Ever since Google decided to stick with Motorola Mobility's existing patent fights with various companies, I've been wondering why they did so. Here was a chance for Google to take the high road and actually live up to what it had been claiming concerning the problems of patents. But, instead, it's basically continued to try to use patents as a weapon. The fight against Microsoft has been particularly silly. While Microsoft did initiate things, Motorola's decision to fight back had seemed dubious from the start. Being a patent bully is no way to run a long-term business, and that's doubly true when you're a company telling people how broken the patent system really is.
And yet, Motorola Mobility pushed on against Microsoft... and it's not going well. On Friday, a judge knocked the damages down to next to nothing, basically siding with Microsoft. Microsoft had argued that if there were any infringement, the amount owed should be about $1.2 million. Motorola Mobility had argued for... $4 billion. The judge came down at just $1.8 million.
I recognize, of course, that the whole reason that Google bought Motorola Mobility was to get access to these patents. And, on top of that, Microsoft did strike first here. However, Motorola Mobility had hit back quite strongly, and even once Google was in control, it seemed to have little interest in pulling back. The whole thing makes Google look a bit hypocritical, and it certainly hasn't helped the company win any of these legal battles.
We recently posted about an absolutely ridiculous NY Times op-ed piece in which Pat Choate argued both that patent laws have been getting weaker, and that if we had today's patent laws in the 1970s that Apple and Microsoft wouldn't have survived since bigger companies would just copy what they were doing and put them out of business. We noted that this was completely laughable to anyone who knew the actual history. A day or so ago, someone (and forgive me, because I can no longer find the tweet) pointed me on Twitter to a 45 minute excerpt from a documentary about the early days of Microsoft and Apple and it's worth watching just to show how laughably wrong Choate obviously is.
There are two key themes that stand out incredibly strongly in this: both Microsoft and Apple did an awful lot of what they did by shamelessly copying the work of others, and the big companies floating around the space (mainly IBM and Xerox) clearly had no clue at all about what was going on. The few times they discovered interesting things, they didn't know what to do with them, and let Microsoft and Apple walk all over them to build something better that people wanted. And when they tried to jump into these markets by copying the work of Apple and Microsoft, they tended to do a really bad job of it. On the copying front, while most people are familiar with Apple copying the GUI from Xerox, less well known is the story of Tim Patterson at Seattle Computer Products reverse engineering CP/M based on understanding CP/M's APIs to create the early versions of DOS that Microsoft licensed to IBM.
Also noteworthy: no discussion of patents at all. At the very end of the clip there's a bit of a discussion from former Apple CEO John Sculley concerning Apple's legal fight with Microsoft over the look and feel of the GUI. He mentions there was nothing patentable, but that they felt it was a copyright violation. However, he also notes that Apple's strong belief that they could stop Microsoft via copyright also led to complacency within Apple, and less focus on competing by innovation.
In other words, the claims Choate makes are laughable. There was little to no reliance on patents during the early days, and a very strong culture of copying anything and everything, while competing by trying to out-innovate each other. Furthermore, big companies couldn't figure out what was going on, even if they wanted to copy these successful upstarts. At one point, Larry Ellison jokes about how IBM stupidly ceded the chip market to Intel and the OS/application market to Microsoft when it could have owned it all.
One point about the video. The YouTube link says this is from the "documentary" Pirates of Silicon Valley. That's incorrect. If I remember correctly, Pirates of Silicon Valley was actually a "TV movie" based on the same subject material, with Noah Wylie playing Steve Jobs and Anthony Michael Hall playing Bill Gates. Instead, I'm pretty sure that the clips are actually from the documentary Triumph of the Nerds, put together and narrated by Mark Stephens, who is better known as Robert X. Cringely (there's another interesting historical story about the legal fight over the Cringely name, but that's a totally different tangent). This documentary actually came out in 1996, so it's interesting to see how it mostly predates the internet (though there is some discussion of the internet), Jobs' return to Apple and a variety of other things that happened over the past 15 years. Either way, it should put to rest Choate's silly claims.
The problems of monopolies arising through network effects, and the negative effects of the lock-in that results, are familiar enough. But it's rare to come across an entire nation suffering the consequences of both quite so clearly as South Korea, which finds itself in this situation thanks to a really unfortunate decision made by its government some years back:
At the end of the 1990s, Korea developed its own encryption technology, SEED, with the aim of securing e-commerce. Users must supply a digital certificate, protected by a personal password, for any online transaction in order to prove their identity. For Web sites to be able to verify the certificates, the technology requires users to install a Microsoft ActiveX plug-in.
It forced consumers to use Internet Explorer because it was the only browser ActiveX plug-ins were compatible with. By default, Web developers optimized not only banking and shopping Web sites for Internet Explorer, but all Web sites. For developers, this just seemed logical.
The result has been a decade-long monopoly in the Korean market, where virtually all Korean Web sites are optimized for Internet Explorer.
Eventually, the South Korean government noticed that it was totally out of step with the rest of the world in effectively forbidding important alternative technologies like iPhones or Android, and took steps to remedy the situation:
A bylaw was created that said government Web sites must accommodate at least three different Web browsers and in 2010 they withdrew the mandate governing the use of ActiveX plug-ins.
But there was a catch.
If a company wants to stop using ActiveX plug-ins, it has to use an alternative technology that offers the same level of insurance. To get approval to use such a technology, they have to get approval from a government appraisal committee. The committee was formed over a year ago and has yet to make a single approval.
So even though the possibility of using something other than ActiveX is there, in practice there are simply no other options for secure transactions. A choice taken a decade ago to standardize on one technology has locked an entire nation into that platform, and it's proving extremely hard to escape.
And it's not just the local coders that are suffering: businesses, too, are hamstrung when it comes to innovation. As Kim Kee-chang, founder of the OpenWeb organization dedicated to expanding Web accessibility in Korea, explained:
"If people are thinking of opening up some service ultimately connected to payment they really have no chance in Korea," Kim said. "They are stuck in the payment stage and even if they could make it in Korea, they'd have little hope in an international market."
It's a classic lock-in due to network effects, aided and abetted by a thoughtless government decision all those years ago. As South Korea falls further and further behind in this regard, trapped in its fossilized world of ActiveX, it may well come to be seen as warning to other governments to adopt true open standards, if they want to avoid a similar fate.
Our own Glyn Moody has been doing some digging and has come up with some interesting info about how Microsoft has been trying to derail an effort in the UK by the government to use open, royalty free standards wherever possible. Microsoft, apparently went on the offensive, arguing strongly that the government should reconsider and also include FRAND (fair, reasonable and non-discriminatory) licenses. FRAND is better than nothing, but it's not royalty free, and can certainly limit access to information for those who cannot afford to pay. But what's impressive is how much Microsoft tries to demonize royalty free offerings -- even as it admits in its initial letter than it contributes to "dozens" of royalty free standards.
Moody also notes that Microsoft is misleading in trying to show just how popular FRAND is in open standards when it comes to software:
In a further attempt to downplay RF standards, the letter claims:
one recent study found that a typical laptop contains over 250 technical interoperability standards - with 75% of these being developed under FRAND terms, and only 23% under Royalty Free terms.
we created a set of broad categories - display, graphics, sound, storage, BIOS, input device, processor, power, file system, networking, wireless, I/O ports, memory, software, codecs, content protection, security and “other” - and sought relevant standards.
As this makes clear, those "250 technical interoperability standards" were mostly about hardware interoperability. Of the purely software standards a far greater proportion were in fact made available under RF terms. Even more interesting, those RF-licensed standards included many of the absolutely core ones like HTML5, HTTP and HTTPS.
In other words, when it comes to software, the royalty free stuff is the core software that's used to power much of the internet itself. But Microsoft goes on to suggest that royalty free software is somehow limiting, mainly by highlighting some confusion people have had with the open document format. It's the typical Microsoft play: spread FUD to try to push people to its (more costly) solutions. Apparently competing on the merits is just too difficult.
Just a few weeks ago, we had mentioned reports that AOL was looking to sell its patents. Sometimes, those kinds of things take a while, and may even involve auctions and whatnot. However, it looks like AOL got the deal done quickly, selling over 800 patents to Microsoft for just over $1 billion. The "good news" here is that the patents don't end up in the hands of a pure patent troll, who will do nothing but sue over them. The bad news, of course, is that Microsoft is quite aggressive in suing others for patent infringement anyway, and you can expect some of these patents to start showing up in wasteful, innovation-hindering lawsuits before too long. And, of course, there's the natural dead-weight loss of a ton of money going into buying patents, rather than directly into actual innovation.
Of course, there's an interesting twist in all of this. Peter Kafka notes that Microsoft basically bought all Netscape assets outside of the name/trademarks, etc. From a historical standpoint, that's pretty interesting, seeing as how big the early internet battle was between Microsoft and Netscape for who would win the war to control the window into the internet. It would then be especially ironic (and ridiculous) if Microsoft used those patents to sue others, after spending so much time trying to kill off Netscape... Such is the bizarre world of patents these days, I guess.
It's difficult not to look cynically at Microsoft's latest move to file an antitrust complaint in the EU over Motorola's patent royalty rates, and think about just how obnoxiously hypocritical Microsoft is being as a company on this particular issue. First off, Microsoft has become a pretty significant patent aggressor over the past few years, filing lawsuits and pressuring companies to pay up. It's also been a huge fan of patent FUD -- especially against open source competitors. Most people assume that Microsoft was the main player behind SCO's quixotic (but costly and distracting) legal battle against Linux. Then, of course, every so often Microsoft officials insist that Linux infringes on a bunch of its patents, but it never wants to make clear which ones. More recently, of course, Microsoft has been demanding license fees for its patents from a variety of companies making use of Android -- to the point that some have argued Microsoft makes more off each Android installation than each Microsoft Phone installation.
Of course it was partly Microsoft's aggressive patent position against Android that put Google in the position of feeling compelled to buy Motorola Mobility to get its patent portfolio, mainly for the sake of protecting itself and having a bunch of patents that it could use as a shield against a lawsuit from the likes of Microsoft. Of course, Microsoft was already suing Motorola over the company's use of Android.
A few weeks ago, we discussed the tough spot that Google was in over Motorola's patents. The company has indicated that would keep in place Motorola's current patent licensing strategy. While many of us would prefer that Google make a big statement by freeing or opening up many of these patents, the company is actually in something of a ridiculous position: if it does that... its competitors (mainly Microsoft) will claim anti-trust violations by saying that the company is using its market position to undercut the prices that other charge.
It's other choice? Keep the current rates. And that's what it's indicated it would do... so the second that the EU and the US approved the merger, Microsoft files this antitrust complaint, arguing that the rates Motorola charges for its patents is too high. It's a damned if you do, damned if you don't position for Google. Keep the rates as they are, and they're violating antitrust rules by charging too much. Cut the prices or free up some of the patents, and it's an antitrust issue for leveraging their position and "dumping" in the market.
Of course, Microsoft's almost gleeful blog post about its complaint ignores all of this reality and history, and tries to position it as if Motorola and Google are trying to "kill" web and mobile video by charging too high a royalty rate. Frankly, for anyone who knows anything about Microsoft's patent practices over the past few years, they'll see through this and recognize how laughable Microsoft's claims are.
Either way, the situation is ridiculous. Fighting over patents doesn't help bring any new innovations to market. It just diverts money to the lawyers.
Artificial intelligence is a fun topic -- especially when it's applied to playing games with humans. The classic "man vs. machine" battles are always entertaining... until we hit the Singularity, and computer AI just consistently trounces humans in everything. Here are a few more examples of cool AI projects.
Schwartz tells the story of Steve Jobs calling him and threatening Sun with a patent infringement lawsuit, to which Schwartz quickly warned Jobs that going down that path would lead to a patent nuclear war, as he pointed out how recent Apple products likely infringed on Sun patents. He then tells another story about a visit from Bill Gates, with a similar threat over patents -- and a similar response, pointing out that Microsoft clearly copied certain Sun technology. In both cases, the counterweight made the threats go away. This is the whole "nuclear stockpiling" scenario -- and, as such, it creates a ton of waste. You have to keep building up those stockpiles just to make sure the other side is too scared to sue you.
But the key point is made after this, where Schwartz again makes a statement quite similar to ones we've made when a big tech company suddenly goes on the patent offensive. It's a canary-in-the-coalmine sign that something is wrong:
For a technology company, going on offense with software patents seems like an act of desperation, relying on the courts instead of the marketplace.
He also highlights how these lawsuits can backfire in a big, big way:
Having watched this movie play out many times, suing a competitor typically makes them more relevant, not less. Developers I know aren't getting less interested in Google's Android platform, they're getting more interested -- Apple's actions are enhancing that interest.
Indeed. It's a point that still seems missed by so many when discussing these patent lawsuits.
silverscarcat: GM, I could barely read the article myself. John Fenderson: Wow. I seriously think that AJ has finally suffered a complete psychotic break. Josh in CharlotteNC: Not the first time, John. He's been overdue for awhile. silverscarcat: Which thread? Jay: He now has a pastebin for just Mike. Wow, he just doesn't quit... John Fenderson: @silverscarcat: All of them. silverscarcat: Wow... I think the funny men with the little white coats need to pay him a visit. Jay: ... I just thought about what the NSA is doing... They're creating the largest collection of books in history. Conceptually speaking, they're archiving and vacuuming all of the books that they can't read. BentFranklin: Links in comments need a new style. You can barely see them. How about bold them like in articles? silverscarcat: Holy... OUch, it gets worse and worse for MS these days. http://www.warpzoned.com/2013/06/congressmen-propose-we-are-watching-you-act-an-anti-kinect-bill/ Ninja: People should just report and ignore the link troll.. I like how some of the most wacky comments from the trolls are being left alone under the pinkish link silverscarcat: Um... WOW! Just wow... Looks like MS FINALLY started to listen! http://www.purexbox.com/news/2013/06/microsoft_to_reverse_drm_policies_make_xbox_one_region_free http://news.xbox.com/2013/06/update BentFranklin: Crap. First word strips links.