TomTom Realizes Microsoft's Pointy Patent Stick Is Too Sharp... Settles Patent Dispute

from the cheaper-to-settle-than-fight dept

Well, it looks like the ongoing patent battle between TomTom and Microsoft has come to a quick end, with TomTom caving. The company is paying Microsoft to "license" its patents, while dropping its own patent lawsuits against Microsoft. This really isn't too surprising. Microsoft's obviously got plenty of money to spend on just such a legal battle (exactly what the company counts on to get companies to pay up), so at some point, the calculation on TomTom's part has to be whether it's cheaper to fight or to just pay up. In this case (like so many), the company obviously felt it was cheaper to pay up, rather than fight what it believed were highly questionable patents. That's too bad -- but shows just why the patent system is so widely abused. It's almost always cheaper to simply pay up rather than fight -- which is exactly the sort of situation that Microsoft counts on, as it hypes up it's "successful patent licensing program," failing to concede that most of that licensing is done at the end of a large and very pointy stick.

What's still unclear, however, is how this settlement deals with the questions that were raised over GPL'd software used by TomTom. As we noted, the GPL license that covers components of TomTom's software forbid it from putting any restrictions on the distribution of the software. A deal with Microsoft could violate the GPL and cause trouble for TomTom down the road. Perhaps the company is betting that any legal battle on that front would be cheaper than fighting Microsoft's patent lawyers in court.

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And Here Comes The Patent Nuclear War: TomTom Sues Microsoft Back For Infringement

from the mutually-assured-destruction dept

For years, people in the software industry have noticed that patents have become the nuclear stockpiling of the tech industry. Lots of companies feel the need to stock up on as many patents as possible, not for any good reason -- but to have something to scare people off from suing, knowing that they'll get sued right back. This is especially true today, since almost no tech product can be seen as not violating a whole bevy of patents from others. But, of course, when you're dealing with a nuclear stockpiling for deterrence purposes, eventually, nuclear war breaks out. That seems to be happening with the patent lawsuit between Microsoft and TomTom. While there's been speculation that TomTom really can't settle, apparently it can launch the nuclear war. It's now countersued Microsoft, claiming that the company violates a bunch of its patents. And, once again, the only folks who win are the patent attorneys.

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TomTom Caught Between Microsoft Rock And GPL Hard Place

from the divide-and-conquer dept

Last month we covered Microsoft's patent infringement lawsuit against GPS device maker TomTom. As Mike noted, this is a pretty clear example of abusive patent litigation. The patents in question are so broad that it's virtually impossible to innovate in this space without first paying Microsoft for the privilege. Obviously, that prospect doesn't bother Microsoft's top patent lawyer very much, but it should be a serious concern for the rest of us. Since Mike wrote that post, another angle of the case has gotten a lot of attention from tech blogs: whether it's possible for TomTom to settle the lawsuit without running afoul of the GPL, the free software license that covers the Linux code that Microsoft claims infringes at least three of those patents.

A bit of background is helpful here. When the Free Software Foundation drafted version 2 of the GPL, it included a clause saying that if a vendor is forced to place restrictions on downstream redistribution of software covered by the GPL (due to a per-unit patent licensing agreement, for example), that vendor loses the right to distribute the software at all. This clause acts as a kind of mutual defense pact, because it prevents any firm in the free software community from making a separate peace with patent holders. A firm's only options are to either fight to invalidate the patent or stop using the software altogether. This clause of the GPL actually strengthens the hands of free software firms in their negotiations with patent holders. A company like Red Hat can credibly refuse to license patents by saying "we'd love to license your patent, but the GPL won't let us."

This creates a problem for a company like Microsoft that wants to extract licensing revenues from firms distributing GPLed software. Ordinarily, a patent holder sues in the hope that it will be able to get a quick settlement and a nice revenue stream from patent royalties. But the vendor of GPLed software can't settle. And if the patent holder wins the lawsuit, the defendant will be forced to stop distributing the software, depriving the patent holder of an ongoing revenue stream. Either way, the trial will generate a ton of bad publicity for the patent holder.

In a comment at the "Open..." blog, prominent Samba developer Jeremy Allison charged that Microsoft has tried to sidestep this agreement by basically forcing companies to sign patent licensing agreements that violate the GPL under the cover of non-disclosure agreements. Allison argues that TomTom got sued because it was the first company to refuse to participate in this fraud. It's important to note here that Allison can't prove the existence of these agreements, so we should take his claims with a grain of salt. But if these charges are ever conclusively proven, they would have explosive consequences. The Free Software Foundation would likely insist that such firms either cancel their agreements with Microsoft (likely triggering a patent lawsuit) or stop distributing GPLed software altogether (which could be a death sentence for a firm that relies on such software).

Regardless, TomTom is now stuck between a rock and a hard place. The GPL has left the firm with only two options. It must either fight Microsoft's patents to the death (literally) or it must settle with Microsoft and immediately stop distributing GPLed software. Given how deeply-entwined GPLed software apparently is in TomTom's products, that second option may be no option at all. So expect a long and bloody fight in the courts.

One likely result will be to create a serious PR problem for Microsoft. Some people might remember the infamous GIF patent wars of the 1990s. When Unisys tried to collect patent royalties on the GIF format, the Internet community responded by switching in droves to the PNG format. In the process, Unisys earned a ton of bad press and a terrible reputation among computer geeks who care about software freedom. Microsoft risks a similar fate if it pursues this litigation campaign against Linux. And given that Microsoft is in a business where innovation is king, it's probably not a good idea to become a pariah in a community that includes many of the world's most talented software engineers.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Microsoft Finally Reveals Some Of The Patents It Claims Linux Infringes... Sorta

from the here-we-go dept

For years, Microsoft has waved around the FUD stick concerning the 200+ patents it claimed to hold that Linux implementations supposedly infringed upon. However, when confronted, the company never seemed willing to name a single such patent. However, it looks like the company is starting to swing that stick with a bit more force. Horacio Gutierrez, Microsoft's "patent guy," fresh off a promotion, is suing navigation device maker TomTom over a variety of patents, including a few that relate to TomTom's implementation of Linux. Gutierrez has a somewhat troubling view on patents, where he believes that all tech companies should effectively be paying pretty much everyone else patent licensing fees before they can build any products. Rather than seeing that as a problem -- he thinks it represents a good thing. It's difficult to see what the benefit is in all that wasted money changing hands... other than it's probably what pays his salary. Not surprisingly, Microsoft is using the infamous ITC loophole to get two shots at forcing TomTom to pay up -- meaning that it's both sued the company in court, and gone to the ITC to have it try to block the import of TomTom products.

As for the patents themselves, looking them over, it's almost scary how broad they are. Some of them apply to basic in-car navigation features, while others focus on the file system TomTom is using (which is an implementation of Linux). If you'd like to look them over, here they are:

• Vehicle computer system with open platform architecture
• Method and system for generating driving directions (check out the claims on this one...)
• Methods and Arrangements for Interacting with Controllable Objects within a Graphical User Interface Environment Using Various Input Mechanisms
• Portable computing device-integrated appliance
• Vehicle computer system with wireless internet connectivity (would be great if some IP lawyers could explain how this one passes the KSR test for combining existing products)
• Common name space for long and short filenames (ditto concerning whether or not this passes the Bilski test concerning pure "software" patents)
• Common name space for long and short filenames (same name, slightly different patent -- same questions raised, however)
• Method and System for File System Management Using a Flash-Erasable, Programmable, Read-only Memory

It's those last three that apply to TomTom's implementation of Linux. While Gutierrez insists this is not Microsoft beginning its patent assault on Linux, anyone wondering about those mythical 200+ patents might want to start checking on those three patents first. Unfortunately, chances are that TomTom will just settle. No matter how strong a case it might have, it's going to be cheaper to settle, and that's exactly what Microsoft is counting on.

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TomTom's Attempt To Buy Tele Atlas Gets Even More Complex

from the thanks-EU,-you've-made-Garmin-happy dept

You may recall just how well GPS-device maker Garmin played the acquisition game last last year, forcing its main rival, TomTom to spend much, much more than originally intended in a deal for map maker Tele Atlas. Every step that Garmin took seemed to work to its advantage, first raising the bid for Tele Atlas, forcing TomTom to nearly double its bid, then buying up some Tele Atlas shares on the open market so that it's actually making a profit when it sells those shares to TomTom, and finally signing a long term deal with Tele Atlas competitor Navteq (which Nokia is acquiring). Following all this, Garmin must be giddy to find out that the EU has objections to the TomTom purchase which will force the company to make concessions. These objections won't scuttle the deal completely, but will (of course) make it somewhat less than what TomTom hoped it would be. Garmin must be thrilled.

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Well Played Garmin. Well Played.

from the check-and-mate dept

Sometimes you just need to stand back and applaud a strategy that works so well. Many people thought that navigation device provider Garmin would be in trouble earlier this year after its main rival TomTom agreed to buy mapping service Tele Atlas and Nokia agreed to buy TeleAtlas' only real rival Navteq. Potentially, that could have left Garmin without a mapping partner, though it seem difficult to believe that Nokia would cut off Garmin. However, Garmin tried to outbid TomTom for Tele Atlas while also buying up 5% of Tele Atlas' shares on the open market, leading TomTom to significantly increase its own bid, from the original $2.5 billion offer all the way up to $4.2 billion. People were waiting to see if Garmin would go even higher, but instead, it pulled a nice switcheroo. First, it worked out a settlement with TomTom on various patent lawsuits the two were fighting, and then went in for the kill. Garmin signed a long term deal with Navteq, guaranteeing access to its maps for the next 10 years (6 years, with a 4 year option afterwards) and then dropping its bid for Tele Atlas. In other words, Garmin doesn't have to worry about being shut out from mapping services for 10 years (at which point other options may be available), it doesn't have to pay $3.3 billion to buy Tele Atlas, it forced its main competitor TomTom to spend $1.7 billion more than it wanted to. And, oh yeah, it'll make back a bunch of money when TomTom takes over Tele Atlas, because that 5% stake that Garmin had acquired will get sold at a nice premium in the acquisition. Well played, Garmin. Well played, indeed.

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Garmin, TomTom Settle One Fight, In Order To Concentrate On A Different Fight

from the just-merge-and-get-it-over-with dept

TomTom and Garmin have been involved in a really nasty intellectual property battle over the past few years, involving multiple lawsuits over multiple issues in multiple locations. It really was a case of patent nuclear war, where both sides were throwing whatever they could think of at each other. However, now that the two sides have something more concrete to fight over than market share, it seems they've decided to settle all of their intellectual property battles and simply focus on fighting over who gets to own Tele Atlas. Of course, as some people are beginning to notice, this may be a pointless battle, as both companies are going to face increasing competition from the mobile device arena -- especially from the likes of Nokia who forced Garmin to bid for Tele Atlas after announcing the acquisition of Tele Atlas competitor Navteq. So it really might not matter who wins the battle for Tele Atlas, as the market for standalone navigation devices may start to disappear.

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Garmin Doesn't Want To Be Left Without Maps... Bids On Tele Atlas

from the musical-mapping-chairs dept

Over the summer, navigation device maker TomTom announced plans to buy Tele Atlas, one of the two leading providers of mapping data. Earlier this month, Nokia announced plans to buy Navteq, the other major provider. That resulted in immediate speculation about how Garmin (TomTom's main competitor) would respond. Apparently, the answer is with lots and lots of money. Garmin has now put in an unsolicited bid of $3.3 billion for Tele Atlas, hoping to outbid its rival by 15%. So, at this point, a game of musical chairs begins, with Nokia, Garmin and TomTom fighting it out over the two mapping data providers. Since both TomTom and Garmin seem to feel that they need to have Tele Atlas, don't be surprised to see the price keep going up.

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Nokia Finds The Shortest Route To Navigation Info: Buys Navteq For $8 Billion

from the turn-right-$8-billion-ahead dept

Nokia made a bit of a splash this morning by announcing plans to buy digital mapping/navigation firm Navteq for $8.1 billion. Navteq is definitely the leading player in the space, followed by TeleAtlas -- and the two companies basically dominate the market. Earlier this year, you may recall, navigation device maker TomTom announced plans to buy TeleAtlas, though that deal is not yet completed.

Many people are speculating on what this could mean for Garmin, TomTom's main rival in the navigation device space. Garmin uses Navteq for its maps, but it seems hard to believe that Nokia would simply cut off Garmin. That would take a huge chunk of revenue out of the deal, making it a lot less worthwhile. What's much more interesting is how this shows the strength of Nokia's commitment to really leveraging mobile devices for location-based services and navigation information. People have talked about such things for years, and Nokia's purchase certainly suggests that they're about to make a big push into moving navigation info and location-based services out of a separate device and into mobile phones.

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GPS Maker Hopes To Harness The Power Of The Community

from the g-p-us dept

The GPS navigation unit market is one that's largely commoditized, with little apparent differentiation to many consumers among products. It's also a highly competitive market, particularly for makers of standalone systems, who must compete against car manufacturers' built-in offerings, and now also against mobile-phone based systems. But TomTom, the world's biggest vendor of standalone GPS units, is hoping to set itself apart from its rivals by harnessing the power of its community of users. It's made a bid for Tele Atlas, a digital mapmaker, and once it owns the company and its maps, it will be able to incorporate all sorts of user-generated information into its maps and navigation units. Users will be able to notify the company of changes to roads and conditions, or to update information on points of interest, such as restaurants that have opened or closed. This sort of "crowdsourcing" has gotten a lot attention over the past few years, though many implementations of it leave a lot to be desired. But TomTom's idea could be a pretty good one. Not only does it help the company improve its products and differentiate from its rivals at a relatively low cost, users also derive a tangible benefit from participation in the way of updated and more accurate maps and info, so they have some incentive to participate.

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