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Another Android and Chrome OS device developer pays Microsoft patent royalties

By | October 23, 2011, 7:57am PDT

Summary: With a newly minted agreement with Compal Electronics, Microsoft officials say that they now have more than half of the worldwide ODMs for Android and Chrome OS devices now paying them patent royalties.

Original design manufacturer (ODM) Compal Electronics has licensed publicly undisclosed Microsoft patents and is paying Microsoft undisclosed royalties to cover phones, tablets and e-readers it makes that run Android and the Chrome OS.

Microsoft and Compal announced they had signed a patent agreement on October 23.

Microsoft officials said that with the addition of Compal to its patent-protection roster, Microsoft now has “more than half of the world’s ODM industry for Android and Chrome devices … now under license to Microsoft’s patent portfolio.” (Other ODMs who are paying Microsoft for Android and Chrome patent protection include Wistron and Quanta Computer. Quanta is the ODM for the Amazon Kindle Fire and RIM’s PlayBook.)

“We are proud of the continued success of our licensing program in resolving IP issues surrounding Android and Chrome,” said Horacio Gutierrez, Corporate Vice President and Deputy General Counsel for Intellectual Property at Microsoft, according to a statement in Microsoft’s latest press release.

Microsoft has not publicly disclosed which of its patents that it contends are infringed by Android and Chrome. Barnes & Noble officials said earlier this year, Microsoft officials require OEMs and ODMs to sign non-disclosure statements before sharing with them the details about their alleged infringements. (Barnes & Noble and Motorola Mobility are still engaged in legal battles with Microsoft over Microsoft’s claims that their Android-based devices infringe Microsoft patents.)

Speaking of Motorola Mobility, the International Trade Commission — which is investigating patent-infringement complaints by Microsoft and Apple against Motorola Mobility — has extended the target completion date for those decisions by six weeks due to case backlog, according to Florian Mueller of the FOSS Patents blog. (Mueller repeats in his post his disclosure that he is doing a Microsoft-commissioned study on the worldwide use of FRAND-pledged patents, for what it’s worth.) The initial decision on the Microsoft-Motorola case is now slated for December 16, 2011, with the final decision target date now April 16, 2012.

Update: Mueller also has been tracking the patents over which Microsoft and Motorola are fighting. He notes that these 21 patents are likely among those that Microsoft asserts against Android.

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Mary Jo has covered the tech industry for more than 25 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

Disclosure

Mary-Jo Foley

Freelance journalist/blogger Mary Jo Foley has nothing to disclose. WYSIWYG (what you see is what you get). I do not own Microsoft stock or stock in any of its partners or competitors. I have no business ventures that are sponsored by/funded by Microsoft or any of its partners or competitors.

Biography

Mary-Jo Foley

Mary Jo Foley has covered the tech industry for 25 years for a variety of publications, including ZDNet, eWeek and Baseline. She has kept close tabs on Microsoft strategy, products and technologies for the past 10 years. In the late 1990s, she penned the award-winning "At The Evil Empire" column for ZDNet, and more recently the Microsoft Watch blog for Ziff Davis.

Got a tip? Send her an email with your rants, rumors, tips and tattles. Confidentiality guaranteed.

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0 Votes
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Sick and tired
Michael Alan Goff 23rd Oct
Can we please stop these pointless patent lawsuits?
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@Michael Alan Goff

Where there is no respect for IP? Just copy whatever books your want without permission of the copyright holder? Download any movie or song for free? Copy others designs and architectures without impunity?
Not every idea deserves a patent.

I am simply stating that if the time has come when nobody can make anything without violating some patent, as it seems it has, then maybe something is wrong with the system overall.
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@Michael Alan Goff

Encompass many methods. We are not talking about a garage shop operations here. Google has 10,000's of thousands of patents (once the MMI deal goes through). MS has 10,000's of thousands of patents. Many (most?) are junk. A few are novel. Most have several thousands invested in development. A few may have many 10's of millions. A couple may have a few 100's of millions.

If you have a couple of companies actually spending tons of effort (money, people and resources) in trying to come up with new methods of interaction and a dozen companies simply copying the effort, you will soon have no company willing to put forth the effort for innovation.

The penalty is the copiers will not have the opportunity for growth as they are legally shut out of markets or have to pay for use of methods they did not originate.
@Bruizer

But we don't know if the ones that Microsoft is suing for are junk or not.

Do you?
@Michael Alan Goff
>>But we don't know if the ones that Microsoft is suing for are junk or not.

>>Do you?

I don't need to know because I am neither part of Microsoft nor the ODM of Android and Chrome OS. I am also not part of USPTO or legal system, so why should I? And now here is direct question, why do you need to know about it? Are you planning to make your own devices using Android or Chrome OS?
You aren't in the least bit curious about it?
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You obviously don't know.....
linux for me 23rd Oct
@Bruizer

What the difference is between patents and copyrights. This has NOTHING to do with copyrights, but the patenting of things that are obvious, have prior art, or mathematically based (which includes most software).

These developers are paying blackmail to Microsoft simply because it is cheaper than fighting. That is why Microsoft has picked on only those who can not afford to fight back. When Microsoft runs into the big boys, such as IBM, then they will find out how many of those claimed patents are real.
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"But we don't know if the ones that Microsoft is suing for are junk or not."

I wasn't aware that any of these had actually resulted in a lawsuit yet. I would think that as soon as a lawsuit is filed, all the patents in question would be made public. It is the only reason we know about which patents Apple has sued over because those disagreements have actually gone to a lawsuit. Until MS decides to go to trial, there is no obligation to tell the public anything about these patents. Apple doesn't. Intel doesn't. Why should MS?
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There have been no lawsuits
Michael Alan Goff 23rd Oct
because it has been settled out of court. Also, Apple is quite open about which patents it has and which patents it thinks that people are infringing on. The entire time it was threatening Samsung with a lawsuit, we knew why.

Do not think otherwise.
@Bruizer You are making a false connection between your points and Microsoft's litigation threats. Screw them.
You aren't in the least bit curious about it?

That's because Rama.NET is a proprietary tool that accepts all things in question from his masters in Redmond.

You are not allowed to question his masters. That is a sin. Only unquestioning sheep are tolerated. Time to get with their program and follow their leader.
@Michael Alan Goff

If you wish to abandon the idea of patents, trust me, Microsoft along with Google would be glad. Forget the patents what Microsoft has, if the patent world just opened up, to a point where any idea can be picked up, with the size & scale of MS & Google, have let me assure you all start ups are dead. Also, if MS is just about able to recoup all the money they have given to companies like Lodsys, Eolas, i4i, et al, for their patents from Microsoft's IP licensing program, they should be glad. MS has paid far more than it can hope to recoup from all these OEMs.
Yeah, I know what you mean.

Without such great patents as the vague ones that Lodsys has, the ones that Apple is using to bar competition, and so forth, there wouldn't be as much competition.

I'm not anti-patents. I'm simply against using patents as a tool to stop any sort of competition, which is what they are used for at this point. A company will patent something extremely vague, and then interpret it so that nothing can be made.

How is this good for competition?
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What lawsuits?
toddybottom 23rd Oct
@Michael Alan Goff
Can you provide me with a link? I was under the impression that MS has yet to sue any Android OEM over these patents but I could be wrong.
@toddybottom

There haven't been any lawsuits from Microsoft yet because they've only had to threaten. Do you think that those Android OEMs just reached out to Microsoft to give them money?

But overall, I was talking about the climate in general. Why innovate when you can litigate?
@Michael Alan Goff
I see you don't know what the difference between a lawsuit is and a meeting between companies are lol. Man you guys are the funniest people ever. Lawsuit what apple and Samsung have. nothing like what happened here. Did you hear any judge make a decision. lol
I think the scary part is that Microsoft keeps being reported as making companies sign non disclosures .... which means, nobody can say what those infringements are, so more people can ignorantly use them, so Microsoft can keep making money off of them.
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All companies utilize NDAs.
Bruizer 23rd Oct
@madbohem

What is your point?
@madbohem
Well, FTC and SEC know about what are those and USPTO knows what are those, and as long as Legal System of this country knows about those, I am not worried or scared.

MSFT has to report to SEC about their income and FTC about trade practices and USPTO already knew about the patents under question, so why should I be worried or scared.
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You should not
Solid Water 23rd Oct
@Rama.NET

People who are doing design and development should.

Note:
I am not talking here about the people who are using whatever is written down in books or taught in colledge. I am talking about people who can come up with an unordinary solution. And the fact that somebody already patented it because this somebody was born earlier makes me feel bad.

YMMV
@Solid Water
Then signup with Microsoft, and they are happy to let you know. Problem solved.
@Rama.NET
Yes, USPTO knows about it so I am sure it must not be junk. It's not like the USPTO has ever handed out obvious patents.

But if you really prefer not to know, I might remind you that you always have the option to leave the curious to have the discussions. Ultimately, if all you have to say is the government is looking after me so it's all good then you don't really have much to add to the discussion.
Then signup with Microsoft, and they are happy to let you know. Problem solved.

@Rama.NET
No, some of us are going to ask that here. You may not like that but that's too bad. Tough. Your responses have become irrelevant.
Apple pays these two... The only party that benefits for this is MS.
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Because of NDAs
Dietrich T. Schmitz * Your Linux Advocate 23rd Oct
there is no disclosure as to the specific patent claims MS are making and the FUD continues.

AFAIK, this is probably FAT and ActiveSync ONLY.

But MS wouldn't want you to know that.
@Dietrich T. Schmitz * Your Linux Advocate
Then why don't you signup NDA and get to know about those? I am not interested in that, so I really don't care.
@Rama.NET
Your argument makes no sense. What NDA can we all sign that'll let us know?

If you aren't interested in knowing and you don't care then you have the option to not make a pointless troll post and let people who are interested have a discussion without reading your pointless troll posts.
From what I see, the killing point of Android will be the licensing fees to Microsoft.

If Microsoft produces a decent windows mobile O/S all hardware manufacturers (Samsung, HTC, etc) would jump ship in order to stop paying all these fees to Microsoft.
@Chkaiban
Hmmm, last time when I checked, Samsung, HTC, LG, Nokia, Acer, and Dell are already making Windows Phones.

First of all most of the OEMs make devices using their own platform or if not multiple, it is called diversity. Which is the same Microsoft approaches. They make software for Windows (their own platform), Mac, iOS and now Android. And these OEMs are diversifying their portfolio, thus they could make money from all the corners.

Please learn this fact and I think you would understand it clearly, there is nothing free in this world except parent's love.
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@Rama.NET

For Android?

I am one big ear now.
Solid Water
the search for Microsoft or bing on Android market and it will happily show you.

or I will make it easy for you, https://market.android.com/details?id=com.microsoft.bing&feature=search_result#?t=W251bGwsMSwxLDEsImNvbS5taWNyb3NvZnQuYmluZyJd

Also Skype is now part of Microsoft. Whats your point?
Speaking of Bing, when will they let me load it on my tablet?
@Chkaiban
I don't think so.
OEM pay $15 per phone for Windows Phones when those with agreement with Microsoft pay up to $5 per Android phone to Microsoft.Thus unless there are other hidden costs it should be cheaper for them to use Android than Windows Phones. This said contrary to other ,whom previous CEO has sworn to destroy Android, Microsoft doesn't want to input the sales of Android devices just to get a payment for its patents, which is somehow acceptable.
@timiteh

"OEM pay $15 per phone for Windows Phones "

It is alleged by some that that is what is being paid. Given the NDAs I doubt very much that you *know* any more than I *know* what is being paid. I have seen reports that HTC are paying $5 per device - but we do not know that, do we? My guess would be that the royalty varies according to how many of Microsoft's patents are involved, but that is only my guess. It is however, as you say, likely that it is still cheaper for the OEMs to use Android regardless.
@FrederickLeeson
he is talking about Windows Phone license when he mentioned $15 per phone, but that is also questionable, because so many media outlets said it would be between $7 to $15.

>>It is however, as you say, likely that it is still cheaper for the OEMs to use Android regardless.

It is not about the license cost, it is about freedom or flexibility. They can screw and bend the system for their purpose and their clients (Carriers, and others).
@MJ.

As I understood the motive behind the suits, was to make it too expensive for the ODM/OEM to use android.

Do you think it's working as Ballmer planned?
MJ:

It's easier for them to sign.
Then don't pay, to later get sued for breach of contract which is much cheaper.

It does take resources to manage those account. What happens if someone doesn't/refuse to pay. If they report to Ms they sold zero devices, what's MS's next move? Sue them for patent or breach of contract? Just curious to know your take.

I think the FUD is stronger than the reality.
@Return_of_the_jedi How come nobody has done this? The reality is, armies of lawyers have come to the conclusion that MS claims are legit and so they need to pay up.

As for patent validity and cost/time to sue, that is 100% a government created problem. We should demand that govt clean up the patent office and improve the justice system.
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@otaddy - Source, pls. You don't know if the armies of lawyers concluded they're legit, or concluded it's cheaper to play than fight. That's especially true in the cases where cross-licensing deals are established - because it becomes relatively sting-less to agree to pay $X for each Android device if you're getting $Y back from a different avenue - and at that point, the REAL cost of using Android is X - Y, and none of the parties involved are allowed to disclose anything about the details.

Business done in smokey backroom. Used to be just for Tammany Hall.
Hmmm. Just watched 'The Rise and Fall of Legs Diamond' - and took away a relevant message - if one wants to quit paying protection money to racketeers, one must syndicate with similarly put-upon parties....
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Disgusting really...
Naryan 24th Oct
I'm so sick of hearing about these. Just greed, that's all it is. It's the epitome of what's wrong with society.

Microsoft and Apple (among many, many others)should be ashamed of what they've become.
0 Votes
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If Android dies it will be obvious who killed 'Roger the Android Rabbit.
@albionstreet
Watch how many trolls reply to your post saying how much they prefer to be in ignorance, how much they don't care, how much the government is taking care of them and how much you should be just like them.
One odd aspect unexplored is that if Android violates Microsoft's 'patents', and Android violates Apple's ''patents', wouldn't Microsoft or Apple thus be also violating the other's 'patents' ? It would be charming if these two thugs could have a showdown fight to the death and both die soonest.

Until then I applaud the licensees' decision to pay the Microsoft racketeers' extortion, for the same reason I would agree that it made more sense for businesses in Old Chicago to pay protection to gangsters no matter how wrong it was. I only hope that should the law find against the patents --- if ever it comes to court --- the fees already paid have to be returned to those bilked by Microsoft.
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