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Barnes & Noble Blows The Lid Off Microsoft's Android Patent Squeeze

Nook maker says Microsoft's "trivial" and "invalid" patents stifle open source innovation

Just a few weeks ago I wrote about Microsoft making more money from Android patent licensing fees than it does from Windows Mobile. A majority of Android manufacturers are paying Microsoft to "license" certain patents that Redmond claims the open source Android system infringes upon. Barnes & Noble who refused to pay Microsoft and be bound by what they claim is an "oppressive" licensing agreement is involved in a law suit with Microsoft over this. As a result they have gone public with the inside scoop of exactly how Microsoft is strong-arming Android licensees using the same old, heavy-handed tactics that got Microsoft in trouble with the U.S. Justice Department previously.

Last week my fellow Network World blogger, Julie Bort wrote about some of what Microsoft is up to. But now the picture is much clearer thanks to more exhibits and claims put out by Barnes and Noble. They claim these license agreements go far beyond just paying to use some "trivial" patents. They claim Microsoft is trying to control future Android development and actually control Android itself. Make no mistake about it, there is a war going on in the mobile OS market and the weapons are patents.

Much of the reporting on this comes from the Groklaw site (here and here) which has run a string of articles including the actual exhibits and letters that Barnes & Nobles legal team has submitted to the courts and the Patent Office. But rather than combing through the exhibits and commentary, a great overview that lays out B&N's position is the series of slides they have filed with the ITC and is available here (the slides need to be rotated, so save the PDF and open in acrobat).

B&N really blows the lid off of what Microsoft is doing and how they are forcing money from Android, including answering the question about why Apple, Oracle, RIM and Microsoft formed an unholy alliance and bid almost 5 billion dollars to buy the Novell patents. It is because those patents though not originally filed regarding Mobile use, can be asserted against mobile OS functionality. Google bid a paltry $900 million for the portfolio, but these Android competitors want to use those patents to put a stranglehold on Android. Those kinds of numbers should show you what is at stake here.

What about Nokia and Microsoft's partnership on mobile phones? It is as much about offensive patent use as it is about selling Windows Mobile based phones. Together Nokia and Microsoft control a huge library of patents that can be brought to bear in this war. It all comes down to controlling the mobile OS space.  Microsoft figures if they can't make everyone use Windows Mobile they are going to control Android.

B&N claims that Android has done in a few short years what Microsoft has been unable to do in 8 or 9 years, that is make a winning mobile OS. So now faced with failure in innovation, it is trying to leverage patents it filed or bought to put a stranglehold on Android.  As claimed by B&N the money they make on each Android device sold equals to or is greater than what they make on a Windows Mobile phone. So in essence Android makers have to buy a Windows Mobile phone license for each Android set they sell.  Much like PC makers did with Windows back in the day.

First, as to all of those who wondered about exactly what patents Microsoft claims they own that Android infringes upon, from B&N's filings:

B&N claims that all of these are "trivial" and "insignificant" in terms of Android's use. They claim Microsoft is using these patents for minor functionality to hold Android hostage.  It is not just licensing fee's either, though they claim is Microsoft is recieving anywere from $5 dollars to $15 dollars or more per copy of Android sold (which is equal to or more thanwhat  they charge for Windows Mobile licenses). Barnes & Nobles claims that along with paying the blood money Microsoft demands, Microsoft also makes license holders sign an "oppressive" agreement which gives Microsoft say over future hardware and software configurations and innovations. This according to B&N is to ensure that they keep Android from advancing too far, too fast for Microsoft to keep up. That is in many ways worse than the licensing fees. Microsoft wants to control future Android development and innovation.  Positively evil.

A good overview of B&N's position regarding what Microsoft is doing, from the slides is this:

This behavior by Microsoft shows the brass knuckles mentality which has won them so many friends and admirers over the years in the open source community.  Just when we thought they were turning a new leaf, being a kinder, gentler Microsoft, it seems like the Leopard can't lose its spots.  If you are interested in this this, you should take the time to read the Groklaw articles and pay attention to the exhibits. Some of them are in a bit of legalese, but well worth the time to dig in. It will give you an idea of the big stakes fight to the death going on for the future of the mobile operating system you will use going forward.

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