If these numbers are accurate, then yuck!!! My disgust for software patents just went up even further.
More seriously, I have a question for those who know more about this...
1. Are these generic, broad "idea" patents and hence there is nothing Google/OEMs can really do here to avoid licensing them? If not, why don't they use an alternative implementation to avoid the conflict?
2. If the answer to #1 is yes, how does Apple avoid this problem? Are they also licensing from Microsoft? Or is Apple in some sort of a mutual cross-licensing agreement here to fight the common enemy Google?
>1. Are these generic, broad "idea" patents and hence there is nothing Google/OEMs can really do here to avoid licensing them? If not, why don't they use an alternative implementation to avoid the conflict?
no alternative implementation would help as it is not about some specific patents, it is more about [litigation] threat that some patents in the vast portfolio can be found that may be in some sense considered violated. Basically it is racket called Android Licensing Program - you pay "protection money" to MS in exchange for it not bothering you.
What interesting here is that Google seems to leave its OEMs to fend for themselves, thus instead of fighting one Google over 2B/yearly pot (the show that first row tickets for would sell like for Superball), MS extorts fifty million here and hundred million there which is much easier and safer.
> What interesting here is that Google seems to
> leave its OEMs to fend for themselves
This might have been a valid criticism a couple of years ago but at the moment I believe Google is defending claims by Microsoft against Motorola claiming that Android device makers don't need third-party patent licenses. So it certainly seems like they're doing their fair share to stand up to MS -- more than any other OEM (it's not like Samsung is some mom and pop shop that couldn't put up a fight).
MS attempts to do everything possible to hide what patents they use for protection racket. Most probably because those patents are garbage and can be otherwise invalidated. Barnes and Noble almost got to that point, but MS quickly bribed them to prevent that from happening. Unfortunately, besides B&N no one had the guts to fight these racketeers.
You are a bit confused. When Microsoft sued Barnes and Noble, the patents they were suing over were disclosed in their public court filings. Over a dozen were identified [1].
So they did disclose them? No doubt under pressure from B&N. If you look at those patents, you'll see that they are bizarrely trivial. Such things should never be patentable in the first place. Surely invalidating them can be not so easy, but it can be possible. It's one of the reasons why MS attempts to push NDAs as much as possible (we are lucky this was disclosed in those cases). Probably only a minority of their patents are non trivial, and most of these racket attacks are based on these kind of junk patents.
> If you look at those patents, you'll see that they are bizarrely trivial.
They may or may not be trivial, but I've only known the patent numbers for an hour, and you only knew them for 15 minutes when you posted--and it is not possible to have read them in sufficient detail to make such a judgement in that time.
To find out what a patent actually covers you have to read more than just the title and the abstract. The title and abstract are mostly useful for determining what a patent does not cover rather than determining what it covers.
The title just tells you the broad area the patent is in, and the abstract narrows that down a bit, but both will cover a lot of ground. That's why they are most useful for exclusion, not inclusion.
To find out what the patent actually covers, it is the claims that matter. The claims are interpreted in light of the specification, so you must read that to understand the claims.
For instance, a patent might have a title of "Acoustic Repelling of Mosquitoes", which seems really broad, but when you read the specification and claims, it might turn out that the patent only applies when the mosquitoes are a specific species, exactly three sound generators are being used, they are arranged in an equilateral triangle, the temperature is above 95F, and it is daylight.
(Actually, to really tell what is covered, you need to check the file for the patent from the patent office. The examiner and the applicant often go back and forth arguing over whether a claim should be allowed. The arguments and concessions the applicant makes to convince the examiner to allow the claim become limits on the claim).
Hmm, since we're on the topic, and IIRC you have experience in these matters, could you take a quick look at this comment of mine, and let me know if my take on it is inaccurate: https://news.ycombinator.com/item?id=6540902
Essentially, I looked at B&N's reply to Microsoft's complaint and it looked really weak to me. I wanted to know if my evaluation is wrong.
As an aside, the whole thread above that comment is pretty similar to this subthread.
Disclaimer: I am not a lawyer. I only went about 98% of the way through law school (I decided I'd rather be a programmer who knew a fair amount of law than a lawyer who knew a lot about programming, and never got around to completing a paper for my last class). I did get a close look at the whole patent suit process later, when a patent that I am a co-inventor on ended up involved in a lawsuit (not of my choice or with my approval), so I got to be deposed a couple times, answer a lot of questions from lawyers, and spend a month living in an annoying hotel in Texas for the trial, and while there got to talk a lot with the lawyers. If an actual lawyer steps in here to answer, take whatever they say over whatever I say.
OK, now that the disclaimer is done (and is longer than my answer, which will probably make people doubt my claim to not be a lawyer!), it looks to me like your take is accurate. Their answer does not give much detail.
Your speculation in the last paragraph, that this is normal for answers to complaints, is also correct I believe. The complaint and answer are not where the parties start to argue the case. The complaint is to tell the court what wrong you think was done to you, and why you think the court has jurisdiction over the defendant and over the subject matter.
The answer is to tell the court which things in the complaint that you concede are true, which you claim are false, and which you cannot answer at this time because you do not have enough information.
Basically, the complaint and answer together let the court know what it is dealing with.
The meaty details start coming in when the suit gets to the stage where the parties are filing pre-trial motions for things like summary judgement on various parts of the complaint, and later when the trial actually gets underway.
Ahh, that is very helpful, thanks. So my evaluation of their answer was premature, but I guess no more premature than those who would take it as an indication that "B&N sure showed Microsoft".
>2. If the answer to #1 is yes, how does Apple avoid this problem? Are they also licensing from Microsoft? Or is Apple in some sort of a mutual cross-licensing agreement here to fight the common enemy Google?
They are all in a sort of standoff, as they cannot sue each other without putting themselves at risk of counter-claims. In addition, there are a number of cross-licensing deals between various large patent-owning entities, as you correctly surmised. Microsoft found a way around these issues, by suing Android implementers (such as Samsung, HTC, etc.), who do not have such large patent portfolios with which to make a "second strike".
A good question, which probably is the reason why Google didn't drop Motorola case against MS (even though it wasn't a good one). But really Google can do more than that.
I wonder if (and how far) Steve Jobs was looking into the future when he did this, and how well, if at all, it has served Apple considering their more impressive innovations since then.
I would think Steve clearly saw the onslaught coming up and probably had an early director part as well - By end 90s MS had become a benefactor to Apple and both were no longer threats to each other. The enemy now was Google and its plans of global domination - I suspect, Steve - the master mind that he was saw the merits in ganging together against a common enemy.
It was common knowledge from early days that Android infringed on several OS and mobile patents. Also note Andy Rubin sold Android predecessor - Danger OS to MS along with all IP. It was just a question of when and how the IP assertion happens.
It isn't clear that Google is one of the companies who pays them. If Microsoft went after Google it seems like Google would have made a stink about it. Microsoft generally goes after companies they expect to be compliant (such as Amazon, who was already paying a patent fee for using Linux on their servers).
It seemed like in the past their method was to say they have patents covering X (in the past X was Linux) and you can license them for some specified amount. I don't think they were specific. If you refused, they would throw out some specifics and take you to court (see TomTom).
I haven't paid much attention to patents in the mobile space so I'm not sure if things have changed.
I'm pretty sure Apple has a cross-licensing agreement with Microsoft, they appear to be more focused on a common enemy these days.
> If the answer to #1 is yes, how does Apple avoid this problem?
For at least what is problem the main money maker for Microsoft's patent licensing, the patent or patents covering aspects of the FAT32 filesystem, Apple escapes liability because Apple does not use FAT32 in iOS. Android does use it (for removable media).
How can a company so shamelessly extract money (through forceful deals, no doubt) from an open source OS, and get away with it?
Linux companies dodged this bullet for the most part, from both Microsoft and SCU, but it seems Microsoft "succeeded" this time against Android with their mostly garbage patents in the same way patent trolls and mass-bittorrent lawsuits have succeeded so far - by scaring people/companies into paying up, without having to get into any lawsuit, which is exactly what patent trolls have been doing for a while.
As soon as B&N was about to invalidate some of their main patents, they quickly "invested" $300 million into B&N (i.e. they settled), and B&N dropped the lawsuit. I wish more OEM's would've had the balls to call their bluff.
So EFF - any proposals for stopping corporate patent trolls like Microsoft, Rockstar Consortium and Intellectual Ventures, yet?
> Linux companies dodged this bullet for the most part, from both Microsoft and SCU
It's worth noting that many of the patents asserted in the B&N case had nothing to do with mobile and were equally applicable to any form of Linux. The only reason MS did not assert them to quell Linux adoption is a) they did not need to and b) it would have been seen as anti-competitive. As such we've been kind of lulled into a false sense of security about the huge stockpile of stupid patents these early operating systems companies have built up. It's more or less like nuclear waste - lying around waiting for someone to build dirty bombs with it. And of course, since there is a clock ticking on the expiry of the patents, MS and others will start becoming increasingly keen to deploy them if only to extract value before the expiry.
My guess is that the device manufacturers see some legitimacy to Microsoft's claims, or at least fear a judge would. Perhaps if all the manufacturers banded together, well mainly Samsung, they could fight it. But if that would have been profitable, I'd assume it would have happened by now.
More realistic, device manufacturers understand that seeing a judge long enough to know his opinion (whatever it is) is more expensive than paying the protection racket.
I always thought HTC and Samsung were exempt from these royalties by releasing their own Windows Phones. That's why Samsung doesn't care at all about their WP offerings.
Samsung, HTC, Apple and Nokia should account for over 50% of the global market. If my assumptions are correct, are the rest of the smaller players able to pay that much money on royalties alone?
I'll like to see some numbers. The article is seriously lacking data.
There are all sorts of creative accounting maneuvers that can be done in order to hide the amount exchanging hands for various purposes. They can be exempt and still pay and then to be reimbursed (or receiving a heavy discount somewhere else they buy Microsoft licenses. Samsung buys a lot of Windows licenses for their PC business.
I don't think Microsoft has ever made a profit on Xbox, although I'm sure they've split up and distributed its losses to all sorts of divisions to hide that. They're about to do the same with Bing, too, now.
I've seen several "analysts" making this claim but they invariably include the original xbox losses in an effort to to make the profitable 360 business look bad. Examples:
Sony won the Blu-Ray vs HD-DVD war with the PS3. That may have been worth it.
Microsoft want to wrest control over your living room from the established consumer electronics companies (such as Sony...), much like Apple and Amazon.
The mobile phone business is essentially a cartel where only very big players are able to enter the market. Why is this allowed to exist? I couldn't start my own company and compete in this space.
Hopefully - and I really hope this - most of these patents are stupid stuff from the early days of graphical operating systems and are ready to expire in the next few years (given a 20 year lifespan for most patents).
From what I've read, in the US a patent is valid until 20 years after it is granted, retroactive to the date that it's filled. That can be a 40 years interval, or more, if the USPTO don't do it's job well (and I know of patents that did go over 30 years).
The problem is, frequently, the patents aren't on something you can engineer around; they're on a very broad idea and not on any specific implementation, e.g. pull to refresh. If you want to implement an interface that pulls down to refresh then you're technically infringing on Twitter's patent on it (though they have chosen not to enforce it). My understanding is there's no good way to engineer around it if you want the interface to pull and refresh.
Granted, you can get around that one with a button that refreshes, but what if the patents is, say, on "operating system provided tabs"? Or on "plotting search results on a map"? Or on "communicating multi-part messages"? Now you have a problem, and you're going to have to pay licensing fees since you need those things just to create your mobile OS.
The other problem has less to do with the patents themselves and more to do with the legal system surrounding them: it's incredibly expensive and quite risky to litigate software patent disputes. You're dealing with a court system that doesn't necessarily fully understand technical matters, leaving the outcome of litigating ambiguous even in the best of cases (and keep in mind that a loss could potentially end your entire product, since the courts could order that you must pay an extremely onerous licensing fee or cease infringing, either of which probably means closing up shop), and the cost of litigation is enormous. It's usually wiser just to settle for an acceptable licensing agreement than it is to try to engineer around the problem and fight the ensuing lawsuit by asserting that your solution is not subject to the patent.
Also, by my dangerously semi-informed understanding, B&N's defense looked really weak (see previous comment on same topic: https://news.ycombinator.com/item?id=6540902). I'd still like a real attorney to weigh in on my opinion, though.
So I really don't buy the "B&N scared Microsoft into bribing it" story. To me, it seems more like a "B&N tried a Hail Mary shot at getting an antitrust thing going against Microsoft, and when that failed miserably, they sold a cheap stake in their ebook business" story. Consider that ebook content is something Microsoft's ecosystem didn't (and still does not) have compared to Apple, Google and Amazon's ecosystems. Consider also that this ebook content comes without the lawsuits and publisher-wrangling the others had to go through.
So, $300M for a quick entry into a market where its competitors are incumbents seems like Microsoft got a pretty decent deal, and I think that patent lawsuit provided leverage.
...claims analyst, with absolutely nothing backing up their claim. The headline appears as if Microsoft accountants stated this as a fact, when in reality this is someone essentially reading tea leaves.
Further it's worth noting that the division that these Android royalties are attributed to also garners all other patent licensing royalties of any sort (e.g. FAT), as well as licensing charges such as ActiveSync licensing (ergo, every iPhone, among others).
Exactly. Rick Sherlund has a history of saying that Microsoft should be divided up, and Xbox should definitely be spun off [1, 2, 3]. He even said Samsung should take over Xbox division [4].
Even if MS earns $1 Billion from patents that exclude "legitimate" licensing, I think that would be a big number and definitely should be looked into.
Microsoft's divisions (most notably Xbox) have always had a huge dilemma: Do we act in a way that's best for our division, or do we maximize value for MSFT. From my time at Xbox, I can say with certainty that the implied actions for each choice are often not the same.
I think (and a lot of other would agree with me on this) that the Xbox division within Microsoft is the most customer-centric of any company in the entire world.
The people at Xbox are die hard gamers who really want to help you solve your problem whatever it might be. I don't know if spinning off one of the best divisions would be such a smart division specially when it is already profitable, unlike Bing.
Sherlund says that if you back out the Android profits, Microsoft is probably losing $2.5 billion on Skype, Xbox, and Windows Phone. Of that, $2 billion in losses are attributable to the Xbox platform.
He appears to be saying that the Xbox platform loses $2 billion per year. Everything I've read says that the Xbox has been profitable every year since 2008.
The only reason Xbox was 'profitable' was due to an accounting trick.
The Ultimate SKU of Windows commanded a premium license fee due to the inclusion of Windows Media Center, created by the eHome division. eHome, from an accounting perspective was part of IEB, the group that had the Xbox P&L.
I don't remember the exact license fees but Windows Vista Home was something like $30 and Windows Vista Ultimate was $75 to OEMs. That means for every copy of the Ultimate MS sold about $45 of revenue went to IEB from Windows.
When we envisioned eHome and Media Center we thought we were going to revolutionize the living room. Instead we ended up building a feature in Windows MS could charge more for.
I'm not surprised the XBox division is bleeding so much cash. Microsoft should never have gotten into the hardware business in the first place. Every time they release a new piece of hardware is cause for a face-palm.
15 years ago, when no console maker had a viable strategy for going online, MS should have built a cross platform solution that made online gaming possible for every console. Does that sound familiar? A cross-platform solution for a number of competing hardware makers?
This division would probably be a huge part of Microsoft's business if they had pulled it off. Just think of the leveraging possibilities if every gamer over the age of 25 had an XBox live account, instead of the much smaller subset of gamers over 25 who also owned a Microsoft console.
I think they're back on the right track with Windows phone, but Google already beat them to the cross-platform solution.
More seriously, I have a question for those who know more about this...
1. Are these generic, broad "idea" patents and hence there is nothing Google/OEMs can really do here to avoid licensing them? If not, why don't they use an alternative implementation to avoid the conflict?
2. If the answer to #1 is yes, how does Apple avoid this problem? Are they also licensing from Microsoft? Or is Apple in some sort of a mutual cross-licensing agreement here to fight the common enemy Google?