Google Responds To Microsoft’s "Gotcha": They’re Diverting Attention
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On the actual merits though, Google seems to be completely lost in the world of IP tactics. They should have worked to remove all of these patents off the table as cheaply as possible. The available cash that MS+Apple simply dwarfs what Google has. Head to head, if MS+Apple want the patents they'll win them. Trying to win them outright as defensive patents was a stupid attempt.
The fact that their current IP strategy seems to be to buy IP is absurd. Google really needs to start producing significant IP in the mobile space. Their current IP strategy is naive, and likely costly. The fact that they didn't think about this three years ago, when Jobs was on stage talking about patenting everything, up and down, is a firing offense, IMO.
There is no sense in buying patents jointly with Microsoft because then they couldn't use the patents to block Microsoft from extorting handset makers which defeats the whole purpose. It's not about buying patents for the sake of having patents.
If any of the reporters had bothered to ask an IP lawyer all this would have been made clear to them, but they unthinkingly quote Tweets and print comments from Florian Muller instead.
And are you actually suggesting that producing IP is more efficient and quicker than buying it?! I very much urge you to think on that.
Of course not. But you take those patents off the table. It's 7,000 fewer patents you have to deal with. Even under reasonable terms, if MS gets enough patents, they could raise licensing fees such that doing WP over Android is a no-brainer. Now the Android licensing fees are just a nuisance.
Also are you actually suggesting that producing IP is more efficient and quicker than buying it?!
Yes (well cheaper -- not quicker). At least buying targeted patents. These large portfolios are going for about $500k-$750k per patent. I wouldn't be surprised if Google paid $1M each for the 1,000 IBM patents they bought.
The big advantage they get w/ buying is the patents are available now. But this is why this is a firing offense. Everyone else in the industry has been building up their IP warchest for some time. Apple telegraphed it years ago that they'd fight with patents in the mobile space. Google seems to be surprised.
A billion dollar transaction does not happen quietly, and IBM would have no reason to keep it quiet. This was strategic for IBM (which is actually a bizarrely responsible corporation): They have a strategic interest in seeing Google empowered.
It wasn't very quiet (that it happened). People think Nokia may have gotten $630M from Apple as licensing fees showed up in the quarterly report. Of course there isn't a line item that says, "From Apple". My point is that people just knew a transaction took place, but didn't know the price. This is the same thing with IBM. Maybe IBM sold for less, but they're not stupid. They could empower Google and get a lot of money at the same time. As you say, IBM is responsible, and responsible companies don't leave money on the table.
Terms of these sorts of private negotations and settlements are usually kept quiet. Often part of the agreement itself.
Those patents can become harmless if Google acquires some other patents Microsoft and Apple infringe and force them into cross-licensing.
Obviously, Apple and Microsoft would be more inclined to litigate because an unencumbered Android would doom their respective mobile platforms (Apple less than Microsoft, in this case)
Seems to me like Google is taking advantage of a growing anti-patent sentiment in the tech community that's beginning to spill over into the mainstream and capitalizing on the idea that the innovation-stifling patent regime is contributing to a stagnating economy.
Exhibit A: http://www.bloomberg.com/news/2011-08-02/google-hires-federa...
Exhibit B: http://www.economist.com/blogs/democracyinamerica/2011/08/in...
Exhibit C: http://www.thisamericanlife.org/radio-archives/episode/441/w... http://www.npr.org/blogs/money/2011/08/04/138934689/the-tues...
The public generally doesn't care. The courts won't change course without congress. Congress won't make a big change. Minor reform at best (I doubt we'll see much more than what is already in the oven).
The problem is that Android isn't viewed as innovative by most consumers. I think in a PR battle between Apple saying Google copies, and Google saying that Apple is blocking them from innovating -- Apple wins.
And the other issue is that a lot of the patents at stake are HW patents. Undermining HW patents is a much harder sell.
Every dollar Microsoft spends on patents cannot be spent on lobbies. And the other way around applies to Google: every dollar not spent chasing patents can be spent lobbying for patent reform.
And, while that leaves hardware patents untouched, they are not the problem. Microsoft is extorting Google partners using bogus software patents, not hardware ones.
This isn't a matter of lobbyist, rather that congress already has a big piece of legislation they're moving now on patent reform. First-to-file is years in the making. And for 95% of patents its a total no-op. Congress just will not move quickly on this. And I think Google is going to focus its lobby efforts trying to keep people away from serious antitrust investigations against them, more than patent reform.
And, while that leaves hardware patents untouched, they are not the problem. Microsoft is extorting Google partners using bogus software patents, not hardware ones.
Google wants to make this anti-MS, because MS has a worse rep. Their real concern though is Apple. For example, notice who's not shown interest in the InterDigital patents? Microsoft. Who has? Apple, Google, Samsung.
Apple doesn't want to get $10/handset for Android. They want to block Android from shipping, period. And Apple IS using HW patents to block Android. For example, they've used HW design patents such as #D618,677. Or even this patent on volume rockers: #7,863,533.
MS is happy to just collect some revenue, and try to slow Android down so they can get their phones up to speed with Mango/Tango. MS will never make a lot of money directly from the cell phone market. 100M units sold is about $1.5B in direct revenue for them. Not chump change, but not a lot of money (on par with about how much money Visual Studio makes). For Apple this is almost their complete business now. They make $250/unit. $10 royalty from Samsung doesn't offset the fact that someone bought an Android machine rather than iOS.
Plus the Nortel patents give them a bunch of HW patents that Apple will likely assert, especially if Android begins to make another push.
It's HW patents against devices running Android.
If Apple want to attack OEM on hardware patents, good luck to them.
If? Those patents I shown are part of actual lawsuits against Samsung/Motorola in court now. This isn't a hypothetical -- I'm telling you what is happening.
Samsung, Motorola and even HTC (with S3 and even their own) have tons of HW patents, this is a game Apple cannot win as all OEM could block Apple from shipping their devices, remember, only only one patents from these OEM has to be valid to block Apple from shipping.
Apple has taken that plunge already. Again, this isn't a hypothetical. All three companies you note are in court already. All three have countersued.
I'm not saying this might happen. I'm saying it is happening. Apple has already asked, and in at least one country received, injunctions on devices.
Apple isn't sitting around saying, "Lets just use SW patents to stop Android the operating system proper". They're using HW and SW patents and trade dress, and trademark to go after Android (indirectly by targeting OEMs and devices running the SW).
Google supporters seem to think this is a fight against the evil empire of Microsoft, and want to ignore Apple exists. It would be convenient if they didn't, but the fact of the matter is that Apple is likely to be the real fly in the ointment. MS might slow Android down, but it'll be Apple who crushes it.
But Apple teaming up with Microsoft is what made the issue cross some threshold for me. Individual corporations acting in independent self-interest is one thing, but industry incumbents forming a cartel to shut out competition, even if it still counts as self-interest, for me crosses a line.
Apple would use the patents regardless of the OS the phones were running. It's not Google's job to defend Motorola from any kind of patent problem - and Motorola owns quite a lot of patents in the mobile segment they can use to get cross-licensing from Apple. I doubt HTC and Samsung have the same luck.
> They're using HW and SW patents and trade dress, and trademark to go after Android
The only reason Apple is not going against WP7 phones is because WP7 doesn't represent a threat. If it ever does, Apple will use their prodigious legal to provide an excuse to phone makers to stop wasting money making the WP7 phones they have to make in order to reduce the Microsoft tax on Android phones.
Microsoft and Apple don't want Google to have defensive patents (patents that both of them know that they infringe on in droves, otherwise they wouldn't be concerned about them).
They should have worked to remove all of these patents off the table as cheaply as possible. The available cash that MS+Apple simply dwarfs what Google has.
Dwarfs is a gross exaggeration. Further both Apple and Microsoft have shareholder responsibility. Microsoft has already made questionable judgment calls to maintain the upper hand -- billions of dollars in patents to make a few hundred million a year in extortion fees, while empowering their own primary competitor (Apple)? It's extraordinary. Apple shareholders are going to start demanding their cash back if it looks like one giant ego pile.
And Google can't quietly buy patents because the people selling want to get as much as possible for it. Well except for IBM who just wanted to stick a gank in Oracle.
The fact that their current IP strategy seems to be to buy IP is absurd.
Many of the patents that Microsoft and Apple are using against Android precede the mobile explosion. They are older companies, having had a long time of big profits to pay people to sit around submitting patent applications.
On an unrelated note, this is a very different kind of MSFT PR, and almost completely brought about by Frank Shaw. In the old days, MSFT would have put out a boring press release filled with corporate speak. Frank has brought a real-time, plain-speak, slightly aggressive approach to dealing with crises like this one and the earlier Bing/Google toolbar spat. Interesting shift in PR strategy.
Contrast these arguments - back in the 90s, MSFT was accused of killing off Netscape by essentially giving away a browser for free using the revenue from Windows and Office. One could argue that Google is doing the same thing, funding Android with its revenues from ads.
Let's forget Android for a second -look at turn-by-turn navigation. That's an expensive product to build but Google, by giving it away for free (again, subsidized by its other revenues) and is causing serious trouble to other companies which have the misfortune of not having an alternative revenue source.
Is it 'fair' that Google can basically disrupt industries by giving away things for free just because it gets money through another source? You can see how that argument could be made, whether it is right or wrong.
I personally don't think any of this is either 'right' or 'wrong'. It's all business between corporate behemoths.
And another important part of the MS antitrust lawsuits were that they were bundled with the OS, which they had a monopoly on in the market. Google's closest thing to a monopoly is in search, and you can use search without using Android.
The two cases are only superficially similar.
I notice, though, that you don't seem to actually advocate any position; you merely attribute accusations of unfairness to "people." If these positions aren't yours or you don't agree with them, why bring them up? If they are your positions, why not state that clearly? Your slippery lack of position just makes me trust your arguments less.
http://techcrunch.com/2011/03/25/search-googles-castle-moat/
>And another important part of the MS antitrust lawsuits were that they were bundled with the OS, which they had a monopoly on in the market. Google's closest thing to a monopoly is in search, and you can use search without using Android. >The two cases are only superficially similar.
What about this then? http://www.webanalyticsworld.net/2008/01/mapquest-vs-google-...
Or Google finance and other Google services?
Your argument for maps and finance is stronger, but the analogy isn't great. For one, Google doesn't have close to the monopoly that MS had. For another, it's really hard to draw the line between the products, and equally hard to say whether Google's use of its search engine to point to its own services is unfair, if it really believes its own products are better. I would characterize their position on this issue as still some distance from MS + IE on the 'fair' to 'unfair' spectrum, but still in 'fair' territory. Of course, I never found the bundling line of argument against IE to be particularly compelling.
>That's certainly an interesting way to look at it, but it doesn't change the fact that Android does make money, both for Google and for carriers/manufacturers. So, again, it's not an artificially lowered price, and while it certainly augments search, it's not subsidized by search.
Google's revenue sources from Android are mostly mobile searches that would happen anyway. I bet they make as much if not more from iOS devices.
http://techcrunch.com/2010/10/15/google-android-money/
http://www.mobilespoon.net/2011/07/can-microsoft-generate-mo...
It's a moat because Google was afraid that it might get locked out of mobile search default (eg. WP7) and while iOS uses Google, what if Apple changes the default to iSearch or Bing? Remember how Apple didn't approve Google voice for iOS for a whole year? Google would be screwed out of mobile search revenue in a big way, esp. if Bing/iSearch/xyz are close enough to Google.
>Your argument for maps and finance is stronger, but the analogy isn't great. For one, Google doesn't have close to the monopoly that MS had. For another, it's really hard to draw the line between the products, and equally hard to say whether Google's use of its search engine to point to its own services is unfair, if it really believes its own products are better. I would characterize their position on this issue as still some distance from MS + IE on the 'fair' to 'unfair' spectrum, but still in 'fair' territory. Of course, I never found the bundling line of argument against IE to be particularly compelling.
Google has a LOT of marketshare, esp in many non US regions. Eg 91% in UK.
http://www.chandlernguyen.com/2011/03/search-engine-market-s...
IE was actually better than Netscape in the late 90s, early 2000s. Netscape screwed itself by not releasing a new version during the dotcom boom between 1997 and 2007. http://www.joelonsoftware.com/articles/fog0000000069.html
So the point about Google really believing that it's product was superior doesn't matter. A maps startup would need to be 10x better than Google maps out the game to even get funding since searching on Google for the name of a city doesn't even mention MapQuest, Bing Maps or Yahoo Maps. Would you support a forced default map choice on Google like the one for browsers in EU on Windows?
A LOT of marketshare isn't a monopoly and I'm not sure what bearing regional marketshare has on your argument. A search for "Portland Or" gives me mapquest on the second page. "Portland Or Map" gives me mapquest as the second search result.
"IE was actually better than Netscape in the late 90s, early 2000s. Netscape screwed itself by not releasing a new version during the dotcom boom between 1997 and 2007."
So, are you arguing that MS was being perfectly fair and shouldn't have been convicted? At this point, I'm really not sure what you're arguing. I think my position is pretty clear. Are you arguing:
1. MS was wrong and now Google is similarly wrong. 2. MS was not wrong, but Google now is. 3. MS was perceived as wrong by the public, and so Google will be too because of similarities.
It's starting to sound like you're representing 3, which isn't very interesting to me.
I am sure products like MapQuest etc. have been hurt by the leveraging of monopoly in the same way that Netscape was, but techies seem to believe it's ok since they Google's services. But IE was better than Netscape in those days anyway. It's just that many techies are heavily biased against MS and towards Google and Apple, regardless of the merits of the arguments.
It is not fair at all, but as long it just hurts companies who are not able to compete it's the way of the market.
What you are referring to is a difficult matter, it is basically the discussion if open source/free software is a bad thing because it kills companies who have to charge for their product.
There is a lot of material about this stuff, but i personally think open source is a good thing for society in the long run.
>What are you doing on Hacker news? This is all about disrupting industries trough a better product. Android is free so this is obviously an improvement to something you have to pay for, or do you call Linux unfair?
Erm... HN has LEGIONS of Apple fans who believe Android illegally ripped off Apple's IP and that it is a plain copy. Gruber gets a LOT of traction on HN on this topic. Are we even reading the same HN?
I am going to assume that you didn't mean this to come across as elitist and mean-spirited as I originally read it. Hacker News is also about civility and quality discourse, right?
I'd go with the term "unethical". MS has been positioning itself to start throwing patents against its competitors for a long time, now. If they are able to do this, it will be against the interests of those who believe in ... freedom, not to put it too dramatically.
There's a fine line to be walked between "caked in corporate-speak" and "tries to be your best buddy", I think MSFT is doing well walking it.
Not quite sure where this logic comes from. Surely they're only valuable if they're relevant and strategically useful?
InterDigital’s engineers invented some of the technology for high-speed mobile phone networks now used by the world’s biggest handset makers.
This is a link on some of their "breakthroughs" covered in their patent portfolio:
http://www.interdigital.com/patents/category/patent_portfoli...
"North" is the key word here. This could get crazy. I bet Nathan Myrvhold is laughing to the bank right now.
That's $5BB that won't be used to create new products and technologies. It's $5BB that won't be used to hire new employees, and it's $5BB taken out of the pockets of shareholders. At least taxes go back into the economy. They might as well throw the money in a pile and set it alight.
Feel free to use it!
It sounded to me that google's response was that they didn't partner because then they could not keep those patents just to themselves. Somehow I feel I'm misunderstanding it? That sounds too dumb of a response to be accurate.
Microsoft responded that they invited Google to jointly buy patents.
Microsoft is currently threatening Android hardware partners with their existing patents to extract fees. Patents jointly owned by Google and Microsoft would not affect this, patents owned only by Google could force Microsoft to back down.
EDIT: That's more like it... the next TechCrunch article uses a screenshot from Reservoir Dogs, which was a pretty awesome movie IMO. ( http://tctechcrunch2011.files.wordpress.com/2011/08/reservoi... )
A joint acquisition of the Novell patents that gave all parties a license would have eliminated any protection these patents could offer to Android against attacks from Microsoft and its bidding partners.
Having the license to the patent means you get to use the patented technology--no one can come after you. That's the protection, you get to use it. This is bullshit, Google didn't decline the offer because it didn't give them protection, they declined the offer because it didn't give them an ability use those patents against Microsoft.
http://en.wikipedia.org/wiki/Defensive_patent_aggregation
It's not just to stop from being sued over that particular patent, but to be able to use that patent to counter-sue when litigated for other patents.
Google has yet to use any of its patents offensively.
Microsoft’s objective has been to keep from Google and Android device-makers any patents that might be used to defend against their attacks.
Where did they argue that it was for offensive reasons?
And since when a weapon directed at someone who's attacking you is offensive?
Because Google didn't make that argument, no matter how terribly M G Sielger may misinterpret it.
"They’re doing this by banding together to acquire Novell’s old patents (the “CPTN” group including Microsoft and Apple) and Nortel’s old patents (the “Rockstar” group including Microsoft and Apple), to make sure Google didn’t get them;"
That's what Google actually said. Google partly owning them in concert with Apple and Microsoft does nothing given that Apple and Microsoft are the primary antagonists of Android.
I haven't been following this closely, but isn't this phrase contradicted by having been invited to be in the band of Rockstars?
Google tried to give the impression that they were blocked from getting the patents at all. Now they reveal their true motivation, which wasn't a simple "get them", but rather a more nuanced "we wanted to get them, and also have them not get them, so that we could use them against them". I think this is a perfectly valid reason Google gives, but its not what they were trying to evoke in their first blog post. They were trying to tug at heart strings at first -- this update is just kind of like, "Oh, big companies doing what big companies do -- again."
Google doesn't just want to counter all Microsoft's future patents that they will buy, because that still doesn't change anything. They want to counter Microsoft's old patents, the ones they are using right now.
Keep your friends close, keep your enemies closer, and the enemy of my enemy is my friend.
Here's the problem: Even if Google won the Novell bid, they would not be able to use the patents as a defense against MS. MS is licensing the patents from Novell, and I think that if any other party bought the patent pool, they would continue to license them from whomever bought the pool. So Google couldn't use them in a defensive manner. They could make life annoying for MS by increasing the fees, but that's about it, especially because if they increased the fees too high, they'd doing the exact same thing that MS is.
Plus, I think that the DoJ's decision to put the patents under GPLv2 and the OIN patent license would have been made regardless of who actually bought the pool, considering that a lot of the patents apply to Linux. So even if Google had won, it's not clear if it would have actually helped them in the end.
The DoJ ruling merely means they can't really leverage those patents against Google to stifle them more, which I'm sure the legal departments of Apple, Microsoft, and Oracle would have loved to do. It means those patents are less of a threat, but it wasn't a win for Google either.
I don't agree that the DoJ would have made the same decision in the case that Google had exclusively won the patents. I think the litigious nature of Apple, Oracle, and Microsoft, especially towards Android, had quite a bit to do with that decision.
I feel like Google is pulling the same thing they pulled with the FCC's 700Mhz Spectrum auction: Highlighting the faults of the system, advocating for consumers, getting some help from the government and trying to get their way without actually paying for it.
No. The DoJ ruling means that they can't leverage the patents against Linux. The OIN patent license only applies to Linux code. That doesn't necessarily apply to the Android UI, for example.
That's the primary reason that I think the DoJ would have made the same ruling. It gives the Linux code the same protections that they had with Novell.
That's the whole point of getting these patents - so you're more "dangerous". If Microsoft had them too, they wouldn't be a threat to them.
MSFT: We gladly would have been part owners in a stockpile that can never be used on us.
It would be like fighting the cold war by investing in nuclear stockpiles that can never be used unless both the USA and the USSR put their keys in the launcher. That's not how deterrence works.
Now |A| > |C| > |B|, by a long shot. Defensive patents work by allowing you to countersue anyone who sues you, and claim they are infringing upon your patents. In the end, the parties settle out of court and agree to a cross-licensing deal, which amounts to, "I won't sue you and you won't sue me."
Because of the general stupidity of most patents issued, this is a game of quantity, not quality. Thus having 10,000 patents is far preferable to having 1,000, even if those 1,000 are for genuine innovations. This brings us back to our sets of patents.
Google doesn't have much to defend themselves with, hence their desire to acquire C. However, if they jointly acquired C with Microsoft, those patents could only be used to defend themselves against entities other than Microsoft. As MS has the rights to C, Google couldn't sue them for infringement, whereas Microsoft could still sue Google for infringement on A. The only thing Google would have gained is protection from Microsoft suing them for infringement of C. Since Google was primarily concerned about Microsoft suing them, this wouldn't have done them any good. It would have amounted to a multi-billion dollar settlement with Microsoft, only against suits based on C. It simply wasn't worth it for them, as they would have been sued anyway and still had no protection.
Whose startup among HN readers can afford patent lawsuits say if either MSFT or Google come knocking?
So where is the coverage of how dismal the current patent reform legislation at TC?
"The day big corporations come knocking at your door threatening lawsuits...that is the day you know you've made it".
No startup will have to worry about patent litigation from giants, unless they are perceived a threat. And if they are perceived a threat, they are significant enough to combat or negotiate their way out of it.