Microsoft Receives Royalties On Over Half Of Android Sales

[Sabre]

Hot Hardware

Microsoft's general counsel and deputy general counsel (Brad Smith and Horacio Gutierrez) have co-written a new blog entry detailing Microsoft's latest licensing achievement. Yesterday's broad cross-licensing agreement with Compal Electronics means that Microsoft has now negotiated licensing terms with the ODMs (original Device Manufacturers) that build over half the Android devices on the market.

The team writes: "Amidst continuing clamor about uncertainty and litigation relating to smartphone patents, we're putting in place a series of agreements that are reasonable and fair to both sides. Our agreements ensure respect and reasonable compensation for Microsoft's inventions and patent portfolio. Equally important, they enable licensees to make use of our patented innovations on a long-term and stable basis."

At present, Microsoft has agreements in place with 55 percent of ODMs and 53 percent of US handset manufacturers. Of the latter group, Samsung and HTC have 23 percent and 29 percent of the market. The pair claim: "For those who continue to protest that the smartphone patent thicket is too difficult to navigate, it's past time to wake up. As Microsoft has entered new markets from the enterprise to the Xbox, we’ve put together comprehensive licensing programs that address not only our own needs but the needs of our customers and partners as well. As our recent agreements clearly show, Android handset manufacturers are now doing the same thing. Ultimately, that's a good path for everyone." (emphasis added).

The unnamed target of the blog post is, of course, Google. In early August, David Drummond, Google's Chief Legal Officer, struck out at Apple, Microsoft, and Oracle, claiming that the three were waging a "hostile, organized campaign against Android." The three companies, according to Drummond, are "attempting to make it more expensive for phone manufacturers to license Android (which we provide free of charge) than Windows Phone 7." Drummond further claims that "our competitors want to impose a “tax” for these dubious patents that makes Android devices more expensive for consumers."

Certainly it's true that Steve Jobs wanted to bury Android for personal reasons—but Drummond's attempt to paint Google as the poor victim of bullies needs a reality check. All of the company's claims about providing Android "for free" hide a nasty flip side: Google provides no indemnification for Android patent infringements.Indemnification is a legal guarantee of protection. In this context, it guarantees that if a licensed product is found to violate the patents of another company, the company providing the license will cover the infringement costs. Apple, for example, indemnifies app developers who build software for the iPhone. Patent trolls sometimes sue small developers anyway, hoping that they'll choose to settle rather than bear the cost of fighting the litigation, but indemnification allows small companies/developers to risk supporting a product, knowing that they've got tag-team protection in the event that someone comes banging on the door.

Google is making a habit out of not supporting the legal side of their projects which they give to the public.... and I REALLY hate to say that (If anyone has followed Complacent and I's discussions on H.264 and WebM)

[complacent]

bingo. if they want to compete long-term, the big "G" is going to have to lawyer up and get their hands dirty and get serious about patents. companies aren't going to be as thrilled about using "free" android if the regulatory and legal costs are equal to or greater than licensing windows phone.

it may be a broken system, but it is the system in use right now. i know that's an even more depressing statement, but sometimes you've got to let common sense prevail and protect your partners. it's just good business sense.

[PGT]

Google just bought a ton of IP in an effort to bolster it's (non-existent) portfolio

[complacent]

Google just bought a ton of IP in an effort to bolster it's (non-existent) portfolio

yep, they sure did. but not until after their two biggest hardware oems inked deals with microsoft... not sure how to feel about that.