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A Brief Explanation of Microsoft's Anti-Google Patent FUD ~ by pj
Friday, August 05 2011 @ 09:36 PM EDT

The trouble with FUD is at first it sounds correct, or at least plausible. So when Google complained about the Apple-Microsoft partnership and the deliberate patent policy against Google, Microsoft's first response sounded like a killer blow. It said it had asked Google to join them. But… let's take a little bit closer look, because in doing so, it let slip a fact that we did not know until now -- that Google tried to get the 800 or so Novell patents that CPTN, an entity Microsoft set up with Oracle, Apple and EMC, eventually won.

That revelation tells us the most fundamental fact about patent law in the US today -- namely that even if you have as much money as Google, you can't freely innovate and provide fabulous products because the patent thicket is so dense already and the Proprietary Patent Club is joining hands to keep any newcomer out of the competition. And that's exactly why articles about Google "whining" or viewing this as just a verbal war are missing the point Google was making, namely pointing out that it can be *illegal* to use patents for an anticompetitive purpose. There's a line, and Google is indicating that it thinks that line has been crossed.

As we saw in the Novell patent scenario, the Department of Justice agreed that the deal was not acceptable, intervening to protect the Open Source community, so it understood the danger and altered what Microsoft in particular was allowed to do with the patents it arranged to buy.

So Google isn't dreaming. This is antitrust reality and that may be why Microsoft took Google's initial complaint seriously enough to respond.

This isn't about patents. It's about antitrust.

Some Details

Notice what Google's initial complaint was:

But Android’s success has yielded something else: a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents.

They’re doing this by banding together to acquire Novell’s old patents (the “CPTN” group including Microsoft and Apple) and Nortel’s old patents (the “Rockstar” group including Microsoft and Apple), to make sure Google didn’t get them; seeking $15 licensing fees for every Android device; attempting to make it more expensive for phone manufacturers to license Android (which we provide free of charge) than Windows Phone 7; and even suing Barnes & Noble, HTC, Motorola, and Samsung. Patents were meant to encourage innovation, but lately they are being used as a weapon to stop it.

So the issue Google was highlighting was a joining together of the big boys with the goal of making Android cost more, so people would be less inclined to get one. Is that what patents are for? I mean, legally, is that the purpose of patents? As examples, it cited two events, the CPTN buy of Novell's patents and the Rockstar purchase of the Nortel patents. Both CPTN and Rockstar are nyms for the group of proprietary big boys, led by Microsoft and Apple.

Google's complaint is that this is illegal conduct, not that it's unfair or mean, although it likely would say it's all of the above:

This anti-competitive strategy is also escalating the cost of patents way beyond what they’re really worth. The winning $4.5 billion for Nortel’s patent portfolio was nearly five times larger than the pre-auction estimate of $1 billion. Fortunately, the law frowns on the accumulation of dubious patents for anti-competitive means — which means these deals are likely to draw regulatory scrutiny, and this patent bubble will pop.
Patents are not granted for the purpose of anticompetitive strategies. A patent bubble is not the purpose of patent law either, since it works against customers, not just Google and the market in general. It's an artificial bubble, created not by intellectual property valuation of the patents but what the patents are worth to companies desperately trying to block Google's success in the market.

I think one could even make an argument that the patent bullies are showing unpatriotic conduct, in that making things artificially more costly in the current economy is definitely not helpful.

Brad Smith, Microsoft's general counsel, then responded on Twitter:

In response, Brad Smith, Microsoft’s general counsel tweeted, “Google says we bought Novell patents to keep them from Google. Really? We asked them to bid jointly with us. They said no.” A follow-up tweet from Frank Shaw, Microsoft head of communications, added: “Free advice for David Drummond – next time check with Kent Walker before you blog ”
Here's his tweet. Shaw's is here, and he included an email, dated October 28, 2010, from Google to Microsoft that read like this:
Brad –

Sorry for the delay in getting back to you — I came down with a 24-hour bug on the way back from San Antonio. After talking with people here, it sounds as though for various reasons a joint bid wouldn’t be advisable for us on this one. But I appreciate your flagging it, and we’re open to discussing other similar opportunities in the future.

I hope the rest of your travels go well, and I look forward to seeing you again soon.

– Kent

This is one lawyer politely rejecting another lawyer's offer. I will let Google translate it for you, in their update to the first blog complaint:
It's not surprising that Microsoft would want to divert attention by pushing a false "gotcha!" while failing to address the substance of the issues we raised. If you think about it, it's obvious why we turned down Microsoft’s offer. Microsoft's objective has been to keep from Google and Android device-makers any patents that might be used to defend against their attacks. A joint acquisition of the Novell patents that gave all parties a license would have eliminated any protection these patents could offer to Android against attacks from Microsoft and its bidding partners. Making sure that we would be unable to assert these patents to defend Android — and having us pay for the privilege — must have seemed like an ingenious strategy to them. We didn't fall for it.

Ultimately, the U.S. Department of Justice intervened, forcing Microsoft to sell the patents it bought and demanding that the winning group (Microsoft, Oracle, Apple, EMC) give a license to the open-source community, changes the DoJ said were “necessary to protect competition and innovation in the open source software community.” This only reaffirms our point: Our competitors are waging a patent war on Android and working together to keep us from getting patents that would help balance the scales.

Again, Google is pointing to the main issue, not that Microsoft and its satellite helpers are meanies, but that what they are doing is *illegal*. They are attacking the open source community, with patents as the weapon and not just as individual companies but as an artificial group designed to "strangle" Android. And if you look at the mobile litigation going on as we speak, ask yourself: who is suing and who is being sued? Does it look coordinated to you?

It does to me. It's always the same direction. Android gets sued. Sometimes it's the vendors. Sometimes it's Google. Does that mean Google is casual with patents? Ask any engineer or any lawyer in the tech space whether it's possible to make any software product today without violating someone's patents, and they'll say no. It's no longer possible, and in fact, it's so complex and stupid now in the US patent law space, it's not even possible to know in advance if you are doing so. Look at the Lodsys patents. Could any rational person have anticipated getting sued by Lodsys using those patents? Hardly. They don't describe what Apple and Android apps developers do.

But it happened. How about the Paul Allen patents? They seem to be falling like dominoes currently, on reexamination, so people are being accused of infringing what it turns out are likely not even valid patents. Same with Oracle's patents asserted against Google. Most of them on reexamination are now declared invalid.

How do you protect yourself from that? Google's blog post pointed out that a smartphone is such complicated technology that it could result in as many as 250,000 patent claims, most of them "questionable". Now do you understand why Google used the word "strangle" when saying that is what competitors were trying to do to Android? What company in the world could withstand that much litigation? That is already happening, of course, as we see Android vendors and Google being sued over patents that don't stand up to reexamination.

So if people are willing to assert invalid patents in litigation, how do you prepare for that?

You can't. No matter how diligent you are to avoid stepping on anyone's toes, someone will sue you, because the twisted patent system lets them. It's your burden to prove the patents invalid, on your dime. All you can do is react. You can file for reexamination, showing prior art, which is what has been happening. And one traditional way to defend yourself when prior art won't work is to counterclaim with patents of your own, so that at least you can get a decent settlement instead of paying over millions or even billions. It creates a better environment for settlement. And that is what Google was looking for, some patents of its own to use for defense. Had it signed on with Microsoft, it would have meant it could no longer do that. It was, as Google pointed out, a trap. Does that not clarify why Google would try to buy up these patents, even if they thought they were bogus? Obviously, they are trying to minimize how many stupid patents are used as weapons against them and their partners. Is it not ridiculous to have to come up with a way to avoid being sued over bogus patents?

And how cynical for Mr. Shaw to tweet that Google wanted to buy the patents to sue people:

Why? BECAUSE they wanted to buy something that they could use to assert against someone else.
Hardly. Who is Google suing for patent infringement? Got a list? Anyone? Bueller?

Journalists missed that. But Carlo Piana, the lawyer who successfully represented Samba and FSFE in the antitrust litigation against Microsoft before the EU Commission, tweeted, in part:

So msft, appl et al tried to have goog pay a share of Nortel patents goog needed for counter-warfare, just to neutralize them in a cross license, and wonder why it refused? Is Brad an amateur or does he think we are all stupid?
Well. He's not an amateur. The lawyers get it. It was a trap, but looking at media accounts of the dispute and how almost everyone has missed the point that this is about antitrust law, not patent law, I would guess, if I have to choose one or the other, it's the latter, that he thinks we are all stupid.

The New Information:

Because Microsoft was willing to publish a private Google email, without permission, and not in litigation, which I find disturbing, we learn that Google evidently also tried to buy the 800 Novell patents. I didn't know that. I'm glad to know that someone not on the Dark Side tried to get them.

How do we know it was Novell's patents? The Microsoft FUDsters wrote both, Novell and Nortel, but I checked, and it has to be the Novell patents in the email. Here's why I think so. The date of the offer by Microsoft was October 2010, judging by the email, or perhaps September. The announcement that Nortel would sell its 6,000 patents didn't happen until April 4, 2011, so the offer has to be to share the Novell patents. They were on the market in the October 2010 time period, as you can see in the Novell SEC filing you can find here, and sold in December.

But that is disturbing also. If Google doesn't have enough money to buy up patents, who does? Twice it has tried and been outbid, not by a single competitor but by a group of them joining together. In fact, that's where, to me, the real antitrust issue surfaces, that by joining together to squeeze Google out of two auctions, Google's competitors appear to have been plotting against it in ways that really must invite scrutiny, which, by all reports is now happening again.


  


A Brief Explanation of Microsoft's Anti-Google Patent FUD ~ by pj | 319 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections
Authored by: alisonken1 on Friday, August 05 2011 @ 09:44 PM EDT
Put a quick correction in the title, then fill out where at in the comment
block.

---
- Ken -
import std_disclaimer.py
Registered Linux user^W^WJohn Doe #296561
Slackin' since 1993
http://www.slackware.com

[ Reply to This | # ]

A Brief Explanation of Microsoft's Anti-Google Patent FUD ~ by pj
Authored by: Anonymous on Friday, August 05 2011 @ 09:58 PM EDT

Uhh....

How do we know it was Novell's patents? The Microsoft FUDsters wrote both, Novell and Nortel, but I checked, and it has to be the Novell patents in the email.
You know, you really didn't have to check much. Here it is in the "FUDster's" tweet itself that you quote a few lines up (emphasis mine):
“Google says we bought Novell patents to keep them from Google. Really? We asked them to bid jointly with us. They said no.”
Can't blame you though, "Nortel" is what I though myself initially. There's been so much sensationalization and mis-representation in the blogosphere following this cat-fight, it's easy to get confused.

[ Reply to This | # ]

Off-topic
Authored by: alisonken1 on Friday, August 05 2011 @ 10:06 PM EDT
Remember clickies and don't forget the "HTML" Mode when posting
clickies.

Also - "Preview" is your friend.

---
- Ken -
import std_disclaimer.py
Registered Linux user^W^WJohn Doe #296561
Slackin' since 1993
http://www.slackware.com

[ Reply to This | # ]

A Brief Explanation of Microsoft's Anti-Google Patent FUD ~ by pj
Authored by: Anonymous on Friday, August 05 2011 @ 10:10 PM EDT
If Google is rich it could buy the patent bundle!
Why did it not use a Google plex number!
That how auctions work you bid till you win or run out of money!
Why is Google not complaining about the seller getting more money.
Auctions are the best part of free enterprise -- you want a Picasso you have to
out bid the others that want it!And don't cry to all that the MOMA out bid you!

[ Reply to This | # ]

A Brief Explanation of Microsoft's Anti-Google Patent FUD ~ by pj
Authored by: Anonymous on Friday, August 05 2011 @ 10:22 PM EDT
Interesting timing for the anti-trust complaints against Google. Paint them as
the bad guys, make them reserve a lot of cash just in case. Cast doubt and shame
, look at this hand while the other does the dirty trick.

Tufty

[ Reply to This | # ]

A Brief Explanation of Microsoft's Anti-Google Patent FUD ~ by pj
Authored by: Anonymous on Friday, August 05 2011 @ 10:50 PM EDT

PJ writes: "I'm glad to know that someone not on the Dark Side tried to get them." So Google, whose CEO patented the idea of changing a website logo periodically to celebrate anniversaries of various events, if not on the Dark Side of the patent system?

PJ also writes: "even if you have as much money as Google, you can't freely innovate and provide fabulous products because the patent thicket is so dense". So Android first clones the Blackberry. Then Apple releases the iPhone, and Android redoes the interface to clone the iPhone instead. THIS is the innovator?

I hate software patents, but the notion that Apple can come out with the iPhone, which was crazy different than anything else on the market, and then Google can use its search monopoly profits to release a free clone and provide continuous engineering effort to take away much of Apples potential success, is a difficult notion to swallow.

Maybe it's just me, but one company using it's monopoly money to release a free product to compete with an innovator seems.... familiar somehow.

I see no white hats in this saga.

[ Reply to This | # ]

Good article, except...
Authored by: pem on Friday, August 05 2011 @ 11:30 PM EDT
Patents have always been used in this fashion.

This is nothing new.

The only new thing is that more people can see the abuses more easily.

But even now, a lot of people willfully misunderstand.

Patents have very seldom benefited the lone inventor. Ask Philo Farnsworth, or
Edwin Armstrong, or Almon Strowger, or Nikola Tesla (the latter famously screwed
by Edison).

[ Reply to This | # ]

A Brief Explanation of Microsoft's Anti-Google Patent FUD ~ by pj
Authored by: Anonymous on Friday, August 05 2011 @ 11:36 PM EDT
" I'm glad to know that someone not on the Dark Side tried to get
them."

Why do you thin that Google is not on the Dark Side? Together with FB, Google is

the most dangerous companies today.

[ Reply to This | # ]

newspicks thread
Authored by: designerfx on Saturday, August 06 2011 @ 12:14 AM EDT
newspicks discussion here

[ Reply to This | # ]

Is this "patent-tax" on Android primarily just in the US market?
Authored by: gard on Saturday, August 06 2011 @ 12:47 AM EDT
Hi,

Any alleged/FUD patent threats to Android presumably don't apply
in Europe, where the law does not recognize software patents,
isn't it? How about the huge BRIC markets
(Brazil/Russia/India/China)? Do they recognize software patents?
According to wikipedia
(http://en.wikipedia.org/wiki/Software_patent), India does not.

If some or all those other countries are safe for Android from
such patent attacks, is the US market still worth enough for
phone makers to fork over $5 ~ $15 in license fees? Even so,
shouldn't any such fees apply only to units shipped to markets
where software patents are enforceable?

If phone makers actually do the above, the US consumers would be
the losers, as the rest of the markets will have more vendor and
technology choices and lower pricing unencumbered by the software
patent regime.

gard

[ Reply to This | # ]

Apple fighting Loadsys could be FUD
Authored by: Anonymous on Saturday, August 06 2011 @ 12:53 AM EDT
Apple jumping in to defend its platform developers against Lodsys could be an
oblique way to reinforce a variant of FUD.

Just use Lodsys and the courts to spread fear over a bogus patent that Apple
licenced from Lodsys, giving them funds to go the litigation route. Then, on the
steps of the court before any judgment is made re the patent itself, come to an
amicable arrangement with Lodsys on behalf of Appstor developers.

The end result is the same, use the Apple platform rather than Android platform
and the developers will be protected.

[ Reply to This | # ]

A Brief Explanation of Microsoft's Anti-Google Patent FUD ~ by pj
Authored by: IMANAL_TOO on Saturday, August 06 2011 @ 02:23 AM EDT
"That revelation tells us the most fundamental fact about patent law in the US today -- namely that even if you have as much money as Google, you can't freely innovate and provide fabulous products because the patent thicket is so dense already and the Proprietary Patent Club is joining hands to keep any newcomer out of the competition. "

Microsoft wasn't part of the "telecom club" in the 1990s. But, due to their wealth they bought themselves into it, step by step. Here is a press release from 1999 where Microsoft had just bought a small firm for $125,420,000; See a larger list at Wikipedia. Microsoft closed that shop just three years later and a whopping 80 staff were layed off. $125,420,000 for 80 staff. Those were the days. Now Microsoft is back, but for real, due to the Nokia CEO, a former Microsoft evangelist. You don't need to innovate! Money talks and you can buy yourself into that Proprietary Patent Club.



---
______
IMANAL


.

[ Reply to This | # ]

Bring sanity back to the patent system
Authored by: dht on Saturday, August 06 2011 @ 02:33 AM EDT

There is no doubt the patent system is no longer serving it's intended purpose. But what kind of fair measures can be taken to bring sanity and equality back into the system?

The system has gotten out of whack because of loose wording in legislation and stretching the interpretation of that legislation in granting patents and in law. Changing legislation is a slow and time consuming process. But there might be a way to "tweak the system" in the legal processes.

  • Make it automatic that every patent used in litigation must go though a reexamination before it is considered by the courts.
  • Expenses for every patent or claim that fails reexamination is reimbursed by the patent holder.

This should make it easier, and cheaper, to defend against bogus patents. It will also make it a bit more expensive for the defense if the patent claims survive reexamination.

It might also make the patent examiners a bit more cautious in granting questionable patents in the first place. If they end up reexamining the same patent dozens of times as a prelude to court cases, it should be a warning bell that many other smart people think the patent is bogus.

Does anybody have better suggestions on ways to get the system moving back to where it should be?

[ Reply to This | # ]

FUD is always clearer in FM ...nt
Authored by: Ian Al on Saturday, August 06 2011 @ 04:03 AM EDT
.

---
Regards
Ian Al
Patented inventions must be obvious. You could never work them out from the
patent disclosures.

[ Reply to This | # ]

Still unclear why Google didn't buy Novell patents
Authored by: Anonymous on Saturday, August 06 2011 @ 07:29 AM EDT
I'm sorry PJ but it's still unclear to me why Google didn't join a bid for the
Novell patents:

Suppose they did and Microsoft + Google were now both part-owners. Part-owner
Microsoft can now sue HTC, Samsung etc. for patent infringement with their
Android phones.

But all Google has to do is, declare that HTC and Samsung and all Android
manufacturers get a free license to use those patents, from the part-owner
Google.

Why wouldn't this be a possibility?

[ Reply to This | # ]

A New Concept: IP Cartels
Authored by: Anonymous on Saturday, August 06 2011 @ 09:57 AM EDT
Antitrust has usually been used against "Cartels"... but no one has
considered that IP-- both copyrights and patents-- can be hoarded by a cartel.

One of the greatest problems we have these days is that bean-counters, in order
to make the books look better, are driven to finding ways to make IP a
"tangible asset" rather than an intangible.

Heck, most corporations seem to consider their employees as liabilities rather
than assets, simply because many of the values a person brings to a company--
imagination, initiative and fealty-- are intangible.

Intellectual Property is also being treated as a tangible good even though
violations are more of an easement than an out-and-out taking.

[ Reply to This | # ]

US only patent?
Authored by: Anonymous on Saturday, August 06 2011 @ 11:58 AM EDT
AFAIK, the patents used against Android are registered in the US only. So when a
non-US company sells to a country other than the US, it shouldn't have to worry
about these patents, right? E.g. the Microsoft tax on HTC and Samsung phones
should be only for phones sold to the US, not the rest of the world. And even if
Oracle should win and prohibit sales of Android devices, they could still be
sold in the rest of the world? The FUD against Android would be severely
weakened if this is true, because most Android devices would still be profitable
even if they could "only" be sold outside USA. Also, US citizens might
get a clue about the current patent regime if we made clear that it is
<i>they</i> who have to pay the Microsoft/Oracle/Apple tax, and not
people in other countries.

This is a serious question, and I would be very grateful for a real answer
instead of mere whining and speculations.

[ Reply to This | # ]

  • US only patent? - Authored by: Anonymous on Saturday, August 06 2011 @ 12:33 PM EDT
    • US only patent? - Authored by: pem on Saturday, August 06 2011 @ 12:36 PM EDT
      • True - Authored by: Anonymous on Saturday, August 06 2011 @ 12:48 PM EDT
    • US only patent? - Authored by: Anonymous on Saturday, August 06 2011 @ 04:44 PM EDT
  • US only patent? - Authored by: pem on Saturday, August 06 2011 @ 12:34 PM EDT
  • US only patent? - Authored by: Anonymous on Saturday, August 06 2011 @ 03:51 PM EDT
A Brief Explanation of Microsoft's Anti-Google Patent FUD ~ by pj
Authored by: Anonymous on Saturday, August 06 2011 @ 01:32 PM EDT
The problem is not Google's weak patent portofolio. The problem is the
bogus patent system. If Google was any better than MIcrosoft, Apple and
friends, they would target the real issue, not just their own interest to be in

the Golden Boys gang. Google is no the exact same dark side as
Microsoft, Oracle, Apple and the rest. They just happen to have a weak
hand when it comes to Android. There is no reason for sympathy. If they
are looking for good karma they should push for a patent system
reformation that would help everyone in the industry.

[ Reply to This | # ]

The Problem is Google
Authored by: Anonymous on Sunday, August 07 2011 @ 06:49 PM EDT
Google isn't a champion of open source software. It uses "open" like
a wolf
wearing a sheep's fur coat. Android software isn't fully open - Google's apps
are not. Whatever is open is open because of Linux, not Google.

And Google is willing to trample on the rights and inventions of others. Just
look at its email versus Oracle.

Looks like - via fosspents.blogspot.com - that Google is going to lose its case

versus Oracle:

"Judge Alsup -- the federal judge presiding over this litigation --
attaches a
great deal of importance to that particular document. At a recent hearing, he
essentially said that a good trial lawyer would just need that document
"and
the Magna Carta" (arguably the origin of common law) to win this case on
Oracle's behalf and have Google found to infringe Oracle's rights willfully. The

judge told Google that "you are going to be on the losing end of this
document" with "profound implications for a permanent
injunction". Let me
add that a finding of willful infringement would not only make an injunction
much more likely than otherwise. It can also result in a tripling of whatever
damages will be awarded."

[ Reply to This | # ]

An easy way to fix the broken system?
Authored by: hAckz0r on Sunday, August 07 2011 @ 07:50 PM EDT
What if we changed the laws regarding patent purchases. First, when you
purchase a patent you are only purchasing the right to use the patent.
Only the owner should be allowed to sue for infringement.

The purpose of the patent system is primarilly intended to put money in
the pocket of the inventor, and currently when an IP buyer goes on to sell
a patent to an extortionist cartel it puts no money in the inventors pocket.
None. The patent has already been disclosed so others can build upon it,
and there is no furthur benefit to society what so ever. After a patent is
taken out of the hands of the original inventor the patent is no longer
benifiting society. Period.

Patents should only be licensed for use, not change ownership, and only
licensed by the original inventor or their legal proxy. This will keep the
money where it was intended to be, and remove the ability for others to
use it as a weapon of extortion.




---
DRM - As a "solution", it solves the wrong problem; As a "technology" its only
'logically' infeasible.

[ Reply to This | # ]

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