parties, Microsoft said in a blog post.

For those who continue to protest that the smartphone patent thicket is too difficult to navigate, it's past time to wake up

The deal is the ninth Android licence agreement reached by Microsoft in the past four months, the company said, and "means that companies accounting for over half of all Android devices have now entered in patent license agreements with MIcrosoft."

Microsoft also has Android-related deals in place with Samsung, HTC and Acer.

"While lawsuits may dominate many of the headlines, these are being overtaken by the number of licence agreements being signed," said the post, written by Micrsoft counsel Brad Smith and Horacio Gutierrez. "At this point, the fast pace of licensing is reshaping the legal landscape for smartphone patents."

Microsoft Patents chart

Microsoft took a clear dig at Google, which has accused its rival of "extortion" over the patenting issue.

"For those who continue to protest that the smartphone patent thicket is too difficult to navigate, it's past time to wake up," the lawyers wrote.

"As Microsoft has entered new markets from the enterprise to the Xbox, we’ve put together comprehensive licensing programs that address not only our own needs but the needs of our customers and partners as well," the added. "As our recent agreements clearly show, Android handset manufacturers are now doing the same thing. Ultimately, that's a good path for everyone."

Microsoft said it has spent $4.5 billion licensing patents from other companies over the past decade and said that "if our software infringes someone else's patents, we'll address the problem rather than leave it to others".

The argument didn't win over all readers of the blog post, with the first several comments leaping to accuse Microsoft of being a "patent troll".

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User comments

Patent troll?

Anything to attack Microsoft it seems.
Just because it is doing what we would like Apple to do instead of increasing our cost through paying out to lawyers.

By curiousclive on 24 Oct 2011

Saint Microsoft?

Microsoft has once again shown it now seems to be a fair and amenable company that are willing to negotiate the use of their IP. This is certainly preferable over the actions of Apple who simply try to ban anything that might infringe IP if seen as a direct competitor. The former encourages innovation and consumer choice, the latter to be blunt stinks.

By skarlock on 24 Oct 2011

Crazy

It just seems crazy that Microsoft is making so much money on Android phones, a lot more than on it's own WP7 phones. The stats are crazy, it's something like 1 of these deals brings in 5 times as much as the total WP7 (I've only looked up Q2 HTC data).

However I'd take the Microsoft approach over the Apple one any day.

By stevenutt on 24 Oct 2011

Paying to improve the end product for the consumer

It's a win-win-win. The IP owner rightfully gets reimbursed for allowing the use of its patents, the vendor shifts more units, and we get a better product. It seems like we can all get along, after all! (Well, most of us.)

Incidentally, here’s a chance to spew vitriol at Microsoft and a certain someone seems to be missing.

By TheHonestTruth on 24 Oct 2011

Where is SwissMac?

By skarlock on 24 Oct 2011

Where is SwissMac?

By skarlock on 24 Oct 2011

[ SOS ] Complaint about Human Rights Violations by IBM China on Centennial

Please Google:

Tragedy of Labor Rights Repression in IBM China
or
How Much IBM Can Get Away with is the Responsibility of the Media
or
IBM detained mother of ex-employee on the day of centennials

By larkforsure on 24 Oct 2011

Not necessarily as straightforward as it seems

The problem is that Microsoft always settles under NDA, so no-one knows what the deals are.
For a major player like Samsung or Acer, Microsoft can sweeten the deal by offering discounts on other products. However for smaller players Microsoft might not be so gentle.
2 of the patents Microsoft assert against Android relate to FAT32/NTFS filenames. These are essential for interoperation with PCs and should be available under FRAND terms.
By always settling out of court, Microsoft avoids court oversight of its behaviour. This might well not be a virtue but a vice.

By milliganp on 24 Oct 2011

@milliganp

"2 of the patents Microsoft assert against Android relate to FAT32/NTFS filenames. These are essential for interoperation with PCs and should be available under FRAND terms."

Which standards body is setting the standards by which Windows operates in order for FAT32/NTFS filenames to be classified under FRAND/RAND?

Also which are these smaller players that Microsoft may not be so gentle with? All the licencees so far have been multi-billion dollar companies and even if they were not, what would give them the right to use MS patents without a licence?

By chapelgarth on 24 Oct 2011

The patents

Maybe some of the people defending Microsoft as a "fair and amenable company" should read up on the "IP" that they're enforcing, and the way that they are enforcing it. As another poster said, they force you to sign a Non Disclosure Agreement before they'll even tell you which patents you've "infringed"! Not my idea of "fair and amenable".

Barnes and Noble blew the whole racket out of the window. Read all about it at:

http://www.groklaw.net/article.php?story=201104270
52238659

Points 31 to 37 cover the so-called infringing patents. One patent covers the placing of a loading status icon in a browser. Another covers the loading of information in a web page before an image on that web page has displayed itself. Yet another covers a way of changing properties for a selection of text.

Remember, that to be enforceable, patents have to be non-obvious. They are also invalidated by prior art - i.e. somebody else did before.

By BrownieBoy6 on 25 Oct 2011

@BrownBoy6

And a couple are based on GPRS / 3G wireless and reporting the charge status of a battery - these have hardware related components, they don't just have patents on software and processes.

Before Windows came along, changing the properties of text was done using key presses (MS-DOS, VMS etc.) or using the drop down menu bar on UNIX or Mac. Context menus were something new, when they came along.

Until IE came along, Spyglass and Mosaic were the defacto standard for web browsers and the way they loaded pages was often irritating, to say the least. IE brought a big change to the market at the time. It might have also done a lot to damage the original ideas of the Internet and it might have stagnated between 2002 and 2009, but it was a major change in the way we worked back then, and a change for the better.

Likewise, FAT32 is not necesarry for an Android device. They could use their own FS, there are certainly enough out there, which aren't encumbered. But they use it, because it is easier for the customer - they don't need to install a driver under Windows or OS X. But, just because people use it for convinience doesn't mean that MS should give up their rights on it.

My employer has patents, which we have to fight over, in a similar fashion, because what we invented (hardware related) makes the monitoring of production processes much easier to monitor and many companies want to use it. Now they have implemented it (and the general technology in this area has improved greatly since they applied for the patent, all those years ago), it is obvious how you would now do it.

The question is, was there prior art back when MS applied for the patents? (Not when they were granted, which can be several years later).

I don't have any idea. But given that even the big companies, who are happy to sue Apple, aren't interested in going to court seems to suggest that MS's patents have some credence, and the price they are asking isn't worth losing a court case over.

By big_D on 25 Oct 2011

@ Big

> even the big companies, who are happy to sue Apple,
> aren't interested in going to court seems to suggest
> that MS's patents have some credence

Yes, and people used to burn witches, so that means they must have existed.

It's irrelevant to the legitimacy of the patents what anybody else may or not be paying to Microsoft. The truth is, we don't know what anybody *is* paying them. I've heard the 5-10$ per handset figure but it's a guess. We don't know because Microsoft makes these "partners" sign hush-hush agreements. It may be that Microsoft went to the first ones and said "sign here and set a good example, and we promise to charge you peanuts for our patents". Once they've got enough companies to do that they can say "look, others are paying for these patents so they *must* be valid!" and then go for the big money.

You also ignore the example of Barnes and Noble, who told Microsoft to stuff it in no uncertain terms.

As for the patents themselves, it's not just a matter of who did it first; they have to be non-obvious too. Do the Microsft patents sound non-obvious to you?

The FAT32 patent brings up another issue: for years, and I mean like a *decade*, Microsoft turned a blind eye to other companies using it. Only when it was established a de facto standard did they cry "patent, pay up!"

By BrownieBoy6 on 25 Oct 2011

@BrownieBoy6

That was my point, with hindsight, they are non-obvious. At the time they patented them, nobody else, at least publicly, had thought about doing it that way...

By big_D on 25 Oct 2011

Kindle Fire

One of the key differences between the kindle fire and other android devices is that its browser works in conjunction with Amazon servers which do all the prefetch / assembly of web pages.
Given that 2 of the patents Microsoft have asserted against Barnes and Noble relate to browser prefetch behaviour it may well be that Amazon are bypassing these patents in their device and thus avoiding royalties.
This would, of course, add weight to the perceived validity of the Microsoft patents concerned.

By milliganp on 25 Oct 2011

@Big

With regards to the page loading example, perhaps nobody had thought of doing in that way because nobody had *needed* to do it that way before?

Initially, web pages were text only, remember. As pages got more and more media heavy, it slowed down the loading of the text information. Changing the browser to load the text first is - to me, anyway - an obvious reaction to that problem.

Look at it another way: if Microsoft hadn't invented and/or filed its patent, would we all still be suffering 2 minute waits for every browser page to load, because those pages were all still waiting for their graphics?

By BrownieBoy6 on 25 Oct 2011

@milliganp

They would have to pay less, perhaps, although the browser does have a local mode, for users who worry about their privacy. And for SSL connections, the browser caches locally all the time - otherwise Amazon would effectively be performing a man-in-the-middle attack every time you checked your bank site, shopping site etc.

It will also use the Linux kernel, which includes drivers for FAT32.

It also has a battery and displays the status of the battery on the display. The electronics to do that is also patented...

By big_D on 26 Oct 2011

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