Microsoft sells patents to Xiaomi
reuters.com
reuters.com
1. the Chineese government got their backs. (e.g. foreign competitors have been forced to agree to not sue these guys to get their mergers approved)
2. they make long term strategic decisions. xiaomi is owned by the employees and don't have any short-sighted shareholders to please
3. their engineering and manufacturing teams have a very efficient iterative workflow. many other companies ship a product and move on to the next but xiaomi updates and improves their products every four weeks (eight ?).
1. Chinese Gov has Huawei's back, not Xiaomi.
2. Their decision to make their OS to show crazy amount of ads is really short sighted.
3. They are falling dangerously behind Huawei in both sales and quality of product.
The Chinese government backs several companies in the same industry, there's no reason to believe they don't have both company's backs
>2. Their decision to make their OS to show crazy amount of ads is really short sighted.
This must be a Chinese mainland thing, I've never seen this on any of their devices.
> 3. They are falling dangerously behind Huawei in both sales and quality of product.
I don't think so, I find the Xiaomi products to be very inticing and well built for the price. In the new era of smartphones where people will no longer be willing to shell out big bucks and subsidies of smart phones from providers are faltering (or just ending.) Companies like Xiaomi stand to gain.
Have you ever used actually used a Xiaomi product for some time? Sure they are cheap and look ok but they are so unreliable it gets unbearable after a few months.
They all work very well, and are exceptional quality, considering their price.
They hide ideas for other divisions and act very competitive with each other.
How is it "owned by the employees" when the founder owns 3/4 of the stock? Do you mean "private"?
(old source: http://www.digitaltrends.com/mobile/400-smartphone-pay-120-p...)
Now they just need to solve their cash flow issues to fuel this growth…
Generally, patents are derived from R&D which is where innovation directly comes from so it is "related". At the very least this is true in Microsoft's case.
Regarding anti-competitive - it's only anti-competitive if someone else attempts to COPY the innovation. They are free to innovate and come up with an ALTERNATIVE. The more alternatives, the more choices for consumers. If you want to copy then sure - patents block, but if you want to innovate then patents can provide incentivizes to carry that out.
Except in practice you aren't. Most pantens are so vaguely worded that any independent solution to a problem can be claimed to infringe on a patent. And even if you don't actually infringe on the patent, you better have a couple of years and a few $100k-$millions to dedicate to the court battle to prove that.
No longer true, over the past ~decade, quality of patents issued has dramatically improved. Most patents are actually very narrow. Just look at the sheer quantity that are issuing (in software in particular) - everyone is coming up with something different.
> And even if you don't actually infringe on the patent, you better have a couple of years and a few $100k-$millions to dedicate to the court battle to prove that.
Or before recklessly entering a market, evaluate the landscape. Do you have something new to offer, can you yourself protect your innovations, narrow down your product scope to minimize encroachment on others property, etc...
Think less about building the whole kitchen sink and more on being the best at some tiny improvement (texture of the handles, connectors to the pipe to minimize leakage, etc...). Think writing the perfect 50 LOC that others would want to use rather than building 50k LOC. The less code you ship, the more you've minimized your patent infringement risk (along with proper evaluation of competitors protect at the outset). Additionally, if you've found that 50 LOC that nobody does yet and others want to use, then you've likely also found something valuable to patent yourself. BECOME the innovator rather than sued by the innovator.
Business requires managing risks, patents are but a small factor if properly handled.
Plus, the number of vague or obvious patents in enforcement has not declined in any serious way. We have a recent example with Virnetx pulling hundreds of millions out of Apple et al for using end-to-end crypto. Something that was invented before their patents. Their others say mix crypto with (service here), which isn't original either. People mixed crypto with all sorts of things. Adding it to something is a feature of crypto, not an invention. Specific mechanism maybe, but not concept.
Stuff like that is still normal in the patent suits. The suits are too expensive. So, most companies settle to loose good chunk of money. There's quite a few businesses with good products that refused to do business in U.S. specifically because of this. They operate in Asia. That Xiamoi's lawyers told management to not enter America with common products unless they had a pile of patents is telling.
Couple of things seriously wrong in this statement alone:
1) I seriously doubt you can describe the patents as "end-to-end crypto". If you are going to broadly describe something rather complex in 4 words then I would suggest "Apple’s VPN on demand function" as a better example. Similar #num of words yet suddenly significantly narrower isn't it. However, even that doesn't scratch the surface, looking at the titles of the patents in trial provides a better glimpse that this is more than just simply "end-to-end crypto":
6,502,135 - Agile network protocol for secure communications with assured system availability
7,418,504 - Agile network protocol for secure communications using secure domain names
7,490,151 - Establishment of a secure communication link based on a domain name service (DNS) request
7,921,211 - Agile network protocol for secure communications using secure domain names
Are you starting to understand that this isn't merely "end-to-end crypto" or do we need to go into the Claims and how to properly begin to evaluate patent property boundaries?
2) I don't have the time to replay the entire infringement trial, but it seems to me you believe this trial was unjust or resulted in an improper outcome. I highly doubt that Apple had incompetent lawyers or did not have enough resources. The court and jury disagrees with your assessment.
> Unfortunately, that works better for the bigger players.
Measured by market cap, Apple is the worlds biggest corporation. VirnetX is not small, not tiny, but rather miniscule in comparison. Is this is fight between 2 big players? No. Did the bigger player win? No.
> There's allegedly over 200,000 patents that can cover smartphones in some way.
Proves my point in previous post - small players don't have to re-invent the kitchen sink (in this case smartphones) but rather should focus on some small innovation (e.g. a VPN on demand feature - except translate to something of tomorrow - these patents are from 10-15 years ago). Find that 50 LOC - not re-invent 500k LOC. For now, the only pitfall is that larger players still believe they are better off to fight later in court rather than license now from the inventor when they find a new innovation. Blackberry learned 10 years ago, maybe Apple will learn today, and hopefully others will learn from their lessons.
Patents enable the small player to innovate and find success.
It doesn't matter what you describe them as. What matters is what you can enforce them on. It's clever that you focus on VPN while ignoring product pertinent to this conversation: iMessage. Virnetx not only thinks they deserve credit for any end-to-end messaging app but also wants to shut them down.
http://btlj.org/2016/04/patent-privateering-virnetx-v-apple/
http://www.medianama.com/2016/05/223-now-virnetx-wants-apple...
Not just Apple's. They're going after any big company that's doing end-to-end encryption plus has money. They're also asking products to be taken off the market. Nobody used their patents or invention to build their products. The state-of-the-art in this space is way ahead of Virnetx's paltry offering that nobody wants. The only results of patents here are (a) anti-competitive behavior, (b) leeching off successful companies, and (c) probably helping NSA defeat widespread crypto easier via BULLRUN program and their partners at SAIC.
"Proves my point in previous post - small players don't have to re-invent the kitchen sink (in this case smartphones) but rather should focus on some small innovation (e.g. a VPN on demand feature - except translate to something of tomorrow - these patents are from 10-15 years ago). Find that 50 LOC"
What are you talking about? You can't sell 50LOC: you have to have whatever is standard or nobody will buy it. That's easy without patent enforcement in effect. Just build it, deploy it, and get first-mover advantage. Now, let's test your little theory on VOIP which Vodaphone has a patent on. How do you create a voice over IP product without infringing a patent that claims to cover any transmission of voice over any data channel? And in courts that rule in favor of patent-holder almost 100% of the time?
Good luck.
"Patents enable the small player to innovate and find success."
Most patents are filed by (a) big companies that sue small players for infringement or (b) Universities that sell patents to big companies that sue small players for infringement. The smaller companies, independent or academic spinoffs, often get acquired by big players that then sue small players for infringement. The big companies also hit outrageous profit margins due to lack of competition. Most studies of effect on patent system shows this to be the case.
Your claim about small businesses is a legend. That is, it's mostly a myth but with occasionally success stories to give it what little truth it has. Patents don't create innovation: corporate competition and often, government-funded research create most innovation. Patents then just restrict competition and drive prices up.
When you're using it as you did to try to make the point that the patents were overly broad - then of course it matters!
> "but also wants to shut them down"
It's called leverage - the small player needs to gain leverage to affect a better outcome. Both sides do it, don't kid yourself.
> "Nobody used their patents or invention to build their products."
When you're not researching others prior art then you're reinventing the wheel. Not optimally efficient.
> "What are you talking about? You can't sell 50LOC"
Oh yes you can.
> "How do you create a voice over IP product without infringing a patent that claims to cover any transmission of voice over any data channel?"
Again, you are (deliberately?) representing patents as overly broad. I just showed you that the others patents were not as broadly covering ALL "end-to-end crypto" but yet you continue with these insane notions?
> "Most patents are filed by (a) big companies that sue small players for infringement or (b) Universities that sell patents to big companies that sue small players for infringement."
That's not addressing my point. I said patents enable small players to innovate and find success - your point about who's filing more does nothing to address my point. ...in fact:
> "The smaller companies, independent or academic spinoffs, often get acquired by big players"
further directly proves my point. The smaller players were able to find success - as you said by being acquired.
> "Most studies of effect on patent system shows this to be the case."
Except you just pointed out the small players are acquired. Not all studies are 100% correct. In fact, in the patent world there are many purposely misleading studies.
> "Your claim about small businesses is a legend. That is, it's mostly a myth but with occasionally success stories to give it what little truth it has."
Or perhaps due to NDA's etc you don't hear about the small business successes.
> "Patents don't create innovation"
I hope I never said that because I completely agree. I would say something more like patents supply incentive to innovate but by themselves don't create anything but pieces of paper.
> "Patents then just restrict competition and drive prices up."
Same old tired line. If it drives prices up then generally it will lure investors to invest - and to invest in patents requires investing in innovation - investing in innovation means R&D.
> "And in courts that rule in favor of patent-holder almost 100% of the time?"
How long does it take for you to get a hint? ~15 years of patent reforms, numerous SCOTUS cases, POTUS trying to get involved, etc. So much money and effort spent yet patent-holders still winning. Do you honestly believe that one more reform bill or one more President or one more SCOTUS ruling will finally be the end? Whether I'm morally right or you're morally right - perhaps you are better off to face reality than keep bucking the trend. Hope is not a strategy.
1. They're the source off all kinds of innovation and startups that wouldn't otherwise happen. This means CompSci doesn't happen unless private parties fund it due to patents they expect. Most funding is by taxpayers. So, that's not true. Private parties won't invest in things without patent protection? Not true: they do anyway to remain competitive. Startups won't happen without patent protection? They do anyway with them rarely using patents and some using trade secrets. So, alleged benefits of patents are a lie, esp in software space.
2. They're primarily a tool to maximize profits of companies, small or large, that contribute almost nothing in innovation or features. Every study I've seen shows this. Plus, most suits are coming from groups that produce nothing: acquire patents from someone for cheap, then sue anyone actually building anything. Opposite of what system claims to do. Large companies make up most of the rest of the suits by putting innovators out of business while leaving their own products stagnant. They even sometimes try to take the products off the market as we saw with Virnetx, Apple, and Microsoft.
So, net effect is that patents are hurting innovation. Plus, nobody producing innovative stuff getting acquired did so by reading hundreds of thousands of patents. Surveys show they rarely ever read a single patent. They look at what's out there, maybe read academic work, build something, and sell it. Of all that innovation, patents contributed jack and most don't even get patents since they're expensive to get. Easier for big players the system is designed to benefit. ;)
"How long does it take for you to get a hint? ~15 years of patent reforms, numerous SCOTUS cases, POTUS trying to get involved, etc."
Vast amount of profits produced by legal monopolies gave patent holders more money on lawyers and politicians have given them a good run. Plus, most of the rest aren't uniting to deal with the problem with counter-lobbying. I had a hint of that a while back. That doesn't mean we actual innovators should stop fighting monopolies mostly issued to non-innovating, big companies and small companies that sue instead of sell products.
"Same old tired line. If it drives prices up then generally it will lure investors to invest - and to invest in patents requires investing in innovation - investing in innovation means R&D."
That was so funny I had to respond to it. A patent is a legal monopoly. A monopoly by definition and style will lead to higher prices than competitive segment with many players innovating. If you're right, please tell me about all those cancer and heart drugs that I can get for generic prices. Oh wait, I can't, because they're patented and patent-holders charge whatever the market will bear to maximize profits. Same everywhere else where alternative innovations are hard to come by. Or existed but don't count in a "first-to-file" system that favors patent holders.
When I disagree with your overall sentiment that patents have no value - then the technicalities ARE important. Regardless, I'll take the fact you feel the need to take the battle to new ground as a win and we'll move on.
> 1. They're the source off all kinds of innovation and startups that wouldn't otherwise happen.
"all kinds of innovation" - never said anything like that. I said patents incentivize investment into innovation. Big difference.
> Most funding is by taxpayers.
Well, I disagree with "most". Perhaps some but not most. In my experience, plenty of innovation comes from small entities. If this is not the case then why do larger players continually acquire the small companies? sometimes it's for other reasons but I suggest that at least some of the time it's for their innovations.
> "Private parties won't invest in things without patent protection? "
ok, clearly you are not reading what I'm writing. If you are referring to my "patents incentivize investment" then how is that equivalent to "won't invest without patent protection"?!
> So, alleged benefits of patents are a lie, esp in software space.
You are all over the place. Earlier you said patent holders win 100% of the time (which in a free market would mean investors would eventually be drawn in and invest in whatever it took to get these magical things called patents) and now you're saying the benefits are a lie?
> "2. They're primarily a tool to maximize profits of companies, small or large, that contribute almost nothing in innovation or features."
Of course they contribute nothing - they are merely pieces of paper. You don't create the innovation in the patent application itself!
> "Plus, most suits are coming from groups that produce nothing: acquire patents from someone for cheap, then sue anyone actually building anything. "
An innovator can no longer approach a larger player with an improvement to one of their products. The larger players have learned their most optimal business strategy is to weed out the majority by ignoring them until an infringement suit is brought. Many small players don't/can't - hence optimal strategy for larger player.
Is it fair for the larger players to do this? Morally, probably not. But large corporations have fiduciary duty to maximize profits to their shareholders - so from the shareholders perspective it is.
However, from the small player standpoint, they need to do what they have to - and often they realize that selling off their patent assets to another entity is their best option. Call it troll if you like but in reality they are more leveling the playing field by carrying out the IP enforcement that is difficult for the small innovator to do themselves. Either way, a patent is a patent and it matters not who owns it.
> "So, net effect is that patents are hurting innovation. "
For non-innovators or copycats that might be true, but for innovators that is patently false.
> "Surveys show they rarely ever read a single patent."
And then they act all surprised when they are slapped with an infringement trial :-) "But officer I did not see the sign".
> "That doesn't mean we actual innovators should stop fighting monopolies mostly issued to non-innovating, big companies and small companies that sue instead of sell products."
So the innovators aren't getting the patents while the non-innovators are? Please, give it a rest.
> "A patent is a legal monopoly. A monopoly by definition and style will lead to higher prices than competitive segment with many players innovating"
Monopolies encourage investment - in this case, investment into patents means investment into innovation means investment into R&D.
> "Or existed but don't count in a "first-to-file" system that favors patent holders."
This was introduced in the last patent reform (AIA). 2 steps forward and 1 back - or 1 forward and 2 back?
This is really interesting, maybe this will set a precedent for the creation of tech companies in the developing world. The Developed World have a clear plan: they will own all the "intellectual property" and use the cheap work in developing countries. It is not a problem if the same company produces all brands of printers. If it starts to sell a print itself, it will be sued to death.
The world is completely ordered: high value jobs for the rich, low value for the poor. We don't need brute force imperialism anymore.
If Xiaomi builds a rift in this structure, it may pave a way for other companies/countries around the world.
China in general has said "we don't care" about IP rights, it is only changing now because (a) they are beginning to have their own IP to protect, (b) it is a race to the bottom between local companies when NO IP is protected, and (c) you will get sued to death on products sold in developed markets that are questionable in IP usage.
High value jobs for the rich, low value jobs for the poor. Sounds like China, the USA, and the rest of the world. Do not treat China as one homogenous pile of poor workers.
Or is China now caring about IP because they have seen that it's more profitable to the innovator rather than after-the-fact-copycat.
The bigger question is whether they can become the innovator. In some instances, they have indicated they might but overall I'm not sold that they can.
It is just that the low hanging fruits are now almost all picked. Hopefully they are reaching their Walkman moment.
If you're copying, then there is never an end to the low hanging fruit. Never.
> Hopefully they are reaching their Walkman moment.
To reach a Walkman moment they first have to invent a Walkman. Hope is not a strategy.
> To reach a Walkman moment they first have to invent a Walkman. Hope is not a strategy.
I'm talking about my own hopes here. And ya, they would have to invent a "Walkman." It hasn't happened yet, none of Xiaomi's products so far are original in anyway.
More seriously, since these phones are often bought from "gray market" vendors, I am more worried about cybercriminals planting malware in them when they are imported:
http://venturebeat.com/2015/03/07/security-firm-finds-pre-in...
I never understand this self-defeatist mentality. One represents a democracy while the other represents a communist dictatorship. If you trust them so much why not just move there and become a citizen :-) I mean, I hear there's lot of jobs have moved there the past ~decade.
In contrast, your examples: 1) have nothing to do with China, 2) suggest that two wrongs make a right.
And Microsoft will get Office into the hands of million Xiaomi users.
Hence, Another reason why Apple do not have LTE in their Macbook yet.
Of course if they enter western markets, the prices will go up (US/european regulations, warranty law, license costs etc.), but if that price bump stays reasonable... some of the big boys are in trouble.
* technically thats tax fraud - but even with the extra tax, it's still cheaper than buying from a EU-based reseller
There is a LOT of talk about anticompetitive practices by Microsoft lately, this usually results in such pseudo investment/partnership with native chinese company, or $1B anti competitive fine like the one Qualcomm received. Apple is also on a short list of getting fined/kicked hard.
Some things that are lame. No fingerprint sensor and no NFC.