Patent Aggressor Microsoft Files EU Complaint Against Google/Motorola For Charging Too Much To License Patents

from the live-by-the-sword dept

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.

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  1. icon
    Walt French (profile), 27 Feb 2012 @ 6:38am

    Only Lawyers Grok it? Hah!

    My training is as an economist (now work in Finance, but was formerly a software developer). The issues here are not trivial, but they're a LOT easier to understand than say, java.

    Patent-holders are given a limited (20 year) monopoly on their inventions. But when they help write the h.264 standard, and declare that those patents are essential to the standard, they voluntarily promise to license their work on FRAND terms. (Similar on other standards-essential patents, at least since Moto abused its GSM patents in the 90's and standards bodies realized that nobody would accept a standard infested with land mines, so required patent-holders to limit their rights or else see their patents NOT included in standards.

    No legal-speak at all required! Actually, pretty easy, and more friendly to the notion of a shared community advancing the state of the art for all, while still giving inventors such as Motorola fair compensation for their work. Firms that contribute their patents to a standard may give up some control, but in exchange they get (in the case of GSM and h.264) literally billions of licensees.

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