Google's Got Microsoft In A Headlock: Pay $4 Billion A Year Or Sto

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Grand Master

(Spork)

Posted
Posted

http://www.businessi...tm_campaign=sai

The game

Google is playing in court against Microsoft is absolutely brilliant.

Today a judge will hear a case between

Motorola Mobility and Microsoft, reports Reuters. Microsoft says that Motorola Mobility wants to charge it $4 billion A YEAR in royalties for patents Motorola holds on WiFi and video technology.

Microsoft says those fees are unfair.

Here's what's at stake:

  • Billions of dollars in money paid from Microsoft to Motorola and eventually, Google.

  • The ability for other companies, like Qualcomm to control fees for patents they licenses.

  • The ability for Microsoft to import Xbox into the U.S. from factories in Asia.

  • Perhaps, ultimately, the ability for Android device makers to use Android without having to pay Microsoft royalties or be sued by the software giant.

If the two don't come up with an agreement, the judge could stop Microsoft from importing Xboxes into the U.S. for sale until they do.

Microsoft is saying that this amount is insanely high and unfair. A judge will rule today on if it agrees with Microsoft or not. If it does, this could affect how much power other companies get to charge for their patents used in standards.

Microsoft has a point. That is too much money for tech used as part of a standard like WiFi. Typically tech used in a standard is licensed for a tiny fee, maybe pennies per unit. It's a practice called FRAND (fair, reasonable, and non-discriminatory terms).

But Microsoft picked this fight with Google. Microsoft has been attacking Android by going after the companies that build devices on it. It has bullied

more than a half dozen Android/Linux device makers into paying it royalties on every device they made. Microsoft has reportedly been asking for $5 - $15 per unit (not pennies). Barnes & Noble refused to pay and the two were in court until they settled last week. That settlement keeps Microsoft's Android patent shake-down scheme in tact.

So Google is buying Motorola Mobility for $12.5 billion and giving Microsoft a taste of its own medicine.

Geekwire's Todd Bishop is

live tweeting from the Seattle courtroom where the case is being heard today.

He

tweets: Bottom line of Motorola's argument: Microsoft should have responded to 2.25% patent royalty demand by negotiating, not filing a U.S. lawsuit. The Motorola lawyer told the judge, "Don't forget they started this, we didn't start this."

HOLY .......

Grand Master

+Majesticmerc MVC

Posted
  • MVC
Posted

This insanity has to stop, it really does. The whole thing is just a goddamn mess. Lawsuits over patents hidden behind NDA's, ridiculous licencing terms, patents on standard components, bans on product imports, copyright on lines of code. The whole tech industry is drowning in lawsuits, and the only winners are the lawyers.

Experienced

pickytech

Posted
Posted

It will be interesting to see what the various governments have to say about Motorola Mobility attempting to use its FRAND-backed patents as weapons. It would be quite dangerous to see them turn a FRAND portfolio into a cash cow on that level; it would literally destroy every industry surrounding such patents because only the absolutely-biggest players could afford to play the game, because every other play would be forced to do the same thing in order to equal the playing field as well as make a profit.

It also seems very short sighted on Motorola Mobility's (and Google's) behalf. It's not as though Microsoft lacks patents that are the crutch of many modern technologies. What does Motorola Mobility expect to do when their entire business, which is much smaller than Microsoft's, hangs on a similar set of patents from Microsoft, or any other company for that matter, such as Apple (where Motorola Mobility is up to the same game)?

I would not be surprised if this was not a game being played by someone at Google that thinks they just gave both Microsoft and Apple a knockout punch, when in fact they have quite possibly destroyed their recent acquisition's value. Both Microsoft and Apple will--out of necessity--collude to quickly work around standards that Motorola Mobility controls with these patents, even at great cost to the industry, because $4 billion annually cannot be maintained for licensing of essential technologies. It won't be easy for them to do it, but they will definitely do it to avoid paying such fees. After all, at $4 billion, that's $59.52 per Xbox 360 ever sold (67.2 million as of mid April, 2012) and the Xbox 360 did not start out as a profitable hardware unit.

Furthermore, what technology group or standards body is going to want to develop around Motorola Mobility's future research when it is going to cost every other player in the industry all of their profits to play? The answer is simple: none. And once a company is walled out of all industry groups, what innovations do they honestly expect to beat everyone to market with that will actually be well received by consumers?

Mentor

Anthony Tosie Veteran

Posted
  • Veteran
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I think this ruling could have absolutely massive ramifications on the patent system and patent litigation. If Motorola wins and Microsoft doesn't get a favorable appeal, the patent system is going to be even more messed up than it currently is, which seems impossible.

Grand Master

+Majesticmerc MVC

Posted
  • MVC
Posted

I think this ruling could have absolutely massive ramifications on the patent system and patent litigation. If Motorola wins and Microsoft doesn't get a favorable appeal, the patent system is going to be even more messed up than it currently is, which seems impossible.

Maybe this is the kick up the arse the patent system needs to reform software patents and patents on standard-mandated stuff. One can hope at least.

Mentor

Gaffney

Posted
Posted

We the consumers need to benefit from this. Is it really good for the consumer for Motorola to have patents about wifi and video which they will never really use except for licences to other companies that will use it. If it's a feat that was hard to get to and cost a lot of cash then OK Licence it out but if a company benefits from it without paying the licence, the licence should be the only cost and a penalty applied but nothing stupid.

But nothing for things like swipe to unlock that's like putting a patent on waving hello to someone. What about physical slide locks, will everyone who made them have to pay Apple?

We need someone like Microsoft and a few other companies to come out and talk to each other in public and bring some rational thinking to the patent system in regards to technology. Just to do what is best for the consumers and the genre of technological advancement.

Mentor

cropcircles

Posted
Posted

If this even makes it to trial it'll be 5 years from now. MS has a fleet of lawyers to deal the hundreds of antitrust lawsuits they've been handed over the years for stealing product ideas and then implementing into their own products. It won't be billions but it'll get settled for lots of millions.

Mentor

ArialBlue

Posted
Posted

I think this ruling could have absolutely massive ramifications on the patent system and patent litigation. If Motorola wins and Microsoft doesn't get a favorable appeal, the patent system is going to be even more messed up than it currently is, which seems impossible.

Let us drink beer and watch the world burn.

Experienced

pickytech

Posted
Posted

This insanity has to stop, it really does. The whole thing is just a goddamn mess. Lawsuits over patents hidden behind NDA's, ridiculous licencing terms, patents on standard components, bans on product imports, copyright on lines of code. The whole tech industry is drowning in lawsuits, and the only winners are the lawyers.

I completely agree, but I should note that you cannot hide patents. The only unadvertised patents are those that are hidden by the government due to "national security" concerns.

There is one caveat though. You do not have to advertise your patent portfolio either. Even though they are all published, no one has any hope of being able to go through all relevant patents to look for self-infringement. It's just not possible.

Grand Master

Xerxes

Posted
Posted

It will get thrown out of court, nobody will stand for it. Motorola/Google are just greedy. Not to mention Motorola/Google just made a massive mistake and awakened the beast, they think MS are stopping at just getting licensing fees from every Android handset sold? they are only getting started. That is my 2 cents, take with a grain of salt.

Grand Master

Xerxes

Posted
Posted

Microsoft started this by charging Android vendors for some standard patents...

Google knows it and its payback time for them... Nothing wrong with that.

Google is trying to protect android from MS, simple as that.

I disagree, what MS did was understandable and what they demanded was reasonable. If Google wants to rip off MS they have to pay the price (not to mention they [Google] are still in hot water with Oracle for the parts of Java they [did or didn't] rip off). However, what Motorola/Google are doing is insanity! if this gets passed, it will be a dark day indeed.

Grand Master

ichi

Posted
Posted

I think this ruling could have absolutely massive ramifications on the patent system and patent litigation. If Motorola wins and Microsoft doesn't get a favorable appeal, the patent system is going to be even more messed up than it currently is, which seems impossible.

You'll only see the patent system reformed if those sitting on a pile of patents get really burnt by it. Big companies have invested far too much money in those patents to accept any reform that weakens the offensive value of their IP, even if that means being slightly inconvenienced every now and then.

Grand Master

farmeunit

Posted
Posted

I disagree, what MS did was understandable and what they demanded was reasonable. If Google wants to rip off MS they have to pay the price (not to mention they [Google] are still in hot water with Oracle for the parts of Java they [did or didn't] rip off). However, what Motorola/Google are doing is insanity! if this gets passed, it will be a dark day indeed.

All MS had to do was bargain, not fiile a lawsuit. They expect everyone to bow to them, and Google is taking a stand. Not to mention MS attacking all the handset makers. People complained about Google not helping, well here it is.

Proficient

nohone

Posted
Posted

Microsoft started this by charging Android vendors for some standard patents...

Google knows it and its payback time for them... Nothing wrong with that.

Google is trying to protect android from MS, simple as that.

When this was first announced, the Google fans claimed that Google had no part in it, that Google does not yet own Moto because no money has yet changed hands and therefore cannot control what they do. Now you say it is time for Google to get payback, that Google is protecting Android. If that is true, then I guess Google is controlling Moto. So which is it, Google does control Moto, or they do not control Moto.

Either way, I think it is time for Microsoft to start charging $200/device for the patents Android is infringing on. Add to this what Oracle will get since they have won at least part of their patent dispute, Android will become very expensive.

Grand Master

+Majesticmerc MVC

Posted
  • MVC
Posted
I completely agree, but I should note that you cannot hide patents. The only unadvertised patents are those that are hidden by the government due to "national security" concerns.

I was referring to when when Microsoft was (and still is) litigating against Android handset manufacturers. The manufacturers were forced to sign a NDA before Microsoft would tell them which patents they'd violated. To me, that's beyond insane.

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