Judge rules that targeting Android for destruction is legally OK

Judge rules that targeting Android for destruction is legally OK

Summary: An ITC judge tossed out the key defense Barnes & Noble wanted to use in a patent suit by Microsoft. The full opinion lays out the existential threat Android faces from patent claims.

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We learned on January 31 that Barnes & Noble had suffered a major setback in a patent-infringement lawsuit filed against the company by Microsoft.

That day, an administrative law judge (ALJ) at the International Trade Commission (ITC) had tossed out the company’s key defense, that Microsoft was engaging in "patent misuse" as part of a larger scheme to "kill Android." Today the full opinion has been made public.

I found the decision thanks to a story by GeekWire’s Todd Bishop, who noted that Theodore Essex, administrative law judge for the International Trade Commission, had called Microsoft’s negotiating tactics “certainly hard bargaining,” but not illegal. (You can see the full PDF here.)

Here's what the ALJ said:

Microsoft argues that Barnes & Noble has failed to offer any conduct that could either by itself or collectively constitute patent misuse. Barnes & Noble responds that Microsoft is committing patent misuse through its actions against the Android operating system. Staff agrees with Microsoft that Barnes & Noble’s theory does not amount to patent misuse.

The decision lays out a chronology: beginning in February 2010, Microsoft “engaged in discussions” with Barnes & Noble over Microsoft's portfolio of more than 65,000 patents. Microsoft “suggested Barnes & Noble take a license to Microsoft’s patents and mentioned potential royalty rates.”

Barnes & Noble made several counter-offers, but, the ALJ notes, “Microsoft did not consider them fair and did not respond.”

After a second meeting in December 2010, Microsoft sent a cease-and-desist letter with claim charts for five of the six patents mentioned in that letter. In the public version of the January 31 opinion, two full pages (from the middle of page 2 to the middle of page 4) are redacted at this point. Presumably those include details of Microsoft's “licensing program aimed at manufacturers and sellers of devices that use the Android operating system.”

The ALJ concluded that Microsoft had done nothing wrong:

The ALJ finds that even viewing the undisputed facts in a light most favorable to Barnes & Noble, Barnes & Noble has failed to prove the defense of patent misuse in this case.

The judge dismissed allegations that Microsoft’s collaboration with Nokia and its attempts to acquire patents from Nortel and Novell were objectionable and said no: “The only thing such concerted action might demonstrate is an ill-will towards Android.”

This, for me, was the kicker:

Even assuming that these transactions and the related evidence establishes that Microsoft is bent on eliminating Android as a competitor, the mere fact that Microsoft is targeting Android for destruction is insufficient to establish an antitrust violation, let alone patent misuse.

The ALJ specifically called out quotes from previous antitrust cases. One green-lighted “a desire to crush a competitor” while a second noted that “hostility to competitors (‘these turkeys’) is irrelevant.”

The conclusion?

Microsoft’s tactics are certainly hard bargaining, but they do not rise to patent misuse because there is absolutely nothing about such tactics that expand the scope of any patent.

And if the licensing fee seems too high, well, suck it up and pay. Barnes & Noble accuses Microsoft of trying to drive up the cost of Android (and make Microsoft’s Windows product more attractive) by charging an Android licensing fee roughly equivalent to the cost of licensing Windows Phone.

The judge cites yet another precedent to deny that claim: “[A] patent empowers the owner to extract royalties as high as he can negotiate with the leverage of that monopoly.” Indeed, he adds, Microsoft could simply refuse to license the patents at all. (The situation would be different if any of the patents in question were identified as standard-essential.)

The case now goes to trial, with evidentiary hearings scheduled to be under way already.

Microsoft isn't the only mortal enemy Google and its Android hardware partners face. Before he died, Steve Jobs said “I’m going to destroy Android, because it’s a stolen product.” And he promised he would “spend every penny of Apple’s $40 billion in the bank, to right this wrong.”

Apple shows no signs of backing down in its Android-related lawsuits. And so the patent wars go on.

Related posts:

Topics: Legal, Android, Google, Microsoft

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186 comments
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  • RE: Judge rules that targeting Android for destruction is legally OK

    On to the specific patents, then. Are they relevant? valid? In the end, even if Barnes & Noble loses, by having shined a light on the Microsoft patents in question Google has gained valuable intelligence to craft workarounds in Android. The only question is whether or not Microsoft has showed *ALL* of their cards in this case.
    Rabid Howler Monkey
    • RE: Judge rules that targeting Android for destruction is legally OK

      @Rabid Howler Monkey
      B&N will sign a license agreement shortly, and the two parties will ask the case to be dismissed. They don't have the cash to drag this out, and it's obvious they're not going to win.
      WebSiteManager
      • RE: Judge rules that targeting Android for destruction is legally OK

        @WebSiteManager I wonder if this could be the start of whatever the business equivalent to a class action lawsuit is? Perhaps alone B&N can't handle it, but if all the companies who Microsoft is strong-arming band together, I'm guessing MS would be the one that couldn't drag it out...both for financial and political reasons.
        ExploreMN
      • RE: Judge rules that targeting Android for destruction is legally OK

        @ExploreMN<br><br>Not likely... you need to remember that MS got into the patent acquisition game as a result of being slugged themselves one too many times.... and given the Apple, who was the first of the mega patent bullies, is still getting away with their own nonsense.... unlikely a class-action style rebuttal would work.<br><br>This is just another example of both how destructive the US patent system (at a global level, not just within your own borders I might add) and why the global patent system as a whole needs a complete and total overhaul... it's become all about who can buy up the most patents rather than about developing and thus protecting truly creative innovation!
        kaninelupus
      • RE: Judge rules that targeting Android for destruction is legally OK

        @WebSiteManager How is it obvious that B&N is not going to win? This ruling has nothing to do with the actual patents. I don't think Microsoft will win much of anything if this goes to trial because the patents are obvious, contain prior art or are an inconsequential part of the Nook's OS. B&N's biggest conundrum is that they may find it cheaper to settle than to fight it. This case just provides yet another illustration of how software patents are bad for business and innovation. Microsoft should feel ashamed to have to stoop to this level.

        In addition MS needs to start watching their own back now since Motorola is now going after Windows 7 and Xbox for infringement.
        K B
      • RE: Judge rules that targeting Android for destruction is legally OK

        @ExploreMN

        They did all band together: and the bandwagon is to suck it up and pay.
        x I'm tc
      • RE: Judge rules that targeting Android for destruction is legally OK

        @WebSiteManager If that were the case they would have already signed. Microsoft's agreement would prevent them from being able to improve Android and would make the Nook unprofitable; caving in would destroy them.
        jgm@...
    • RE: Judge rules that targeting Android for destruction is legally OK

      @Rabid Howler Monkey
      what are you talking about gained intelligence? don't you know that google bought motorola mobility who refused to also license the patents and are being sued by Microsoft? therefore, I believe google is well aware of which patents and how they affect the android OS.

      the thing about Motorola and Microsoft is that google already license some of the patents so the question is are those patents transferable since motorola mobility will be acting as a separate company even though owed by google.
      since google bought motorola is might come out that they're not violating the patents, I'm sure this would send ripples all over the blogosphare. I wonder what the masses of commenters would say.
      blazing_smiley_face
      • RE: Judge rules that targeting Android for destruction is legally OK

        @blazing_smiley_face With both EC and US DOJ approval having been granted earlier this week for Google's acquisition of Motorola Mobility, the transaction has yet to be finalized. However, it is close.<br><br>In addition, the patents used by Microsoft against Motorola Mobility appear to be different than those used against Barnes & Noble. Here's a rough list:<br><br>Microsoft v. Motorola Mobility patents (as of August, 2011)<br>5,579,517<br>5,758,352<br>6,621,746<br>6,826,762<br>7,644,376<br>5,664,133<br>6,578,054<br>6,370,566*<br>* Initial US ITC ruling, December, 2011<br><br>Microsoft v. Barnes & Noble patents (as of March, 2011)<br>5,778,372**<br>6,339,780<br>5,889,522<br>6,891,551**<br>6,957,233**<br>** as of February, 2012
        Rabid Howler Monkey
      • RE: Judge rules that targeting Android for destruction is legally OK

        @blazing_smiley_face

        We're talking about tens of thousands of bogus patents. Tens of thousands. In ten years in medical research, I think I reviewed/transcribed tens of thousands of patient charts. These people could FIND their patents without power databases. No one has a conscious understanding of them.
        tkejlboom
    • RE: Judge rules that targeting Android for destruction is legally OK

      @Rabid Howler Monkey Patents are public knowledge and Google probably already knows which ones Microsoft is trying to assert because Microsoft has also sued Motorola Mobility over Android, which Google is in the process of acquiring. Litigation risk would definitely have come up during due diligence.
      InternetSecurityAnalyst
      • RE: Judge rules that targeting Android for destruction is legally OK

        @DanColasanti Then google needs to get that info out to the public. Us developers have no idea about legal junk, we just know that if theres an idea we are not allowed to thoughtcrime, we can come up with better ideas. But we cant if we're not told what were not allowed to do. This really is googles responsiblity here.
        shayne.oneill
      • RE: Judge rules that targeting Android for destruction is legally OK

        @shayne.oneill

        Everyone is under nondisclosure. If any of these companies break those contracts, they will pay thru the nose whether the underlying issue is favorable to them or not.
        x I'm tc
    • RE: Judge rules that targeting Android for destruction is legally OK

      It seems like any open-source product is infringing on some big company's patents. This is the only stumbling block left for open-source software to over come; the world would be a better place if we just did away with software patents altogether. Then, we'd really be free!
      mike_hauss@...
      • RE: Judge rules that targeting Android for destruction is legally OK

        @mike_hauss@...

        I agree! I think software patents are completely bogus.
        mhsodos
      • RE: Judge rules that targeting Android for destruction is legally OK

        @mike_hauss@... Which is why Google is buying Motorola Mobility. They have thousand of patents. The good thing is that Google seems ready to give those away via it's Android OS since they don't charge for it and at the same time would shield phone makers from lawsuits.
        mrxxxman
      • RE: Judge rules that targeting Android for destruction is legally OK

        @mike_hauss@... I actually kind of blame google for all of this because its refusing to defend its product from microsoft. I mean yes apple and microsoft are the bad guys, but everybody already knew that apple+microsoft are basically sociopathic entities, so complaining about it seems kinda pointless. But google isn't a sociopathic entity, and sells itself on the fact ("dont be evil") and thus can be held accountable on the claim, yet its letting its customers drown in these patent lawsuits for one simple reason that microsoft wont tell anyone what the patents actually are. Since they are about googles products, its high time google used legal discovery to expose what those patents are so the open source developers can create work-arounds to remove the infringements. A patent owner and user if in conflict are *supposed* to give the other the ability to right whats wrong, but since microsoft refuses to tell anyone what their property actually is, its unfair to expect others to pay up when they infringe. We are talking tens of thousands of bizarely worded murky patents here, no-one can tell what patents are being infringed, if any. <br><br>And if it turns out microsoft didnt have any patents on it at all, well, microsoft might end up a bit lighter in the wallet, since a profit model of tricking people into handing over profits is probable seriously illegal.
        shayne.oneill
      • @mike_hauss@...: Google is as hypocritical as they come.

        They sell this "do no evil" line and people actually buy it. In the mean time, they happily appropriate others content and IP through search, scanning books (Google Books is as evil as a company cank be from an IP standpoint), code or what not.

        They tie it to the words "open" and "free" while linking to their highly profitable ad words and search. They wait for the sheep to defend them in their actions when owners of appropriated IP cry foul.
        Bruizer
      • RE: Judge rules that targeting Android for destruction is legally OK

        @mike_hauss@...
        That's pretty rediculous... companies spend millions on researching and creating technology and you think someone should be allowed to use if for free... Come on now...really. If I like that TV in your house can I just come and take it... I think not.
        C#2010
      • RE: Judge rules that targeting Android for destruction is legally OK

        @ shayne.oneill

        It seems that the Google's "don't be evil" is another way to say "but please, let us steal, don't shoot us yet, that would be evil of you!"

        If Google are such a great company, full of research and development talent etc. for they years they are "developing" Android they could have essentially discovered what patents their "OS" is infringing and eventually found ways around it. But they are such great guys, why would they care? It's easier to pretend that Apple and Microsoft are the bad guys.
        danbi