B&N Sought DoJ Inquiry Over Microsoft Patents

Meshach writes "There's an interesting story at the WSJ about how Barnes & Noble lobbied the Justice Department to open a new antitrust probe against Microsoft regarding their abuse of the patent system. B&N saw Microsoft filing a slew of frivolous patents in order to stop the development of handheld devices, potentially affecting their Nook reader. The article mentions how Microsoft has a similar racket going with various Android device manufacturers, but B&N does not have the cash reserves to support similar licensing, and is fighting back." Reader qantr points out related news: Chinese telecoms firm Huawei has confirmed that Microsoft is demanding royalty payments over products running Android.

Comments

Time to buy a Nook

[ozmanjusri]

Microsoft are nothing but vile patent trolls, screwing everybody, including their customers.

Support B&N with your wallets. Most of all, don't buy Microsoft products.

Re:Time to buy a Nook

[Bert64]

For MS it's not about making money from Android, thats a side benefit... Their actual goal is to drive up the cost of Android and to dissuade companies from using it at all. Their end game is to get users locked into their platform instead.

Re:Time to buy a Nook

[md65536]

I seem to recall something about how Microsoft is making more money from Android devices than they are from their own mobile hand-held devices.

I'm making more money selling lemonade on the street than ms is making from their phones. But then, I've sold a few glasses of lemonade.

Re:Time to buy a Nook

[peppepz]

Abusing a ridiculous patent about "long file names" to extort money from people who are using that technique only to provide interoperability with their monopolist OS looks much like patent trolling to me - the difference is that they do have a product, which the market rejected, implementing that feature, unlike typical patent trolls. But the intentions and the result are the same.

Google, for example, are playing in the same game and by the same rules: they buy patents and pay licenses, but I haven't seen them using their patent portfolio for offensive purposes yet.

Re:Time to buy a Nook

[TubeSteak]

Don't hate the player, hate the game.

In this game, we allow the players to design the rules.
It's pretty much a recipe for disaster.

Geeks don't have $$

[Compaqt]

So the next best thing we can hope for is that the interests of various corporations align with the general geek consensus for an open Internet and the right to develop software:

For an open Internet: Google
For the right to copy (not infringing copies): the Consumer Electronics Association.
Against patents: B&N, Google/Motorola, various Linux foundations.

Re:Geeks don't have $$

[dimeglio]

I believe Canada, UK and Europe don't recognize software patents. Does this mean some software will not be legal in the US?

From Wikipedia:
United Kingdom patent law is interpreted to have the same effect as the European Patent Convention such that "programs for computers" are excluded from patentability to the extent that a patent application relates to a computer program "as such". Current case law in the UK states that an (alleged) invention will only be actually regarded as an invention if it provides a contribution that is not excluded and which is also technical. A computer program implementing a business process is therefore not an invention, but a computer program implementing an industrial process may well be.

From another source:
In June 1993, the Canadian Patent Office replaced its August 1, 1978 guidelines and published them for the "information and guidance" of practitioners. They were:
    "1. Computer programs per se are not patentable.
        2. Processes which are unapplied mathematical calculations, even if expressed in words rather than in mathematical symbols, are not patentable.
        3. A process and/or computer program which merely produces information for mental interpretation by a human being is not patentable, nor does the process or program confer novelty upon the apparatus which uses it.
        4. Claims drawn up in terms of means plus function which merely produces intellectual data are not patentable.
        5. New and useful processes incorporating a programmed computer, are directed to patentable subject matter if the computer related matter has been integrated with another practical system that falls within an area which is traditionally patentable.
        6. The presence of a programmed general purpose computer or a program for such computer does not lend patentability to, nor subtract patentability from, an apparatus or process."

I'm Glad

[sunr2007]

that B &N is showing MS that they have balls which other big companies like Samsung , HTC din't. It doesnt matter whether B & N succeed or not atleast they have shown the intent to fight Troll called MS. This could be the next David Vs Goliath fight.

Re:I'm Glad

[Xest]

The problem for companies like Samsung and HTC is that because they are American companies they suffer greatly in US courts as frankly American courts are extremely biased towards American companies, presumably stemming from it's national disease of over the top patriotism and general high levels of xenophobia. That's not to say this is always the case, but if you're a foreign company going up against a US firm in US courts, then the odds are stacked far more greatly against you than say a foreign company fighting a native firm in Canadian, or European courts which is again not to say it doesn't happen there too - just not so frequently.

It's no coincidence really that the firms that have folded against Microsoft are the foreign ones, and the ones fighting it are the American ones - Google, Motorola, B&N. If you want a slice of America's consumer pie, you have to accept that you'll play second place to American companies.

Other industries have been used to this for decades- you only have to ask companies like Airbus and BP about that, or any of the companies that led to complaints against the US via the WTO which have resulted in rulings against the US but which the US has chosen to completely ignore be it lumber from Canada or cotton from Brazil, but with the patent war hotting up it's becoming a painful reality for the mobile industry now too.

Bloomberg version of this . . .

[PolygamousRanchKid]

See my submission for Bloomberg's non-paywall version: http://slashdot.org/submission/1842986/barnes-noble-urges-us-to-probe-microsoft-o

Trolls

[Anonymous Coward]

What they're doing is avoiding a lawsuit against Google, and instead going after licensees of Android. If they went after Google, Google would fight it and thus reveal the origin of the inventions they are claiming.

They come to some arrangement, which looks like it's really a fake agreement (e.g. you pay us $45 million, and we pay you $45 million back in marketing and discounts - which is what the Samsung deal is rumoured to be). They they present the payment to them as a license fee for Android to create a false cost associated with Android.

All done under NDA so the details of the fraud are not revealed and investors are kept in the dark.

Re:Trolls

[Locutus]

if you read up on the B&N complaints about Microsoft it was indeed about how they insisted and even tried various tricks to get B&N to sign an NDA or act as if they were still under one. The B&N lawyers kept saying we don't need any NDA to read public patents so just give a list.

What you stated sounds just like the Microsoft I've known for 20+ years and would not surprise me.

Too bad so many think Microsoft is doing this to make money from the licensing.

LoB

From another article

[flimflammer]

A trial on Microsoft’s patent claims against Barnes & Noble is scheduled for February in Washington.

Source: http://www.bloomberg.com/news/2011-11-08/barnes-noble-urges-u-s-regulators-to-probe-microsoft-on-mobile-patents.html

At least we'll finally see what patents Microsoft has been using to strong arm manufacturers of Android based phones into patent licensing. The must-sign-a-nda-or-we-wont-tell-what-you're-infringing-on tactic they've been using on everyone feels really underhanded to me, and I'm no Microsoft hater.

I figure there actually has to be something substantial in those patents to merit virtually all the big names in Android phones agreeing to license them at the amount MIcrosoft has been asking.

Re:From another article

[Locutus]

Did you know they both sell products which run Microsoft Windows? Do you think they might talk about how those licensing fees would go up sharply if they were not to play this Android game. Seeing how they _require_ an NDA before even telling the vendors what patents are being infringed, these kinds of contracts only get exposed in court documents or leaked.

So that is just a couple of ways Microsoft strong arms companies the size of Samsung or General Dynamics. And don't forget, Microsoft strong armed Intel into shutting down a software division they were running which did Java and multimedia software. It's pretty well known by the older geeks how Microsoft got its market and has kept its market and it was not because they competed on product quality. IMO

LoB

Re:From another article

[Xest]

"I figure there actually has to be something substantial in those patents to merit virtually all the big names in Android phones agreeing to license them at the amount MIcrosoft has been asking."

Agreed, IMO the issue at hand isn't whether Microsoft has valid patents, I think it very likely does else firms would be less likely to sign agreements with it, I think the issue is that Microsoft is abusing NDAs and so forth to prevent anyone telling the world what the patents are so that they can re-write software to not infringe on Microsoft's payments.

Effectively Microsoft is doing it's best to encourage continued infringement so that people have to license. IMO that should be grounds to lose rights to a patent - you should either be open about infringement and give people the opportunity to avoid it or license it, or lose the right to the patent altogether, not trap people into infringing and then force them to pay up. That really is protection racket type tactics.

Re:Let's see how schizophrenic the government is

[MrHanky]

Depends. Microsoft is a convicted monopolist, and if the patents in this case are needed to stay interoperable with the Windows environment, and the fees demanded border to extortion (i.e. the product is no longer competitive with Microsoft's product), then I suspect the DOJ might find that interesting.

The problem is...

[WindBourne]

the android companies that have caved into MS and paid them. Hopefully B&N and Google/Motorola will win out over MS, while those companies that signed with MS will be forced to continue paying.

The REAL issue here is

[andydread]

Microsoft is taking ownership of other people's code through the abuse of software-patents. This is scary. The notion that you cannot sit down in front of your computer and write successful code without Microsoft attacking you with a team of lawyers using dubious and obvious software-patents is scary. All you code are belong to Microsoft. They didn't write it but the own it anyway. This egregious behavior is something that Microsoft actually promised in their Halloween document. This is not just against Android. Its campaign to sink open source particularly Linux in the marketplace. By making it an expnesive hassle to deploy Linux vendors will just use windows instead. Its not noble. Its sleazy. MIcrosoft's Steve Balmer has been treating to use sleazy tactics and they are doing it now.

Here is how it works :
Microsoft Approaches open source company
Microsoft: My what a nice open source company you have here
Microsoft: You know this is a dangerous neighborhood you need some protection.
Business Owner: Protection? From who?
Microsoft: Well...From us really.
Microsoft: Oh and sign this NDA you cannot talk about this to anyone. Got it?

Its egregious sleazy software-patent extortion tactics.

The real question is how does the greater open source community stop them. So far only Shuttleworth has pledged to fight them in court if they come knocking on Ubuntu's doorstep

If you think this is about Android then you are sadly mistaken. This is about LInux and open source victims include:- TomTom, Buffalo, IO-DATA, Kyocera MIta etc. None of those produce Android products. They are now beating drums that Open Office and Libre Office violates their patents. Look for them to start suing anyone that distributes Open Office or Libre Office in a successful product.

This is their strategy against open source in general If you write open source software that competes with Micorosoft expect them to make it very expensive for you in the marketplace if your product becomes successful.

Re:One need only look at the patents

[andydread]

Microsoft is using gangster extortion tactics.

In Barnes & Noble's own words to the court:-
At the meeting, Microsoft alleged that the Nook infringed six patents purportedly owned by Microsoft. Microsoft had prepared claim charts purportedly detailing the alleged infringement but insisted that it would only share the detailed claim charts if Barnes & Noble agreed to sign a non-disclosure agreement (“NDA”) that would cover the claim charts as well as all other aspects of the parties’ discussions. Noting that the patents were public and that the infringement allegations pertained to Barnes & Noble’s public product, Barnes & Noble refused to sign an NDA.

Insisting that an NDA was necessary, Microsoft discussed the alleged infringement on a high level basis only. Microsoft nevertheless maintained that it possessed patents sufficient to dominate and entirely preclude the use of the Android Operating System by the Nook. Microsoft demanded an exorbitant royalty (on a per device basis) for a license to its patent portfolio for the Nook device and at the end of the meeting Microsoft stated that it would demand an even higher per device royalty for any device that acted “more like a computer” as opposed to an eReader.

After sending the proposed license agreement, Microsoft confirmed the shockingly high licensing fees Microsoft was demanding, reiterating its exorbitant per device royalty for Nook, and for the first time demanding a royalty for Nook Color which was more than double the per device royalty Microsoft was demanding for Nook. On information and belief, the license fees demanded by Microsoft are higher than what Microsoft charges for a license to its entire operating system designed for mobile devices, Windows Phone 7

So Microsoft is not trying to license their trivial, dubious software-patents under Fair Reasonable and NON Discriminatory terms. They are trying to drive up the cost of open source beyond what it would cost to purchase windows from them. They are sleazy slimy bullies. Will no longer use or recommend their products to ANYONE.

Re:Lack of Cash

[alexhs]

Microsoft finally agreed to talk to them about the patents without an NDA, B&N's lawyers looked at them and explained to Microsoft they don't cover their devices, as the patents covered features the devices didn't have.
Microsoft came back and explained those were just a few of the patents they had, that they could go back and find patents B&N did infringe on if they didn't sign a license agreement.

Yes, same tactics as IBM used in the 80's :

My own introduction to the realities of the patent system came in the 1980s, when my client, Sun Microsystems--then a small company--was accused by IBM of patent infringement. Threatening a massive lawsuit, IBM demanded a meeting to present its claims. Fourteen IBM lawyers and their assistants, all clad in the requisite dark blue suits, crowded into the largest conference room Sun had.

The chief blue suit orchestrated the presentation of the seven patents IBM claimed were infringed [...]

After IBM's presentation, our turn came. As the Big Blue crew looked on (without a flicker of emotion), my colleagues--all of whom had both engineering and law degrees--took to the whiteboard with markers, methodically illustrating, dissecting, and demolishing IBM's claims. [...] Confidently, we proclaimed our conclusion: Only one of the seven IBM patents would be deemed valid by a court, and no rational court would find that Sun's technology infringed even that one.

An awkward silence ensued. The blue suits did not even confer among themselves. They just sat there, stonelike. Finally, the chief suit responded. "OK," he said, "maybe you don't infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?"

After a modest bit of negotiation, Sun cut IBM a check, and the blue suits went to the next company on their hit list.

In corporate America, this type of shakedown is repeated weekly. The patent as stimulant to invention has long since given way to the patent as blunt instrument for establishing an innovation stranglehold. [...]

Re:One need only look at the patents

[Raenex]

Both parties interested in talking want the NDA.

If you feel you're being shaken down for money, signing an NDA doesn't benefit you. Would you sign an NDA with an extortionist?