Microsoft

Ever wonder what patents Microsoft has been using to sign up Android vendors such as Samsung, HTC, Huawei, Acer, and over 10 others in cross-licensing agreements? Just last week Barnes & Noble asked US regulators to probe Microsoft’s anti-Android strategy, which sees the company collecting millions in profits from royalties paid by just about anyone shipping Android on their devices.

In their initial letter to the Department of Justice, Barnes & Noble claims Microsoft’s patents “cover only arbitrary, outmoded and non-essential design features,” and today we get a look into exactly what they’re talking about thanks to a detailed report from Groklaw of the exhibits attached to B&N’s letter.

Below B&N walks us through some of the patents Microsoft claims the Nook infringes on and also describes their stance for each. These could very well be some of the same patents the company is using to collect royalties from other Android vendors, patents B&N describe as only covering “trivial and non-essential design elements in Android”.

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We got the highlights before but here’s the whole hour long interview.

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Important quotes below:
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According to a report from WSJ, Google is currently in talks with private-equity firms regarding potentially providing assistance in the purchase of Yahoo Inc.

The report mentions the possibility Google is simply trying to bid up the purchase price to make it a less attractive deal for other potential buyers including Microsoft. Yahoo is currently in talks with Microsoft and private equity firm Silver Lake Partners as well as the Canada Pension Plan Investment Board regarding a possible deal. Although, there are reasons Google might find owning a piece of Yahoo’s 700 million plus unique monthly visitors beneficial.

The most obvious is advertising. According to the report, “Google wants to help sell the ad space across Yahoo sites as Yahoo has struggled to get good prices for it”. WSJ mentions the ability to push Google+ on the Yahoo community, but more importantly, a deal would provide Google with access to ads displayed in content from ABC News and other current premium content partners of Yahoo. According to the source, Google is interested in “having deeper business relationships with such publishers”.

Citing a “person familiar with the matter”, WSJ’s sources claim that Google has talked with two undisclosed private-equity firms, and while no deal has been struck, many are already discussing potential antitrust investigations. Forbes just published a story focusing on the antitrust issues of a potential Yahoo purchase, outlining the obvious predicament:

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As you probably know, they Steve Jobs book is now in public hands and there will be lots of coverage.  As is also known, Jobs wasn’t a huge fan of Android and Google in general, though he was known to council CEO Larry PAge and cofounder Sergey Brin on more than one occasion.  Here are some of Jobs’thoughts on building an iTunes client for Android like they did on Windows:

“We thought about whether we should do a music client for Android. We put iTunes on Windows in order to sell more iPods. But I don’t see an advantage of putting our own music app on Android, except to make Android users happy. And I don’t want to make Android users happy.”

He lumps Google in with the Axis of evil:

“IBM was essentially Microsoft at its worst. They were not a force for innovation; they were a force for evil. They were like ATT or Microsoft or Google is.”

And Jobs’ meeting with Eric Schmidt:

“We spent half the time talking about personal matters, then half the time on his perception that Google had stolen Apple’s user interface designs,” recalled Schmidt. When it came to the latter subject, Jobs did most of the talking. Google had ripped him off, he said in colorful language. “We’ve got you red-handed,” he told Schmidt. “I’m not interested in settling. I don’t want your money. If you offer me $5 billion, I won’t want it. I’ve got plenty of money. I want you to stop using our ideas in Android, that’s all I want.” They resolved nothing.

And then there was the thermonuclear War…

“I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong,” Jobs said. “I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.” Jobs used an expletive to describe Android and Google Docs, Google’s Internet-based word processing program.

He did have constructive criticism for Larry Page however:

We talked a lot about focus. And choosing people. How to know who to trust, and how to build a team of lieutenants he can count on. I described the blocking and tackling he would have to do to keep the company from getting flabby or being larded with B players. The main thing I stressed was focus. Figure out what Google wants to be when it grows up. It’s now all over the map. What are the five products you want to focus on? Get rid of the rest, because they’re dragging you down. They’re turning you into Microsoft. They’re causing you to turn out products that are adequate but not great….

I suppose it is better to be hated by Jobs than dismissed (Microsoft).

Image courtesy of The Verge

Following a slew of announcements from Google yesterday culminating with the unveiling of Android 4.0 Ice Cream Sandwich, the accompanying software development kit, Android Beam, the new People app, the panoramic camera feature and the Samsung Galaxy Nexus smartphone (among other things), The Verge has published an exclusive, lengthy interview with Android’s head of user experience Matias Duarte. It’s a highly recommended read with revealing details and interesting insider perspective on Google’s arguably the most propulsive property.

Some of the more noteworthy highlights:

Android Honeycomb, which was Duarte’s first big Google project following his departure from Palm after the company was acquired by HP, was a lot like “emergency landing”, he said.  It’s a platform which has “a flexibility designed into it that you don’t have to worry about when you’re doing a completely integrated device”. And why Google refused to open-source Honeycomb?
“On Honeycomb we cheated, we cut the corner of all that smaller device support”, adding this:

Honeycomb was like: we need to get tablet support out there. We need to build not just the product, but even more than the product, the building blocks so that people stop doing silly things like taking a phone UI and stretching it out to a 10-inch tablet.

People are fed up with “two decades of windows, and cursors, and little folder icons”, he says. The search company actually visited “shadow” users at their homes and workplaces to figure out how they interacted with mobile devices. What they found out was surprising: Android lacked emotional connection with its users who deemed the operating system overly complex. So they set out to build a wonderland of sorts, improving on Android’s typography by creating in-house a clean typeface for Ice Cream Sandwich dubbed Roboto. He then took a jab at Apple, calling the iOS design “juvenile” and likening it to web pages with “cartoony things hanging off a page”.

More tidbits below the fold.

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All major Android backers are now paying royalties to Microsoft for using Android in smartphones, even the likes of Samsung and HTC. Goldman Sachs estimated the Windows maker could rake in a whopping $444 million this year alone from Android patent pacts, easily exceeding Windows Phone licensing revenues. Now that the $199 Kindle Fire tablet has come into full view, the question arises whether Amazon, too, will run to Microsoft’s arms seeking Android patent protection.

The two companies last year had cut a cross-licensing agreement. However, the Seattle Times notes that the 2010 deal covers the existing Kindle e-readers but not Android, which powers the Kindle Fire tablet. TechCrunch’s MG Seigler, who saw early prototypes of the Fire tablet, described  a forked Android version which is at the core of the Kindle Fire experience:

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The Next Web is reporting that the US Government and Google are in talks over a contract that would license Google Apps to the whole US Government staff. The contract totals up-to $50 million dollars. The US Gov is also considering Microsoft’s productivity suite.

Microsoft’s suite could be considered pretty solid, but also pretty bland. Many corporations, and school districts, are currently using Microsoft’s suite. Some would say it’s in a good spot, but when compared to Google it just not up-to par (in my opinion). Many city governments are already using Google Apps.. so let’s call this a fair fight.

The US Government is currently reviewing the terms, and will soon select which company they’d like to side with. At any rate, both companies are probably opening their arms to $50 million, so it’ll be interesting to see how this plays out.

This morning word broke that Microsoft and Samsung entered a cross-licensing agreement that would see Samsung paying royalties on their smartphones and tablets running Android. This prompted the following statement from Google:

“This is the same tactic we’ve seen time and again from Microsoft. Failing to succeed in the smartphone market, they are resorting to legal measures to extort profit from others’ achievements and hinder the pace of innovation. We remain focused on building new technology and supporting Android partners.”

After these claims of extortion, Microsoft’s head of communications Fran Shaw took to Twitter (above), to respond. His second Tweet read, “I would encourage the folks in MV in slowly read graf 5 of our blog on the topic today. Here’s the link again: bit.ly/oZbi3X”

The paragraph he’s referring to is below, which clearly shows Microsoft’s intent to continuing pursuing these types of deals with other Android vendors.

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Microsoft just announced a cross-licensing agreement with Samsung. Akin to their patent deals with other Android backers, this one will have Samsung pay per-device royalties for mobile phones and tablets running Android. Microsoft has in total eight cross-licensing agreements with Android backers Acer, General Dynamics Itronix, Onkyo, Velocity Micro, ViewSonic, Wistron, HTC and Samsung.

Microsoft explained in a blog post that the agreement “gives both companies greater patent coverage relating to each other’s technologies, and opens the door to a deeper partnership in the development of new phones for the Windows Phone platform”.

Did the software maker just say that Samsung will focus more on Windows Phone in the future? Per press release, Microsoft and Samsung “agreed to cooperate in the development and marketing of Windows Phone”. Could be just what Microsoft needs given their struggle to keep Nokia afloat. Patent expert Florian Mueller characterized the announcement on his FOSSPatents blog as “the most important Android-related intellectual property deal in its own right”, adding:

If Samsung truly believed that Google’s acquisition of Motorola Mobility was going to be helpful to the Android ecosystem at large, it would have waited until that deal is closed before concluding the license agreement with Microsoft. But Samsung probably knows it can’t rely on Google. It decided to address Android’s intellectual property issues on its own.

Samsung has circa 28,000 patents in the United States and more than 100,000 patents around the world. Curiously, Microsoft hasn’t targeted Apple’s iOS with its patents so far which leads us to believe that Oracle, Microsoft and Apple may be working together to derail Android or at least make it a pricey proposition for handset makers. Be that as it may, it is going to be interesting seeing how this Microsoft-Samsung patent protection affects the nine Apple vs. Samsung lawsuits in twenty countries around the world…

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As part of the Senate Judiciary hearings today, former former FTC official (and new Google employee) Suzanne Michel, testified under oath today that Google, Microsoft and Yahoo all bid to become the default search engine on iOS’s Mobile Safari Web Browser.  As we know, Google won, and as we can infer, Apple get’s some revenue from Google for making it its default search engine.  As we know from Apple being Apple, the quality of the search results was probably as big a part of the decision as the relatively small bits of revenue.

But as part of the testimony, Michel said briefly (before she was cut off) that 2/3rds of mobile search comes from Apple iOS devices.  That’s pretty interesting considering the share of Android devices in the market.  But not altogether surprising considering the web browser market share which includes those millions and millions of iPads.

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Chrome and Android, the two crucial weapons in Google’s assault on mobile and desktop, are showing no signs of stopping. We already reported today that Android passed iOS globally. When it comes to browsing the web, Google’s Chrome zoomed past the 25 percent mark for the first time this weekend, ConceivablyTech observed. More precisely, Chrome grabbed 25.02 percent share this past Sunday, per StatCounter Global Stats data.

The software has been growing rapidly, registering global market share of 18.29 percent in April, 19.36 percent in May 2011, 20.65 percent in June and 22.14 percent in July. Apple’s Safari grew marginally, adding just 0.02 percentage points to its 5.17 percent share in July. The latest StatCounter data, which may not be representative of the entire market, really spells trouble for Mozilla’s Firefox. Mozilla’s browser used to be the preferred alternative to Microsoft’s market-dominating Internet Explorer not that long time ago. How times change…

Firefox’s share is declining five times faster than Internet Explorer’s, indicating that Chrome is slowly but steadily chipping away at Firefox’s market position, which is now within spitting distance. Firefox scored a 27.49 share for the month of August versus 41.89 percent for Internet Explorer. The fact that only 14.5 percent of web users, or 54 percent of Firefox users, have upgraded to Firefox 6 is another indicative of shifting tides as Google gains significant ground in the web browsing space.

Google also benefits from the silent updating mechanism, a computer process that sits in the background to automatically keep your Chrome installation up to date, without any intervention on your part. Did the latest StatsCounter numbers surprise you? The writing has been on the wall for some time.

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It’s no secret that Microsoft makes more money off Android then their own quickly failing phone business, thanks to licensing agreements with HTC which see a royalty paid to the company for every Android HTC device sold. A new licensing agreement with ViewSonic will see Microsoft again collecting royalties off ViewSonic’s smartphone and tablet devices running Android or Chrome.

Microsoft’s corporate vice president and deputy general counsel of Intellectual Property and Licensing Horacio Gutierrez had the following to say about the agreement:

“We are pleased that ViewSonic is taking advantage of our industrywide licensing program established to help companies address Android’s IP issues,” he continued, “this agreement is an example of how industry leaders can reach commercially reasonable arrangements that address intellectual property.”

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You probably know by now that Google’s move to acquire Motorola Mobility for $12.5 billion was seen as one specifically focused on acquiring their more than 17,000+ patents, many of which are thought to be key in protecting Android from other smartphone makers (Apple and Microsoft) in court. However, according to a report from Bloomberg, only 18 of those patents will be essential in fighting patent-infringement related cases against, namely, Apple.

According to CEO of ICAP Patent Brokerage Dean Becker (“global leader in intellectual property brokerage”) Google only needs a few of the 17000+ patents to protect it’s mobile IPs, he added:

“There are a lot of sweet patents in that portfolio…”- Dean Becker, ICAP Patent Brokerage 

The patents cover a little bit of everything that we’ve come to expect from a smartphone; touch-screen gestures, antenna designs, location-based services, email,etc. Among some of the more notable patents that will certainly provide value when protecting Android include one from 2001 that details disabling a “touch sensitive” display that detects a user’s head in relation to the device to prevent accidental input (sound familiar?), another shows a feature that would allow users to control when their location data is sent over a network via GPS (lack of these types of features were recently the subject of debate at a senate judiciary hearing in May where Apple and Google were questioned on their practices in relation to user location data). Other noteworthy patents include one related to increasing data storage for users and others that detail features we see in most modern smartphones.

Motorola, even before being acquired by Google, was and still is involved in mobile related legal issues. Most recently Apple filed patent-infringement complaints with the ITC in October, and also sued the company in civil court for “a pattern of unfair, deceptive and anticompetitive conduct”. Claims which also mirror those of Microsoft. Motorola seems to be confident in their patents, however, by going after Apple in lawsuits on three separate occasions and filing their own complaint with the ITC.

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In the battle for mobile supremacy, Apple and Google are winning as competitors continue to lose ground, finding it increasingly difficult to compete with the strong iOS and Android ecosystems (can you say ‘duopoly’?), per latest survey from the NPD Group. The results came by tracking U.S. consumers aged 18+ who reported purchasing a mobile phone and exclude corporate purchases. In the June quarter, iOS grabbed 29 percent of the U.S. smartphone share versus Google’s 52 percent share. Both tech behemoths have grown their platform share at the expense of BlackBerry maker Research In Motion.

Cross-posted on 9to5Mac.com

RIM’s been on a serious decline amid poor sales and delays related to their QNX-based superphones. Their BlackBerry OS software share fell to just eleven percent in the U.S. Meanwhile, Hewlett-Packard’s webOS is in a state of limbo as the world’s leading computer maker announced intentions to exit the hardware business. Microsoft’s Windows Phone 7 and Windows Mobile grabbed five percent of the market each.

The emerging prepaid market is the next battelground for iOS and Android. Google, however, has the first mover advantage here…

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It’s no secret patent-related legal disputes have become the subject of most media coverage lately…Whether it’s Apple halting sales of Samsung’s tablets, HTC going after Apple, or Google snatching up Motorola to beef up their patent portfolio, it’s clear the company with the most patents will have an advantage over others in the legal proceedings that we’re bound to continue encountering down the road. This is why we’re intrigued by the graphic above (via GigaOM) from mobile analyst Chetan Sharma charting the number of issued patents (in the US and Europe) between 1993 and 2011.

While these estimates of mobile communications related patents don’t take the quality of patents into account (which is obviously a huge factor in determining their long-term value), you can see from the breakdown below that Nokia and Samsung top the list, with the other expected players including IBM, Microsoft, Sony, Motorola, and Intel following.

Noticeably far down the list is Apple, the one company who seems to have had more success than others fighting patent-related issues recently. Again, these numbers in no way represent the quality of patents and the ability for companies to protect their IPs in the courtroom… which is also a good indication that perhaps we should be looking more closely at the quality of patents rather than the sheer number.

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The smoke has cleared on Google’s $12.5B purchase of Chicago-based Motorola and now that almost everyone has had a chance to speak, I think we’re starting to understand what went down.

Google purchased Motorola (MMI) for $12.5B, a 63% premium over its weekend closing price.  Motorola, however, has around $3B in cash and securities, which makes the real purchase a slightly more reasonable $9.5B for Google.  For instance, if Google wanted to slice and dice Motorola, they’d take the cash and patents and sell off the cable box and device divisions for a couple billion dollars each and come away with about what they would have paid for Nortel – and get double to triple the patents. On sheer numbers of patents alone, it seems like a good buy. Obviously some patents are worth more than others.

If the deal doesn’t go through, Google owes Motorola $2.5B for the trouble, so Google is dead serious about this play.

But back to what Motorola does: They have IP, they make smartphones, they make tablets and they make cable top boxes.  It seems like almost too good a setup for Andy Rubin’s Android to just want to sell off piecemeal.

But did Google want to pick up a hardware company?  I reported earlier this year that the Android Hardware division that Andy Rubin had started up with former Danger Co-founders had intentions to build physical devices, not just Operating Systems.

That scale is what attracted and the former Danger founders to get the band back together, with their goal being to build the hardware and features they want to see show up in new Android devices. It’s not enough for Google to just provide Android software to carrier — now they hope to influence what handset makers build, too.

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If you haven’t heard by now, Google has shocked many this week with their acquisition of Motorola Mobility for $12.5 billion, which still may have to pass regulatory review for GOOG to avoid an unusually high $2.5b reverse termination fee. However, while there might be a few hoping the deal falls through, Microsoft is taking this time to convince smartphone makers the Windows Phone platform is the only “truly open mobile ecosystem”.

President of Windows Phone division, Andy Lees, provided the following statement (via WinSuperSite) following the Google/Motorola acquisition announcement:

“Investing in a broad and truly open mobile ecosystem is important for the industry and consumers alike, and Windows Phone is now the only platform that does so with equal opportunity for all partners..”

This comes after Microsoft announced a deal with Nokia in February that would see Windows Phone 7 become Nokia’s primary OS for smartphones (a deal that appears to give Nokia an unfair advantage over other partners). As a result, Nokia will be working closely with Microsoft and integrating a ton of their own content into the OS including their content and application store, and the Nokia Maps app. The handsets will also receive the Xbox Live, Zune music store, and Bing search treatment from Microsoft.

While the deal isn’t exclusive (allowing Microsoft to partner with other manufacturers and Nokia to make devices powered by another OS), it certainly gives the two companies an unfair advantage over other OEMs considering the Windows Phone platform… and seems to contradict Lees’ statement of the OS being an “equal opportunity for all partners”. Google’s acquisition of Motorola may have a bigger impact down the line depending on their plans for the company… but for the time being the Google/Motorola partnership doesn’t provide any less incentive for new Android partners than the Microsoft/Nokia deal does for potential Windows Phone manufacturers.

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GigaOm is reporting that many companies were in the race to buy Motorola Mobility, including Microsoft. GigaOm contributes this as one of the reasons why Google made the purchase for such a high price, so other manufacturers couldn’t hurt their ecosystem even further with IP lawsuits.

The reason Motorola didn’t go with Microsoft was due to the fact Microsoft only wanted the company for its patents, rather than running a hardware business.

Talks between Google and Motorola began five weeks ago, reports GigaOm. Their sources say CEO Larry Page and Motorola CEO Sanjay Jha were talking directly and only a few other executives were brought in. Also, Android co-founder Andy Rubin wasn’t bought into the talks until recently. The deal Google has struck gives the company 17,000 current patents and 7,500 patent applications.

Newsweek Technology Editor Dan Lyons makes some great points this morning regarding Google acquiring Motorola Mobility for $12.5 billion. First he talks about TechCrunch MG Siegler’s remarks that Google made themselves “look like huge asses in retrospect”. Lyons pretty much says Siegler’s opinions were just foolish. Lyons also makes an interesting point that Google most likely didn’t actually want the Nortel patents, they were just driving up the price for Apple and Microsoft with their PI (3.14 billion) bid.

And today it all makes sense. Google just sandbagged its rivals. The whole thing was a rope-a-dope maneuver. Google never cared about the Nortel patents. It just wanted to drive up the price so that AppleSoft (those happy new bedmates) would overpay. Today, with the Motorola deal, Google picks up nearly three times as many patents as AppleSoft got from Novell and Nortel. More important, Google just raised the stakes in a huge way for anyone who wants to stay in the smartphone market.

In the end of things, Google is earning 3 times the patents than they would have in the Nortel deal, but for three times the price. One last word from Lyons:

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Update: As expected, outspoken Microsoft Corporate Vice President Frank X. Shaw has responded to Drummond’s response from earlier today. There isn’t much to learn here, but Shaw’s tweets pretty much speak for themselves and Microsoft’s stance on the issue. We’re bound to hear more from Google execs on the issue, stay tuned for the latest. Shaw’s tweets after the break, if you’re interested.

Google Senior Vice President and Chief Legal Officer David Drummond has taken to the official Google blog once again to respond to Microsoft’s Brad Smith’s claims Google backed out of the opportunity to jointly bid for Novell patents.

Drummond writes:

“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”

Drummond points out the U.S. Department of Justice has now intervened, forcing Apple and Microsoft to provide an open-source license in order to “protect competition and innovation in the open source software community.”

Its clear Google doesn’t want to pay for patents that aren’t going to help them defend Android from competitors in the future. A joint bid would have essentially forced them to do so, which is the reason they claim “competitors are waging a patent war on Android”.

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With Google execs stepping out of character to share their frustrations with Microsoft and Apple “banding” together to acquire patents, it seems at least a few execs in Redmond are determined to set the record straight, and for good reason given the fact the company is slated to earn more off Android than their own Windows Phones, according to analyst Horace Dediu.

In response to the open letter from Google’s Vice President and Chief Legal Officer David Drummond accusing Microsoft and Apple of “banding” together to acquire mobile device related patents, Microsoft’ general counsel Brad Smith posted the following via his Twitter account this morning:

“Google says we bought Novell patents to keep them from Google. Really? We asked them to bid jointly with us. They said no.”

Microsoft surely doesn’t want to tarnish their relationship with Google, with Android-based HTC phones bringing in three times as much profit in the second quarter in comparison to their own Windows Phone devices. It makes you wonder why Microsoft is spending billions developing and bringing Windows Phone handsets to market when Android devices are clearly their bread and butter in the mobile space.

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