LG To Pay Licensing Fees To Microsoft For Using Android

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LG To Pay Licensing Fees To Microsoft For Using Android

Posted by Soulskill on Thursday January 12, 2012 @04:38AM from the those-who-can't-do-sue dept.

PerlJedi writes "InformationWeek reports that LG is the latest in a string of companies who have been bullied into paying 'license fees' to Microsoft for the use of Android on their products. 'Microsoft said the deal with LG means that 70% of Android-based smartphones sold in the U.S. are now covered by its licensing program. ... Microsoft does not disclose how much revenue it's obtaining from Android, Chrome, and Linux licenses, but some analysts believe it may be substantial, to the point where the company is making significant profits from the mobile revolution even though its own offering, Windows Phone, commands a market share of less than 2%, according to Gartner.'"

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I'm honestly confused... by iapetus · 2012-01-12 04:40 · Score: 5, Insightful

In what way is this different to any other form of extorting money with menaces?
"Nice mobile phone business you've got here. Would be a shame if anything were to... happen to it."

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1. Re:I'm honestly confused... by zero.kalvin · 2012-01-12 04:43 · Score: 5, Insightful
  
  Is it me or Microsoft is behaving like some sort of a successful patent troll ?
2. Re:I'm honestly confused... by Anonymous Coward · 2012-01-12 04:48 · Score: 4, Insightful
  
  It's extortion because if you asked them exactly what Patents you are licensing they will refuse to tell you, unless you pay first, and sign an NDA.
  So it's basically,
  "Buy this box"
  "Can I see what's in the box?"
  "No"
  "How about pick it up and shake it a bit?"
  "No"
  "Well, I don't want to buy it then"
  "Ok, see you in court"
  "Hang on a minute, maybe I will buy it then"
  "OK, but before you do, please sign this NDA, we don't want you telling any other mug, sorry future customers, what's in the box"
  "That doesn't sound very fair"
  "Ok, see you in court then"
3. Re:I'm honestly confused... by paiute · 2012-01-12 04:52 · Score: 5, Insightful
  
  Microsoft isn't patent troll. They do actual research and spend billions a year on Microsoft Research. No one else in the industry has such an good R&D department. Patent trolls don't do research, they just bully companies. Microsoft is within all their rights to ask for payments on their patents, because they actually do lots of research.
  Microsoft must have the most inefficient R&D process in history if they are such a good department doing such a lot of work yet none of it seems to make much of a difference in the end products.
  
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4. Re:I'm honestly confused... by RightSaidFred99 · 2012-01-12 04:53 · Score: 5, Insightful
  
  Yeah, I'm sure Microsoft totally bribed the patent office because it's not like the patent office will just rubber stamp _anything_ anyway.
  Your dweeby neckbeard fantasies are amusing to me.
5. Re:I'm honestly confused... by jdgeorge · 2012-01-12 04:54 · Score: 5, Insightful
  
  I imagine there are several possiblities including the following:
  1. Microsoft really has some defensible patents that are essential for these device manufacturers. Could be hardware-related or software-related. It's hard to tell, but so far the agreements have all been with hardware companies, haven't they?
  2. Microsoft is offering reasonable licensing terms to the device makers, so the licensing agreement costs significantly less than the cost of litigating.
  3. Microsoft may be using these negotiations to advance their Windows Phone OS goals, along with #2.
  4. The manufacturers entering these agreements don't already have agreements with Microsoft, but actually want to do business with Microsoft in the mobile device or other areas (personal computers, TVs, etc.)
  5. These manufacturers don't have the patent resources to play hardball.
  6. Some combination of the above.
6. Re:I'm honestly confused... by laurelraven · 2012-01-12 04:58 · Score: 5, Insightful
  
  Microsoft has a huge R&D division, larger than any other company in the industry has. Their patents are invalid, they're good patents given after lots of research. Microsoft spends billions a year to do it, so it's only fair that other companies pay up if they want to profit from the results of Microsoft's R&D.
  The real question here is, how is Android profiting from Microsoft's R&D? Maybe it would help if Microsoft ever actually said which patents were being violated, and how. Have they?
  
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7. Re:I'm honestly confused... by zero.kalvin · 2012-01-12 04:59 · Score: 4, Insightful
  
  Because ( and I could be mistaken) Microsoft haven't approached Google with this, so there is no legal standing for Google to go after MS. So as long as MS is approaching the phone sellers, Google has it hands tied. ps, I am not a lawyer but this is my understanding of the situation.
8. Re:I'm honestly confused... by zero.kalvin · 2012-01-12 05:01 · Score: 5, Insightful
  
  I would agree with you if we knew what those patents are. But it seem to me with the whole NDA thing these patents are probably worthless.
9. Re:I'm honestly confused... by PCM2 · 2012-01-12 05:05 · Score: 4, Insightful
  
  2. Microsoft is offering reasonable licensing terms to the device makers, so the licensing agreement costs significantly less than the cost of litigating.
  I think it's pretty clearly this. That is, licensing Microsoft's patents is not cheaper than how the handset manufacturers were doing business before, but now that the legal challenge is on the table, they've run the numbers and it will be cheaper to license the patents.
  But I do think Microsoft is taking advantage of the current mobile market, in which all of the various Android handset makers are in close competition with one another. HTC, Samsung, Motorola, etc., all need to invest their full attention and resources on the competition at hand, not open a second front in the courts (where they only stand to save money, not earn profit). If any one of those vendors were to invest significant time and funds on a protracted legal battle against Microsoft, it stands to lose its position in the market versus its competitors, who would then eat its lunch. That's what's really making it cheaper to license the patents -- avoiding a lawsuit is always going to be cheaper than risking your entire business.
  
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10. Re:I'm honestly confused... by tonywong · 2012-01-12 05:13 · Score: 4, Insightful
  
  These are agreements between multi-billion dollar corporations. I don't understand why individuals should care how the specifics of licensing deals should be exposed between companies like Microsoft, LG, or Google. Each of them have their own lawyers, engineers and negotiators to look out for their own interests, if you haven't noticed.
  
  If you don't like the patent system, reform it by lobbying your government. The megacorporations are just playing by those rules and really don't give a hoot about what the average consumer thinks.
11. Re:I'm honestly confused... by elashish14 · 2012-01-12 05:27 · Score: 5, Insightful
  
  It's ridiculous - there's far too much potential for abuse and is an obvious case of racketeering seeing as we already know that the patents are bogus. While it should be illegal for any patent licensing agreement to be covered by a NDA, I guess you couldn't expect such sensibility from any country that would allow software patents in the first place though.
  Another victory for bribing politicians! And another step by America towards becoming an irrelevant country with an artificial, inflated Imaginary Property Economy.
  
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12. Re:I'm honestly confused... by miltonw · 2012-01-12 05:28 · Score: 4, Insightful
  
  Microsoft owns the patents based on years of R&D and they legally ask for companies to pay to use their patented technology.
  Well, therein lies the problem. It isn't proven that Android actually uses their patented technology - Microsoft won't even disclose which patents they claim are being infringed. Without that proof, what Microsoft is actually demanding is money for nothing. And that is "legal" how? It's extortion, plain and simple.
  
  Without Microsoft disclosing which patents, proving that those patents are valid AND those patents are being used by Android, the whole thing is simply a con. "It's cheaper for you to just give us money than for you to go to court and force us to prove anything."
  
  If Microsoft were legal and honest, they would disclose the patents. They refuse. That says it all.
13. Re:I'm honestly confused... by silverglade00 · 2012-01-12 05:45 · Score: 4, Insightful
  
  After Bell Labs, MIT, the US Navy, CERN, Stanford University, and Xerox PARC did all the hard work,
  Sounds like tax dollars paid for most of that, so we should get most of it for free.
14. Re:I'm honestly confused... by Penguinisto · 2012-01-12 05:45 · Score: 5, Insightful
  
  Agreeing to a licensing fee doesn't mean that that patents are necessarily valid. It could equally mean that the victim company's risk analysts said that the cost of "licensing" was less than the cost of fighting it in court.
  It isn't a question of satisfying "some forum trolls", but rather a public demand to know what these patents are, so that folks like, say, Google, can engineer ways to stop "violating" these "patents".
  That Microsoft wants to keep it a big secret says that they are more interested in making money (and spreading FUD) than in not seeing their alleged intellectual property violated. IMO, it is a gross perversion of the system.
  
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15. Re:I'm honestly confused... by s73v3r · 2012-01-12 05:54 · Score: 5, Insightful
  
  No, that is completely unacceptable. There should be NO NDA whatsoever needed to see these patents. For one, patents are supposed to be publicized. If I knew what patents Microsoft was talking about, I could go look them up in the patent database and get the specifics myself.
  The idea that you should have to sign an NDA so you can't tell others what patents were involved is absolutely disgusting, and is only appealing to Microsoft, and their fanboys that would excuse their every action.
16. Re:I'm honestly confused... by hedwards · 2012-01-12 06:11 · Score: 5, Insightful
  
  Yes, it happens more frequently than you would think. MS is no longer under DoJ supervision and in many of those cases the companies are getting their royalty money back from MS. MS also has the ability to turn the screws on the Windows licenses that those companies have.
  B&N is in the unusual position of not having or needing a license for Windows and wouldn't be getting any kickbacks for paying the extortion money.
  As for flimsy patents, the courts are completely unpredictable, Blizzard was able to convince a court that Glider infringed upon its WoW copyright by making an in memory copy of the game even though that's expressly not infringement under the law.
  Copyrights are even worse as evidenced by Apple's ridiculous rounded rectangle patent trolling. And don't forget about the TX court of no turn downs where anybody can get money for somebody elses fictitious patent infringement.
17. Re:I'm honestly confused... by penix1 · 2012-01-12 06:36 · Score: 4, Insightful
  
  While it should be illegal for any patent licensing agreement to be covered by a NDA
  Why do patent licence deals have to be public knowledge? I might not want my competitors to know what technology I'm using in my product.
  WTF?!?!? Your "competitors" already know your technology BECAUSE you filed for the patent. That is the whole point of patents. You tell everyone what your invention is and everyone agrees that you get exclusive rights to it for a limited time.
  
  seeing as we already know that the patents are bogus
  No you don't. All you know know is what are in the B&N case. They may not be all patents. But in the end even those are in fact patents legally granted to MS, and no matter how "bogus" you consider them you can't just violate them outright and not expect to be sued.
  I see a better way around it. Do what Red Hat was trying to do in Delaware with SCO and have Google take the Android code base to a judge and have it declared "non-infringing". That ought to wake Microsoft up.
  
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18. Re:I'm honestly confused... by Luckyo · 2012-01-12 09:57 · Score: 4, Insightful
  
  The basis behind original idea of patenting requires openness about what is actually patented, so that other inventors can either plan to incorporate your inventions into theirs (and pay you for it) or plan their inventions not to infringe on your patents.
  By obfuscating which patents are being infringed on, microsoft's behavior becomes unethical, as they are going against the aforementioned purpose of patents, making it harder for companies not directly involved to plan their current and future inventions.
  Unfortunately this "patent obfuscation" combined with "mass patenting of everything even remotely patentable", while unethical, has become modus operandi. Inventors not only cannot easily check which patents they may be infringing upon, they can't even ask a company with patents if they are infringing and if they are, what exactly they're infringing upon (so they could plan on either incorporating or going around the said patents)!
That's messed up ... by gstoddart · 2012-01-12 04:46 · Score: 4, Insightful

So, Microsoft is getting paid for every Android device sold in the US ...
And people think the patent system isn't broken.
I wish we had a clear list of the patents Microsoft is asserting are being infringed, because from TFA:

Microsoft has also sought licensing deals from vendors whose products run Linux, which the software maker also claims violates its patents.
That's just sad, really ... you can't build anything without paying Microsoft for the privilege of not getting sued. I'm betting a good deal of those patents are likely stupid things that had been in other operating systems before MS copied and patented them.

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1. Re:That's messed up ... by gstoddart · 2012-01-12 05:07 · Score: 5, Insightful
  
  How does that mean the patent system is broken? Microsoft is just collecting royalties on technology they invented and developed.
  That's one theory ... but since Microsoft has never publicly identified all of the patents, just how many of them would be valid, and how many of them would be technology which had been invented by someone else?
  You have to figure, pretty much anything which had been in Berkely UNIX shouldn't be patentable because we all know about it ... anything which was widely taught in schools and in text books shouldn't be patentable because it was common knowledge and available to any "skilled practitioner" ... anything which had been implemented in another OS before MS had it shouldn't be patentable because of prior art.
  If this is truly technology that Microsoft solely created from scratch, then maybe ... but if they copied something else that had been done before (which, isn't exactly unprecedented) then all they've done is co-opt someone else's invention by patenting it first.
  
  so that other companies can use technology invented by other companies who would otherwise keep the details secret.
  My problem is that MS wants to have their cake and eat it too ... they regularly insinuate that Linux violates its patents, but they won't say which ones are being violated. So, they are keeping it secret and then suing over it.
  So, Microsoft patents stuff that might make many of us want to march on the Patent Office with torches and pitchforks because we learned it in first year CS class.
  I'm sorry, but the USPTO is staffed with morons who are pushing through patents and collecting fees for it, Microsoft hasn't offered up full public disclosure to which patents are being infringed, and, let's face it, just because Microsoft has more lawyers doesn't mean they're playing within the rules of the game.
  So, on face value ... I don't have enough information to know what they claim is being violated, and I don't have enough trust in any large corporation to take them at their word.
  But we all know that absolutely stupid things get granted patents, and those often cover things that have been around for a long time and had already been done by someone else.
  So, unless you have any actual information to suggest all of these patents are 100% MS invented, and wouldn't be invalidated by a court challenge ... you're just assuming they're all good. For those of us who remember the MS of the 80's ... well, I'm not willing to extend them the benefit of the doubt on this.
  
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If they disclose it would be easier to cope with by G3ckoG33k · 2012-01-12 05:05 · Score: 5, Insightful

" Microsoft owns the patents based on years of R&D (Microsoft Research is the largest R&D center on the industry) and they legally ask for companies to pay to use their patented technology."
How do you know they own the patent? Because LG paid? That is not an argument.
"Microsoft owns the patents based on years of R&D (Microsoft Research is the largest R&D center on the industry) and they legally ask for companies to pay to use their patented technology."
If they disclose it would be easier to cope with. Maybe one can remove any offending code, but one is not given the chance to do that...
This is why their tactics are bad.
Maybe someone came up with the idea, without consulting their R&D's ideas. Regardless of how many billions Microsoft poured into it.
That is only one reason why Microsoft sucks and why it approaches extortion.
You are making some assumptions by Anonymous Coward · 2012-01-12 05:07 · Score: 5, Insightful

Sure, if you take it as a given that Google is lying and Microsoft is telling the truth, your post becomes reasonable.
1. Google does not believe that Android infringes any Microsoft patents.
2. Neither this nor any of the other licensing agreements reveal what MS patents are used in Android.
3. When Barnes and Noble was approached by Microsoft to make such a deal, MS refused to even tell B&N what patents were involved, and how they were being infringed. It was "trust us, your product infringes big-time, so pay up".
4. B&N told MS they wouldn't agree to anything without specifics. MS showed them the allegedly infringed patents, B&N laughed their asses off and revealed to the world, and told mighty MS "go ahead and sue us and see where it gets you". MS is now suing B&N, and B&N has filed antitrust complaints against MS.
5. Even if you take the most pro-MS view possible, the MS patents revealed by B&N cover a tiny subset of Android's capabilities. Yet MS demanded higher licensing fees for use of these patents than what they charge to use all of Windows Phone 7.
Put it this way - do you honestly believe that Microsoft Research laid the groundwork for Android? Do you believe Android developers paid any attention to any "patented inventions" from Microsoft?
I can't tell whether you are a) a shill b) hopelessly naive or c) sarcastic. I certainly hope it's c).