Microsoft’s Android Shakedown | Hacker News Reader

Microsoft’s Android Shakedown

blogs.forbes.com

192 pointsmwsherman90 comments

"The complexity of software and low standards for patent eligibility mean that software engineers produce potentially patentable ideas all the time. [Snip] Auditing 10 million lines of code for compliance with 18,000 patents is an impossible task—especially because the meaning of a patent’s claims are often not clear until after they have been litigated. [Snip] The result is a transfer of wealth from young, growing, innovative companies like Google to mature, bureaucratic companies like Microsoft and IBM—precisely the opposite of the effect the patent system is supposed to have."

Those three sentences together form the best explanation I've seen yet on why software patents are so problematic.

low standards for patent eligibility

I'm not sure if the standards are low, rather that the examiners don't abide by the rules set out by the USPTO. Novel and non-obvious are both requirements.

because the meaning of a patent’s claims are often not clear until after they have been litigated

This is another failing of current examiners. The patent should be written such that one skilled in the art could reproduce it. The patents are convoluted and unclear enough that one likely couldn't produce much of what is patented, because its not clear what the invention is. The examiners should make people resubmit patents, under time constraints, so that they are clear. Much like submitting to a journal.

To be clear, patent "eligibility" usually refers to the requirements of 35 USC 101, i.e. any new and useful method or machine. Novelty and obviousness come later, hence OP's term "potentially patentable." The point is that pretty much any software process gets you past the initial hurdle.

And obviousness isn't as easy to show as you imply. Everything has to be based on prior art, which isn't always readily available.

Clarity is subjective, and even claims that seem clear can get twisted around once litigation starts. Attorneys are masters at this.

I'm just pointing out that it's not as easy as simply getting better examiners, although that would certainly help.

I've said it before, but I'd be really interested to see a requirement for getting chartered engineer status be to peer-review a certain number of patent applications. It might cut down on the number of frivolous patents a touch.

Is the "teaching" requirement for a patent really weak in court? It seems to me most patents are obfuscated works of legalese and ought to be invalidated on that basis, by a relatively clear reading of the law.

Or is it too easy to pay some expert witness $1000 to come in and say "yeah, that's totally clear to me and I'm an expert, so nyah nyah nyah."

Yea, there is a reason why math is not patentable, and it should not be patentable just because it is executed on a computer.

I was talking to someone who once worked at IBM, and he mentioned that they give a bonus (something like $2000-$5000) for each patent that you receive. He said that employees would get together in small groups and take turns filing patents and sharing the proceeds with the group. IBM, of course, paid for all the fees for filing the patent.

Just thought I'd share this random anecdote..

Adobe has the same thing for 1000 to 5000 per patent (though not available to students such as myself). Some people would file 2 or 3 patents a year, usually just pertaining to the particular way they solved a problem that month.

> not available to students

Wow. I wonder if they understand the impact of that business decision?

Were you unpaid? Or something, that changed your legal status in a relevant way?

No I was paid, it just was explicitly not offered to students or contract workers. I assume it might have to do with intellectual property assignment.

MSFT does something similar as well. Was $500-$1500 while I was there (2002-6)

GE gave me 500 for getting an application approved for filing and another 500 when/if it gets approved. Also a sweet trophy for every year that i filed something.

Getting things approved to be filed was fairly trivial. In fact we would occasionally (about 2 times per year) have meetings in my team where we would spend an entire morning just brainstorming. Then we would take the 'best' ideas and write them up (this included a minimal amount prior art research and about 4 pages of prose and diagrams if you wanted). We would discuss the ideas with patent attorneys who would advise us on whether an idea was worth pursuing. It was a very well supported process.

And the employee gets a nice trophy to display.

No percentage? That's the crime.

We talk about the RIAA abusing artists but as MS is showing these patents are worth billions to them. Engineers need to start demanding their worth, at least. If we're going to be DDoSed by patents we might as well enrich someone other than lawyers.

Cornell U. pays you 1/3 of the royalty, your department gets 1/3 and rest 1/3 goes to university. No upfront costs to file a patent. I assume other universities also have similar arrangements.

To be clear, the problem is incentives, i.e., the patent system. It makes this behavior legal and profitable. Expecting Microsoft (or Apple or IBM) to leave money on the table is silly.

Exactly. If they weren't cashing in on this problem their shareholder's would be pretty pissed and heads would roll.

Really? I have never heard of shareholders asking for it.

Should Google do the same thing to Microsoft? Google has shareholders. If they did, I would lose respect for Google that I have already lost for Miscrosoft. Somehow, I don't think Google will, and not just because Windows Mobile is closed source.

I think public opinion/brand reputation is an important thing to consider in these types of situations. For example, this poll shows only 32% of people agree with the strategy: http://www.wepolls.com/r/584161/Should-Microsoft-continue-to...

I wonder what effect that has on the other 68% next time they have a choice between Microsoft and someone else.

One of the reasons Google may not have given into the pressure is due to their stock voting structure. Larry and Sergey have final say.

Call me naive, but I actually think they try to stay away from playing in the filth even if everyone else is doing it.

Well, that's an argument of self-interest. Does the PR cost outweigh the profit?

I think a lot of firms come to the conclusion that the profit is bigger. Most of the world (consumers) doesn't give two shakes about patents.

Except the customers who are even aware of these lawsuits probably account for such a small percentage of customers as to be negligible.

What about Apple? They have used saimilar tactic. How about Oracle? IBM? Cisco? Lost respect for those too? Pretty much every company follows similar tactic to protect its interest. The fact Google does not use it is not because they "do no evil" but that they don't have any patents to ask money for.

> The fact Google does not use it is not because they "do no evil" but that they don't have any patents to ask money for.

At this point though, with thousands of phd level engineers and probably tens of thousands of the smartest people on the planet working for them, you have to conclude that the reason they have no patents is not that they are unable to produce patents, but rather a conscious choice that they don't want to.

The Nortel auction was fascinating. After leading the bidding Google just left the table and let its competitors buy up all the patents - patents that may very well injure Google in the future. I find it really weird that they opted out of at least buying some "protection" - in the end I can only put it down to a matter of principle - which is something I do respect them for.

It was probably a reasonable risk/return calculation on their part. What are the odds that they will be on the losing end of more than $3.14 billion in patent suits? How much interest can $3.14 billion earn between now and the time these hypothetical damages will have to be paid?

The calculation might have gone differently if it hadn't been for the fairly recent SCOTUS decision that made it more difficult for a plaintiff to obtain a permanent injunction against distribution of an allegedly-infringing product ( http://www.patentlyo.com/patent/2006/05/supreme_court_v.html ). If it hadn't been for that decision, the Nortel patents might have been worth $3 billion and then some.

This is in fact one of the reasons for my higher opinion of Google over Apple.

They do have patents, they just don't use them the same way.

The shadiest thing about this is that MS is not revealing the list of patents that it claims infringe and is forcing its licensees to also not reveal that. This says to me pretty clearly that were it known, a lot of these patents would probably be challenged and thrown out pretty quickly and MS would get a lot of negative publicity for exploiting them this way. I also strongly suspect that a lot of these initial licensees are getting promised some kind of kickback so that it works out cost-neutral for them to sign - MS has just been building precedents so far. What they do next will be interesting.

Legal question: could MS use patent law to get an injunction against the continued distribution of cyanogenmod?

I guess so, if they were prepared to name the patents in public. So far the settlements have all been behind closed doors and the patents and fees have (mostly) not been disclosed.

Microsoft doesn't want to reveal the full list of patents, because the open source community would go at them like a bomb finding prior art and coding around the few solid patents.

"So Android, like every large software product on the planet, infringes numerous Microsoft patents." while that might be true you can't tell until there is a lawsuit. Right now Microsoft is claiming this but no one wants to bet the other way.

One of the things Microsoft has done well is to pick the right pricing plan and the right industry. By making it a per unit fee on Smartphones you make it easy for manufacturers to pass the cost on to the consumer who then subsidizes it through a contract with their provider.

The $5 per unit HTC pays Microsoft is only $.20 a month when passed directly on to the consumer and spread out over 2 years.

This, of course, has the side effect (or possibly even intended effect) of making Windows Phone seem more cost-effective. "Free" software isn't free, if it includes a Microsoft tax, anyway.

I just hope the large Android ecosystem starts pushing for patent reform, and soon. This is just fundamentally broken market behavior...Microsoft is getting protection money. They don't even have to provide products people want, and they still make money on every smart phone sold.

Microsoft loves arrangements where you have to pay them whether or not you're using their product. In fact this was the subject of the first anti-trust case against them which was settled out of court. (Not many people remember this one.) See http://www.associatedcontent.com/article/467487/the_antitrus... for confirmation.

Doesn't this practice violate the 1994 consent decree with the FTC? The linked article states that MS could only charge computer manufacturers if MS software was installed. I guess the decree must have expired, because it seems that the Android OS situation directly applies.

BTW, fascinating article, thx! At the time, all of the MS anti-trust stuff seemed so distant, but given the current tech landscape, it seems to have taken on much greater importance.

The decree was that they couldn't charge by the machine, regardless of whether MS software was installed. I believe that Microsoft's response was to charge by the CPU instead, which technically wasn't covered in the decree, but had almost the same effect.

In this case they aren't charging by the CPU, they are charging by the operating system that ships with Microsoft's "intellectual property". If they got away with the per-CPU crapola 15 years ago, nobody will blink an eye at the current arrangement.

It certainly does seem to tell us something about the deep-seated character (or lack thereof) within the company.

> "Free" software isn't free, if it includes a Microsoft tax, anyway.

You have to wonder how galling it is for Microsoft that even after they impose this "tax" manufacturers still prefer to make Android devices and still sell vastly more of them than WP7. Effectively it values WP7 at less than free which must be rather insulting.

Edit: I think the fact MS is even trying this speaks volumes about how Microsoft misunderstands the market. Stuck in a 1990s mindset their assumption is that their problem competing with Android is that it is free while their OS costs money. They simply do not understand the difference between free and open source and assume the only difference between the two is a financial one. They fail to see the strategic value of Android being "open" to these manufacturers and don't get that it is far greater than anything they can ever impose on them via patent trolling.

It undeniably hurts HTC's profits though. Sucks for those that have to pay this Microsoft tax. And it also does hurt Google in the sense that this cost is being passed to Google's customers rather than Google taking this burden.

I would imagine the S3 purchase has the nice side effect of offsetting some of the costs per phone and gaining HTC their own licensing property. I also see the S3 purchase as helping them in the whole customized ARM game. Cell phones are massive chunks of patents and HTC knows the space well.

HTC is paying $5 per phone, but they also get protection against Apple. I don't think HTC would've signed the deal with Microsoft, if it wasn't for the Apple lawsuit.

I figure though HTC's profit per phone is likely on the order of $20 or less? (I'm guessing here but I should be in the ballpark.) Thus $5 per phone is hugely significant.

Are you really serious/sure?

http://www.isuppli.com/Teardowns/News/Pages/HTC-Droid-Incred...

Bill of Materials is just a fraction of their expenses.

We can estimate per phone profit from the quarterly report [1].

- Q1 after-tax profit was NT$14.83bn

- Handset shipment for 1Q was 9.7mn units

~ NT$1500 per phone (~US$55/per phone)

[1] http://www.corpasia.net/taiwan/2498/irwebsite/index.php?mod=...

I don't understand that logic. It's $5 taken from the cost of the device, and because of those $5 baked into the cost, it probably makes the devices $10-$15 extra at the retail store.

Also they are planning on charging Samsung $15 license fee, so that would be a lot for a $150 phone.

I wonder if Microsoft has employees working on trivial things they can patent, so they can go after other companies with similar technology after that.

Is it possible to build something without infringing on some patent anymore? (even if nobody is suing you)

     I wonder if Microsoft has employees working on 
     trivial things they can patent

I'll tell you how it works in all these big companies that are growing their portfolio:

(1) all engineers are encouraged to look for things to patent, while being actively discouraged to taint themselves by looking at other patents

(2) when an engineer thinks he has something patentable, he sends the description in his own words to a patent attorney that also knows engineering -- it's his job to translate the engineer's description into legalese.

(3) the internal patents office of the company examines the proposal, looking for prior art and declares it good to go, or sends it back to the drawing board.

(4) profit -- after a proposal is good to go, the engineer gets money, even though that patent request hasn't been approved yet by USPTO.

Now, the monetary reward isn't that high usually - it amounts to something like 1 or 2 salaries where I live, or something like that - but if you keep churning proposals, you can basically double your monthly revenue.

I bet that's one of the reasons why Microsoft Research exists.

Well its founder did leave Microsoft specifically to found a company that does nothing but patent trolling (http://en.wikipedia.org/wiki/Intellectual_Ventures). Given the number of actual products that have come out of Microsoft Research (One the last time I counted) I'd say patenting things is its primary goal at this point

Plenty of MSR stuff has ended up in the hands of other groups and ended up in shipped projects. Just look at Wikipedia: their C# research (Polyphonic C# became Cw became Joins Concurrency), F#, Seadragon, Accelerator (pretty cool, BTW), freaking ClearType... the list isn't exactly short. Surface aside, they haven't produced commercialized products, but that's not the point.

Come on. This stuff is easy. Why the content-free troll?

F# is probably your only valid point though I'm not sure I'd call yet another functional programming language an innovation.

Seadragon is Zooming technology that is, at best, a decent demo at this point (and probably designed to be patented). For people who don't know what we're talking about: http://zoom.it

Accelerator I'd never even heard of which is probably because it was introduced in 2006 and no finished product has ever come of it.

Cleartype came out of the Microsoft e-books team which wasn't part of Microsoft Research to the best of my knowledge

So giving you F# that makes two products: Surface and F# for $9 billion dollars per year. So either your argument is those two products cost the majority of that money to maintain or I go back to my original point. Microsoft Research's primary function at the company is to patent things

There are going to be plenty of things that come out of MS Research that people don't realize came from there (examples: PhotoSynth, Kinect). Expecting an exhaustive list is unrealistic. Furthermore, MS Research was founded over a decade ago when patent trolling was not as big a deal. It's pretty clear if you read about it that Bill Gates wanted to create the successor to the great post-war corporate research groups (ex: Bell Labs). I find the idea that Gates would really aspire to create a patent troll when there are much more exciting things to do with 1000 phds.

(Disclaimer: I work for MSFT, but now MS Research)

... and you also get stuff like this: http://www.youtube.com/watch?v=WmC28cXWqLc

Don't get me wrong, I think the idea is really cool. The thing is that the 80's midi background track was just a terrible way to implement it.

ummm ... didnt Photosynth come from the SeaDragon acquisition and Kinect came from the PrimeSense partnership ?

OTOH, I think .NET/Mono are awesome pieces of language innovation.

EDIT: oops - didnt see that this was mentioned below.

Well, Kinect owes quite alot to PrimeSense so I certainly wouldn't categorize it as a 'MS Research' product.

Balance. In seeking to lift one group you cast aside another hard working group of people. Certainly PrimeSense contributed much, but to discount the hard work of those in MS Research as something less by wrapping them in quotes only serves to despoil your message. You commit that which you wish to redress.

See what Johnny Chung Lee said of his time there for a more balanced look of the records.

Ehh, given how much Kinect relies on the functionality offered by PrimeSense, I'd think it would rather be UNBALANCED to claim it to come from MS Research.

The Kinect only relies on Prime Sense in the form of their hardware. All the algorithms and software are entirely developed by MS Research. This point is made more clear by the fact that Microsoft didn't acquire exclusive rights from Prime Sense but is instead banking on the superiority of their algorithms.

I've played around with the Kinect, and without Microsoft's code, all you really get from the hardware is a depth image (think an RGB image with distance from camera for each pixel instead of intensity). Everything else is developed by Microsoft, and it is not an easy feat.

Prime Sense developed their own software for pose detection and tracking, but it is inferior to the XBox360 implementation.

Just a note: Cleartype was indeed invented by the ebooks team originally. But the algorithm was significantly improved with the help of John Platt at MSR. This is one of his early papers on the topic: http://research.microsoft.com/apps/pubs/?id=68972

Their work is used in the academic community. E.g. they have a suite for examining/debugging concurrency called CHESS which was used in a class I took in grad school and is related to and referenced by some of the research my (former) academic advisor professor does, which work is used by NASA to improve space program software.

Yes, and like their other MS Research projects it's licenced under the 'Microsoft Research Licence' which means that whatever modifications/enhancements you do to the code can only be used within this academic setting. HOWEVER, Microsoft themselves can use your modifications for whatever purposes they want, like sell them. Sweet deal...

As with any other software license (including the GPL), if you don't like the terms, don't use it.

Isn't it a bit misleading to put the MRL and the GPL in the same league? I agree with the "If you don't like the license, don't use the software" attitude, but the terms of the MRL are quite restrictive.

ClearType is "freaking" ancient http://www.grc.com/ctwho.htm

I'm sure that wasn't the original intent. But given that they have failed generally at commercializing their innovations, patent lawsuits are a good backup strategy and probably gives Microsoft's patent lawyers a good justification for their continued existance.

notice: everyone is dirty at this game, e.g. google's recent patent application for google doodle "A system provides a periodically changing story line and/or a special event company logo to entice users to access a web page."[1]

[1]http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sec...

Sure, but they have to do this. I only consider it evil once a company starts suing other companies that they know can't compete based on patent portfolio size.

No no no NO!

This is wrong on so many levels. If you don't like the process, don't support it. Google is _not_ better than any other company out there. Sure, you have sympathies based on previous encounters and actions, but the goal is the same for every company: Make money.

You're saying that it's different if Google tries to patent something. It's not. There's no moral involved here, this is just plain business. Either you like patents or you don't. Hoping that 'the good guys' apply for lots of patents is crap.

This is a static view of a dynamic situation that can often result in a feedback loop.

Have patents but losing your monthly revenue? Why not sue others to keep your stock price afloat (instead of innovating your business or products)

The mere act of having such legal armaments creates a moral hazard.

"You might think Google could deal with this by just not infringing Microsoft’s patents, but that’s not how software patents work. Android has roughly 10 million lines of code. Auditing 10 million lines of code for compliance with 18,000 patents is an impossible task"

There's a great startup in that sentence for whoever cracks the algorithmic challenges.

Not really, unless you're looking to sell the software to the patent trolls and not other startups/legitimate businesses.

Even if you could do this (it requires machine learning far beyond what is currently available), the answer would always be "this software violates many patents". And once you know that for sure you're liable for triple the damages when your business is successful enough for the patent holders to come around to wring their money from you. Unfortunately, it really is better to just be ignorant in this situation and let the lawyers figure it out.

100% correct. You never want to know if you violate a patent, so this idea will only be useful for patent trolls, as you said.

s/startup/technological singularity/

function doesThisCodeInfrigeOnSomePatentSomewhere(codeString) { return true; }

you should patent that.

I'm pretty sure that "algorithmic challenge" is NP-complete.

Hah, quite the optimist. In most commonly used languages deciding the equivalence of two code fragments is undecidable.

Kids, this is why we learn math. So we don't waste our time on what is impossible.

Not to the business' advantage to know anyway, more damages.

An important point not mentioned in this article is that whilst MS are demanding payment, it is believed that they will lower the payment for producing Windows phones. I would guess this is a huge part of this demanding payment strategy and not just the cash.

Source for pushing Window on phones: http://www.reuters.com/article/2011/07/06/samsung-microsoft-...

Oracle's Android Shakedown: http://www.cio.com.au/article/392822/oracle_win_would_strain...

After Nortel's patent auction earlier this week, I expect Apple to get in on that game to.

Apple aligned itself with Nokia and Microsoft (both of which are on the WPx platform) in this purchase. I guess they both see a common enemy in Android.

I get the feeling that the whole group (Apple, Nokia, Blackberry, and Microsoft) seriously wanted the LTE patents off the table. I think Google isn't in the group, not so much as a common enemy thing, but as a cannot trust them to act like the rest of the corps in a patent group. I really get the feeling that the whole h.264 thing through up warning signs to Apple and Microsoft. These actions (weird bidding, opposing h.264) appeal to Google's technically inclined supporters, but they do give business people pause.

The same with the FaceBook + Skype deal, Microsoft is putting their weight against Google. The big boys fighting it out, fun to watch.

Although Microsoft has a small stake in Facebook and has been a partner for a while now, the Skype integration was probably started before the buyout offer.

Impossible! I Could Code That Over A Weekend(tm).

.. FB's scale?

>"Intuitively, this doesn’t make much sense. Most people would say that Google has been more innovative than Microsoft in recent years"

That's not using intuition. That's using an opinion poll and ignores the length of time it takes to apply for and be granted a patent.

When the author goes on to point out that Google has 700 patents and Microsoft has 18,000, this would seem to be circumstantial evidence that Google's innovations are more likely to be based on the work of others than original research - particularly given the interest which companies have to file patents defensively.

This is not to say that Microsoft's claims are valid (regardless of the obvious fact that the past actions of Armonk have no bearing on their validity) or that software patents are a good thing.

> Most people would say that Google has been more innovative than Microsoft in recent years—especially in the mobile phone market

Would they? I don’t think so. Android is iPhone + Symbian + Blackberry + Java. Windows Phone 7 is a new beast.

Not to comment on your argument about Android, but the statement (in original article) definitely seems to me presumptuous. I stopped reading after that.

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