News

Microsoft Adds Wistron to String of Android IP Deals

• By Kurt Mackie
• 07/06/2011

Microsoft on Tuesday announced yet another intellectual property (IP) deal associated with the use of the Android open source mobile operating system.

Wistron Corp. has signed on to "broad coverage" under Microsoft's patent portfolio. The deal was associated with Wistron's use of "Android or Chrome" platforms in a number of consumer devices, according to Microsoft's announcement. Those devices included tablets, smartphones and electronic readers.

Microsoft will get royalty payments from Wistron under the terms of the deal, which weren't disclosed. Of late, Microsoft has shown a propensity to get device makers to pay for IP associated with the Android OS, which was originally fostered by Google. Android was released as free open source code for others to use, but Google did not offer legal indemnity on patents.

"Google has lost all credibility concerning 'patent-unencumbered' [regarding Android]," wrote Florian Müller, an IP analyst based in Starnsberg, Germany, in a Twitter post. "If they make such claims again, people will just laugh."

Brad Smith, Microsoft's general counsel and senior vice president for legal and corporate affairs, sent a Twitter post yesterday reading, "Our Wistron deal today makes for four Android #patent license agreements in nine days. (No need to calculate pi to figure that one out.)." In addition to Wistron, those Android agreements include deals with Velocity Micro and Onkyo, as well as a deal with General Dynamics Itronix.

Smith's allusion to "pi" likely refers to Google's failed bidding strategy on Nortel patents, which could encumber Android's IP even more. Google reportedly placed three arbitrary bids reflecting the numbers for pi, Brun's constant and the Meissel-Meertens constant.

What's new with the Wistron deal is Microsoft's reference to the Chrome platform. Microsoft confirmed through a spokesperson today that the Wistron patent coverage is associated with the use of Google's Chrome OS Internet operating system. Google announced in May that Chromebook products running the Chrome OS would be available on June 15 from Acer and Samsung.

Taipei, Taiwan-based Wistron is an original design manufacturer that provides services to original equipment manufacturers in Asia, Europe and North America. The company once served as Acer Inc.'s design manufacturing services entity, but it was spun off from Acer years ago in 2002.

Meanwhile, a Reuters story indicated today that Microsoft wants Samsung Electronics to pay $15 for each of its smartphones sold using the Android OS. That claim was reported by "local media," according to the Seoul, South Korea-filed Reuters story. Samsung's flagship smartphone product is its Galaxy S device, which uses the Android OS. That device is also the target of a patent infringement case filed by Apple on Tuesday, according to a Bloomberg story. Apple is claiming seven patent infringements before the U.S. International Trade Commission.

Samsung thus faces legal pressures from both Microsoft and Apple, and it's likely tied to its Android use, Müller indicated in a Twitter post today: "Samsung *may* find that its adoption of #Android was a huge strategic mistake, *potentially* costing Apple as customer, MSFT as supplier."

Microsoft reached an IP licensing agreement with mobile device maker HTC in April of last year over Android use. Supposedly, Microsoft gets $5 for each HTC Android phone sold, according to Citi analyst Walter Pritchard. Pritchard also stated that Microsoft has been seeking "7.50 to $12.50 per device" from other Android smartphone makers.

Some device makers have resisted the pressures on Android IP claims. Microsoft is pursuing legal actions against Barnes & Noble's use of Android in Nook e-reader devices, along with Foxconn International Holdings and Inventec Corp., which are Barnes & Noble's manufacturing partners. Microsoft also filed patent infringement claims against Motorola's use of Android in smartphones. Both Barnes & Noble and Motorola have initiated legal defenses to the claims, but Microsoft's string of Android deals doesn't bode well.

"Microsoft's new patent license deals with Android makers increase the pressure on others to pay, especially Motorola, Barnes&Noble, Foxconn," Müller stated in a July 5 Twitter post.

Barnes & Noble also preemptively sued LSI Corp. in January to prevent that chipmaker from asserting royalty claims on Nook devices, according to a Bloomberg story. The case isn't associated with Android claims. Rather, Barnes & Noble asserts in advance that it isn't violating patents associated with LSI's technology.