Patent Drama with the Stars

Get out your fire extinguishers, as The patent struggle between tech giants seems to just flare up. On Wednesday, Google publicly accused Apple and Microsoft of having deliberately conspired to undermine Android’s position using patrons in the form of recently acquired Nortel and Novell patents.

Why just now? Indeed, in the past, Google remained silent on this subject and certainly never called its rivals by name. Talk about an incorrect patent granting system has been raised by the search company for a long time, even one post was written explaining why Google intends to spend serious money on the remnants of Nortel's fame - for its own protection. But neither one nor the other helped. And the company was in an even more vulnerable position, at a time when rates had only increased.

David Drummond accuses Apple, Microsoft, Oracle and RIM of organizing a “hostile Android campaign” by buying patents from Novell and Nortel, and after that they asked Google for a percentage for licensing each Android device . It seems to be simple, competing companies are trying to make the production and licensing of Android devices more expensive (provided that the OS itself is free), as well as preventing them from entering the market during litigation with Barnes & Noble, HTC, Motorola and Samsung .

Before losing the auction on Nortel, Google made a bid just above $ 4 billion. Apple - the first company behind the fresh Rockstar Bidco (it seems to me that even that name is laughing at Google?), Won the pool for $ 4.5 billion - this we already know . But now an island is visible from the corporate ship, on which an even greater treasure is buried.

You can argue for a long time who is Google’s greatest rival in terms of the success of Android OS and devices on it: RIM, MS or Apple, each of which is included in Rockstar Bidco. But one thing is known for certain - Apple and Google have long been interested in the patent pool of InterDigitalwho will soon go under the hammer. According to Bloomberg, Samsung is also pulling its pens and peering into an upcoming deal. You can bet a million that Microsoft is doing the same thing. Most likely Apple. Why? Well, everything is simple here.

If the Nortel transaction brought about 6,000 different patents to the joint project of the three companies, InterDigital holds 8,800 similar documents in the pool. Moreover - the scope of patents is still the same - mobile technology.

In other words, this battle will be bloody. If you focus on Nortel, which implemented a deal for $ 4.5 billion at a starting price of $ 1 billion, then when Rockstar Bidco is connected to a deal with InterDigital, then the price can easily go beyond $ 5-6 billion. Does Google have such funds? There is. Unfortunately for them, Apple and Microsoft put together a lot more money.

In this situation, it is not surprising that the vice president of Google literally panicked and wrote his post - he was just tired of constantly getting slaps in the face. And in his words it is said not so much about an insult, but about a conspiracy, during which the software giant (Microsoft) invited for dinner, and then went to bed with the rest of the companies that gave money for patents. For one purpose only - to kill Google.

Now imagine that this is true. Google knows about. They have about $ 40 billion in cash or cash equivalents ready to spend on their accounts. Apple has almost twice as much money. Apple and Microsoft have more than $ 100 billion of "purchasing power." If these two companies come to participate in the InterDigital auction, then Google has very few options:

1. Go to court
2. Contact the audience
3. Pray



As David Drummond noted during a verbal skirmish with Microsoft representatives on Twitter, the US Department of Justice is already checking the latest transactions (Novell - Nortel, although in the first case all participating companies were already limited by the justice department) and will definitely be present at the next auction ( InterDigital). He himself activated the second option. Well, the third ... it is possible that he always worked. This is a cruel world.

And precisely for this reason it is impossible to succeed simply by being the first - as in the case of Google, which in early July offered its $ 900 million for Nortel’s pool and could hardly have imagined that it would be bypassed at a rate of $ 4.5 billion. Although there was something to bargain for - the portfolio contains patents for 3G and 4G wireless communications, optical technologies, voice processing, semiconductor manufacturing and many other documents that would no doubt help Google defend against its own competitors. More precisely - they could help.

“One smartphone can raise doubts about 250,000 (mostly dubious) patents, and our competitors, however, may impose a“ tax ”on these patents in order to make the devices even more expensive for the buyer,” Drummond writes: “They want the manufacturer to have a harder time selling the device with Android. Instead of competing in the design of new devices or capabilities, they only compete in litigation. Until we intervene, consumers may face higher prices for Android devices and less choice for their next phone. ”

From these words, it becomes obvious that Google considers the current patent system - that it works against the company ("Patents were created to encourage innovation, but over time they began to be used as weapons to stop them" - in a neighboring post). But it’s quite possible that these are just offended words after a lost battle. In the end, Google jumped into the mobile market absolutely knowing what the rules were there and that patent wars were very common. Here's what Intellectual Property Analyst Florian Muller thinks about this:

“Google entered the field of wireless communications boldly, despite the fact that from the point of view of lawsuits this is one of the hottest markets,” Muller writes: “Android’s problem is not in patents or some kind of conspiracy - it consists of a huge number of lawsuits. I think that in fact, all these patent holders just want a natural business and income for everyone, rather than trying to break Google and Android with some kind of organized campaign, which Google can’t prove to exist. ”

Google believes that Oracle is primarily responsible for anti-Android conspiracy, but Florian Muller quotes the words of a judge who knows Google vs. Oracle: "Strong suspicion that Google specifically violated Oracle's intellectual property rights."



Nevertheless, it is quite possible to understand Drummond's feelings. He is angry because Microsoft makes more money from every device than Google. He is angry because companies such as Oracle, which once claimed that software patents made no sense and could only use them to protect their products, joined together to repel Google and, finally, sue. He is angry because Google, even after purchasing patents from IBM and other companies, the company's position is still weak and it does not have any significant portfolio of patents.

Attention is a question. Why? Why has Google become the enemy (and this is precisely the position David Drummond claims) of many companies in the industry? It is unlikely because they are “evil,” but rather it is explained to others. Over time, Google is increasingly trying to succeed in absolutely everything. And what's more, the company has the courage to think that this is really possible. This is what angers all competitors who feel that the ground under their feet begins to move.

So it was with Apple. It is hardly worth mentioning that the two companies were very close, and the then CEO of Google - Eric Schmidt, was even on the board of directors of Apple. And for Jobs, Google was the tool for integrating some applications into the iPhone (Maps, YouTube, etc.) - it even seemed that the two could come together and make some kind of revolution in the mobile market.

But everything spun and became very complex exactly at the moment when it became clear that Android and iPhone are not just direct competitors - sworn enemies. The rest is already part of the story.

And for the same reason, today Microsoft may well long for Android’s blood to finally spill. Their message is obvious: we invited Google to become our partner in the Nortel patent transaction, but Google wanted all the toys for himself and thought that he could get them.

Although Brad Smith's commentary - his tweet captured above only speaks of Novell's patent proposal. Moreover, Drummond already responded to this with the words: “The deal was offered only after everyone made sure that the patents could not be used to protect Android, and nevertheless we would have to pay for them - we don’t use this inventive strategy let's go. ”

So is the whole problem really in patents, or in companies that own them? If this is a two-way problem - that is, a way to fix it, is to reform the current system of intellectual property and move to another way of regulating property.

In truth, the US Supreme Court could very easily and simply, with a stroke of the pen, extend its ban on patenting mathematical algorithms to software code. Even if something looks like iron and works like iron, then most likely it is still based on a software mechanism, which in essence is just a mathematical-logical code.

“Of course,” writes Forbes columnist Timothy Leah, “repealing software patents would be controversial, as it would spray hundreds of thousands of patents worth billions of dollars. The court always tries to avoid such decisions. ”

Well, by the fact that David Drummond brought this drama to blogs, and not to the courts, now Google is showing its attitude to the current patent system and some giants in this field: only the opinion of the audience makes sense, and not the ultimate truth. In the end, this is not to court Google owes half a million Android devices activated every day.

Microsoft, Apple, RIM are all Google rivals in the mobile market. But Oracle is a big antagonist of the company itself. If the claims of Apple and MS can slightly disrupt the ecosystem of Android'a making the platform or development for it more time-consuming, and devices more expensive, then suing Oracle is very dangerous, because it can destroy everything. For those who have forgotten, I’ll remind you that Oracle has long sued Google for unlicensed use of Java on Android.

And if in this story tweets and screenshots of private correspondence confirm everything, then Google is really in trouble. In 2005, Google Mobile Chef Andy Rubin wrote: “If Sun doesn’t want to work with us, we have two options: 1. Refuse our work and apply the MSFT CLR VM and C # or 2. Continue to work in Java protecting our solution, most likely acquiring enemies.”

As you can see, the latter was chosen. But it’s unlikely that in 2005 Google knew that Sun would disappear soon, and that Oracle would take control of Java rights. Few people dared to stand in the way of this company.

This story ends with lazy comments. Both from Microsoft, whose tweet was mentioned by Novell, but forgot Nortel, and Google, pretending that nothing happened.

Although, the last comment by the vice president of Google still carries a bit of reason:

“If you think about it well, it becomes obvious why we declined the offer of Micrososf. The goal of the latter was to retain patents that could be used to defend against attacks from Google and manufacturers on Android. The joint acquisition of Novell patents, which gave each side a license, was rejected for the reason that it would not give any protection to Android from attacks by Microsoft or other partners in the transaction (because, roughly speaking, “patents are the same for everyone”). ”

That is, Drummond, literally and openly, suggests that the purchase of the Novell pool was, to one degree or another, a scam. Google would have acquired rights to patents, which cannot be used for defense in court (it is surprising that no one already considers patents as an innovation - just property).

Should Google go any further than its own, trying to acquire the rest of its patent portfolios? You can argue. On the one hand - on the other side of the ocean, they say, there is justice. According to it, the court ordered Microsoft and other companies involved in the Novell transaction to sell part of their patents.

On the other hand, until Google has these patents, their hysteria is unlikely to stop. There are courts with Oracle, but there is no progress on them and, definitely, now none of the manufacturers of Android devices is ready to lose the most important thing - the platform.

Bidding for InterDigital patents should begin in September.

Thanks for the info TechCrunch , ArsTechnica , Wired