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Microsoft Attacks Android in HTC Patent Deal

Microsoft and HTC signed a patent deal involving HTC's mobile smartphones running the open source Android operating system.

The deal was announced by Microsoft on Tuesday with few details, except that HTC will pay royalties to Microsoft and that the two companies were expanding their business relationship. However, Microsoft sent strong signals today that that the HTC deal is part of a larger intellectual property (IP) battle, and one of the targets is the Android mobile OS.

Microsoft, of course, has its own competing vision for the smartphone market, chiefly centering on its budding Windows Phone 7 Series operating system, as announced at the MIX 10 event in March. HTC, in addition to settling with Microsoft over IP, is a partner with Microsoft on the upcoming technology. The Taiwan-based mobile phone maker announced in February that it plans include the Windows Phone 7 Series OS on HTC mobile devices to be released later this year.

The Android mobile OS was developed by Google after it acquired Android Inc. in 2005. Google released the OS into open source and it is now maintained as a free platform by the Open Handset Alliance, a consortium of chipmakers, handset makers, mobile operators and software companies. However, neither Microsoft nor Apple -- builders of competing mobile OSes -- are members of the alliance.

Apple announced a lawsuit against HTC in early March, contending that HTC infringed on 20 of Apple's patents with regard to the "user interface, underlying architecture and hardware" of Apple's iPhone.

Microsoft has reacted with sympathy to Apple's claims. Commenting on Apple's HTC lawsuit later that month was Horacio Gutierrez, Microsoft's corporate vice president and deputy general counsel of intellectual property and licensing. He argued in a blog post that the smartphone business is "still in a nascent state." Patent battles in the mobile space are shifting from earlier intellectual property battles over radio technologies, Gutierrez, contended. Smartphone innovation today is happening in the general software stack that enables new capabilities in mobile devices.

"Now the industry is in the process of sorting out what royalties will be for the software stack, which now represents the principal value proposition for smartphones," Gutierrez wrote in the blog post. He added that "Apple v. HTC was not the beginning of this process, and it isn't the end of the story either."

Michael Gartenberg, a partner with the Altimeter Group, noted in his blog that Microsoft's settlement with HTC implied "more pressure on the notion that Android is 'free'."

"By creating uncertainty in the market regarding patent issues, both Apple and Microsoft have now created some degree of uncertainty for potential Android licensees," he wrote, adding that Google's reaction to the lawsuits remained an open question.

A spokesperson for Google on Wednesday offered no comment on Microsoft's IP deal with HTC.

The preferred licensing agreement, according to the Android Open Source Project, is for companies to use the Apache 2.0 open source license for the Android OS. However, Rob Enderle, president and principal analyst at Enderle Group, noted that the open source licensing doesn't mean that Google will step in where other software patent issues are involved.

"Phone makers have always had to assure the IP that is in their phones," Enderle explained via e-mail. "Typically they do this by licensing or building a product where they get rights to the IP. With Android, much of the IP isn't actually owned by Google and so Google can't assure the related rights."

Enderle noted that the issue may have reverberated with the recently announced acquisition of Palm by Hewlett-Packard because HP too had been looking at using Android. HP announced on Wednesday that one of the reasons for its acquisition of Palm was to obtain Palm's webOS and associated patents.

No further details on the Microsoft-HTC IP agreement were returned by press time by HTC in response to a query. However, Microsoft responded on Wednesday with a statement attributed to Gutierrez indicating that other mobile device manufacturers using the Android OS are being targeted for IP infringement complaints.

"Microsoft has a decades-long record of investment in software platforms," Gutierrez stated. "As a result, we have built a significant patent portfolio in this field, and we have a responsibility to our customers, partners, and shareholders to ensure that competitors do not free ride on our innovations. We have also consistently taken a proactive approach to licensing to resolve IP infringement by other companies, and have been talking with several device manufacturers to address our concerns relative to the Android mobile platform."

Nearly two years ago, a Microsoft official claimed that the open source Linux operating system violates 235 of Microsoft's patents. The settlement with HTC tends to validate Microsoft's claims, according to Roger Kay, president and founder of Endpoint Technologies Associates, a technology market analyst firm. He added that Microsoft just wants to get paid for its "prior art."

"Rather than take an Apple approach, which involves suing people who violate your IP, [Microsoft] takes a licensing approach where they try to convince them that we really do have the rights to that stuff, and you should be paying us for it," Kay explained in a phone interview.

"The thing that makes it interesting is that not only is the payment likely to be significant (even though they haven't said what it is), but it also sets a precedent for other phone makers following Android. They may find it difficult to argue against it," Kay said.

He added that there is no open source IP manager overseeing free OSes. However, if you license Windows Mobile, Microsoft has cleared all of the rights having to do with it, and that's included in the price. You get a license that indemnifies the company building on the software.

About the Author

Kurt Mackie is online news editor for the 1105 Enterprise Computing Group.

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Reader Comments:

Sun, Aug 1, 2010 Karl UK

It's clear Microsoft failed in this area but its not desperate to get back in the game. Android has been pitched right and globally people want it. Apple have done well but also are making big mistakes through abuse, control and a big brother attitude. MS and Apple will not win, because there is a key factor here. The consumer, and the consumer decides, not Microsoft, its partners or its shareholders. Mr Gutierrez best remember that! Android is doing all the right things, and innovating, and linking openly. It's the failure by MS and Apple to do what Google has done. Google seems to innovate a lot these days, Apple to some extent. Microsoft does not! its a spend force. Microsoft should be worried, Google's android on tablets could kill its market in the future. It should be absolutely afraid and will get desperate!

Thu, May 6, 2010 Vladimir Kelman MD, USA

Sure, Google is a large corporation and tries to earn money as much as possible too. However, that "different business model" which Google uses, correlates to open Web, corresponds to improving customers' ability to use Internet [for free], to the entire well-being of WWW. Google makes more money when we are more productive on Web, use more Web. Google also does not take royalty fees from OEMs for using Android, so it's good for businesses as well. That's why it clearly catches Apple and goes ahead of Windows mobile (Phone 7); that's why both Apple and MS try to stop Google using anti-competitive measures.

Fri, Apr 30, 2010 GetSmart Akron, OH

What just because MS is huge they get to extort money and get protection under the law? Sounds like a page from IBM. We know that MS gives nothing free out of the goodness of their hearts. I'm no MS hater and if they prove that any of their patents have been infringed, they deserve a reasonable settlement. However, an open source product violating a patent is either unlikely or the patent is bad.

Thu, Apr 29, 2010

MS just wants what is due them... What just because MS is huge they get no protection under the law? I get so tired of the MS haters. I doubt that google gives things away for free out of the goodness of their hearts... They are big business just like MS. They are just using a different business models.

Thu, Apr 29, 2010

THE IS SOOO FULL OF B F S, I HOPE GOOGLE WILL GET THEIR HANDS DIRTY IN A LAWSUITE> M F $ IS MAKING MONEY ON ANDROIDE PHONES> F U K THEM!

Thu, Apr 29, 2010

Hate less and comprehend more.

Thu, Apr 29, 2010 Vladimir Kelman http://webofandroids.blogspot.com/

Effectively, Microsoft again tries to stop a successful competitor by using anti-competitive means. I don't see it as much better than what Apple did. It's pretty clear both companies are really afraid of Android platform which is showing clear ability to outperform them.

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