Yet another Android vendor pays Microsoft patent royalties

Yet another Android vendor pays Microsoft patent royalties

Summary: Just days after announcing that General Dynamics was paying Microsoft undisclosed patent royalties to cover Android-based devices, Microsoft announced a similar deal with custom-PC vendor Velocity Micro Inc.

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Microsoft announced its second Android patent-protection deal this week on June 29.

Just days after announcing that General Dynamics was paying Microsoft undisclosed patent royalties to cover Android-based ruggedized devices it was selling, Microsoft announced a similar deal with Velocity Micro Inc.

Microsoft and Velocity "have signed a patent agreement that provides broad coverage under Microsoft’s patent portfolio for Velocity Micro Inc. Android-based devices, including Velocity Micro, Inc.’s Cruz Tablet," according to Microsoft's press release. As in the case with General Dynamics, terms are not being made public, other than the fact that Microsoft will received some undisclosed royalties.

Velocity Micro, based in Richmond, Virg., is an OEM that provides companies with custom-designed and -built gaming system, PCs, notebooks, workstations, servers and small-business systems. While its Cruz tablet runs Android, its notebooks run Windows 7.

Microsoft has been targeting vendors running Google’s Linux-based Android operating system and is working to convince them to pay royalties to Microsoft to cover alleged patent-infringement issues involving Android. HTC signed a patent-protection deal with Microsoft for an undisclosed amount last year that focused on Android.

Not all Android vendors are signing on the IP (intellectual property) dotted line, however. Barnes & Noble is in a legal fight with Microsoft over Microsoft’s claim from earlier this year that the Android-based Nook e-reader violates Microsoft patents.

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Topics: Microsoft, Hardware, Laptops, Mobility, Operating Systems, Software, Windows

About

Mary Jo has covered the tech industry for 30 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).

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61 comments
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  • RE: Yet another Android vendor pays Microsoft patent royalties

    An just how are these vendors expect to make a profit?<br><br>Microsoft is in search of a new monopoly.
    Return_of_the_jedi
    • RE: Yet another Android vendor pays Microsoft patent royalties

      @Return_of_the_jedi If you have to make a profit with a free OS, the business modle is wrong. If you have make profit based on an OS that voliate others IP, then you shouldn't start.
      jk_10
      • RE: Yet another Android vendor pays Microsoft patent royalties

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        bradyroy
      • RE: Yet another Android vendor pays Microsoft patent royalties

        @jk_10 I also said that you have a great explanation in your all comment. <a href="http://www.iaafoe.org/IAAFOE/lorenz-high-school.asp">Lorenz High School</a> | <a href="http://lorenzuniversityscam.com/Lorenzuniversity/testimonial.asp">Lorenz University</a>
        bradyroy
    • The same way everyone else does

      @ Return_of_the_jedi

      They have to add value to their inputs. Adding value owned by someone else doesn't count.
      WilErz
      • RE: Yet another Android vendor pays Microsoft patent royalties

        @WilErz yes you right that Adding value owned by someone else doesn't count. <a href="http://www.onlineeducationfacts.com/">Must High School</a>
        bradyroy
    • RE: Yet another Android vendor pays Microsoft patent royalties

      @Return_of_the_jedi <br>First it is business 101; These businesses do not pay the MS royalties, same as businesses do not pay government (city, county, state, federal) taxes. Raising taxes on businesses will cause them to raise prices to us consumers to cover their tax increase; again, think MS royalties or tax. Folks think business pays tax, in this case the MS tax, however smart folks understand it is always the consumer that pays. Folks that yell "businesses should pay higher taxes" are stupid or ignorant. They do not understand that they themselves are that pay. <br><br>So, as for the royalties to MS, oh-well, it is us the consumer that will pay more for those products. Taxes and royalties are a cost of doing business that are transferred to us consumers.<br><br>To make a profit to stay in business, businesses charge their business expenses everything to the consumer. So, having to pay MS royalties is not from their pocket, it is not a hardship on them. They will raise the cost of their product to cover that which they must to pay. Their profit, if any, remains the same. It is we the consumer, the bottom of the food chain, that take the financial hit not businesses. <br><br>Do not feel sorry for these business, feel sorry for your own pocket as that is were the money will come from to pay that MS tax.
      BubbaJones_
      • Or the other &quot;taxes&quot;

        @RicD_ To you think HTC does this for free? Or do you consider the profits HTC banks as "taxes?" HTC builds something, you get it, you pay. Microsoft builds something, you have it in Android, you pay. There is no difference.

        HTC and other companies are free to take out the patent-infringing code and put in their own, but its probably too costly to do that.

        The real question is how could Google have done this in the first place and passed off the OS as "free?"
        A Gray
      • RE: Yet another Android vendor pays Microsoft patent royalties

        @RicD_

        You may want to review economics 101.

        Who "pays" the taxes depends on the elasticity of a given product. Sometimes that is the consumer, sometimes that is the producer. Most of the time it is shared by both.

        Remember that a tax increases the price of a good and when the price of a good increases, the demand decreases. So a business can't just pass along the entire expense to consumers without reducing their sales, which reduces their profits.
        yoshipod
      • Right, and wrong!

        You are 100% correct when it comes to taxes paid by a corporation being passed on to the consumer as higher prices to the consumer on products/services.

        However, you're wrong on the IP part of your post.

        A corporation is not in business to allow its properties to be used for "free". IP is the property of the company that created the idea or innovation, and thus, as the law allows, they should continue to profit from those ideas or innovations, which took a lot of work and time and money to create. If company feels the need to use some IP to create another product which partly uses the IP from another company, then they should recognize the fact that, perhaps the IP holder needs to be compensated in some form.

        What incentive would there be for any company or individual to be creative and innovate, if his/her invention could be used freely by anybody else or any company, to enrich themselves without proper compensation to the originator of the idea or innovation? It wouldn't be fair, and it would actually be counter-productive.
        adornoe
        • yoshipod: You may want to revisit Economics 101

          <i>Remember that a tax increases the price of a good and when the price of a good increases, the demand decreases.</i><br><br>Partly true. But, the demand does not decrease. What decreases is affordability. But, a consumer may still want or need the product or service in question. It's mostly a matter of affordability if the consumer doesn't have the dough at the moment. <br> <br><i>So a business can't just pass along the entire expense to consumers without reducing their sales, which reduces their profits.</i><br><br>A company's profits will decrease with less sales, but the profits can also decrease with lower prices. It's mostly a matter of demand, and the demand can be influenced by affordable prices, but, affordable prices can have a deleterious effect on the bottom line of a company and the product might have to be terminated if the company can't afford to sell it at low prices. <br><br>However, the fact remains that, corporations do "pay taxes", but, it's mostly for the appearance of "fairness" and not in real terms. In real terms, no matter what the price of a product, taxes are one of the costs of doing business, and as such, it's always passed on to the consumer in higher prices for those products. The idea is to make it as unnoticeable as possible or as "unhurtful" as possible. Not everybody will be able to afford all products, and no company ever tries to please all consumers all the time, but those that can afford a product will be paying the taxes for a corporation, no matter what the price of a product. Some people won't ever be able to afford a Mercedes, but, they probably can afford Huyndai. It's a matter of who the market is and what the market will bear.
          adornoe
      • RE: Yet another Android vendor pays Microsoft patent royalties

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        bradyroy
    • RE: Yet another Android vendor pays Microsoft patent royalties

      @Return_of_the_jedi

      Microsoft are losers, sue Google. And i hope they lose.
      Sultansulan
    • RE: Yet another Android vendor pays Microsoft patent royalties

      @Return_of_the_jedi I agree with you and also i said that a great explanation. <a href="http://www.iaafoe.org/IAAFOE/lorenz-high-school.asp">Lorenz High School</a> | <a href="http://lorenzuniversityscam.com/Lorenzuniversity/testimonial.asp">Lorenz University</a>
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  • the racketeering must stop

    and the DOJ should prosecute M$ under the RICO statute.
    The M$ crooks are stifling innovation by acting like parasites on the growing FOSS industry.
    Linux Geek
    • RE: Yet another Android vendor pays Microsoft patent royalties

      @Linux Geek Why not ask Google to indemnify all its OEM partners who use Android ? Is Google scared of something ? They shouldn't be scared if they haven't stole any IP !!!
      1773
      • RE: Yet another Android vendor pays Microsoft patent royalties

        @1773
        FOSS does not need indemnification.
        Linux Geek
      • RE: Yet another Android vendor pays Microsoft patent royalties

        @1773 <br><br>"Why don't ask" M$ to sue Google and be done with it.

        Sort of like locking up the drug user and not the dealer, eh?
        Return_of_the_jedi
      • RE: Yet another Android vendor pays Microsoft patent royalties

        @Return_of_the_jedi As far as I know, only those who make monetary profit out of the stolen IP can be sued in the court of law. Since Google doesn't make a dime on Android (it makes money on the extra services and advertising) Google cannot be sued. OEMs make profit on their hardware which use Android so they can be sued. Microsoft indemnifies all its OEM vendors and partners from any IP related lawsuit. I am no expert but this is what I have read. If you have any more information I would be delighted to know.

        EDIT: And maybe Microsoft cannot sue Google because Google may have licensed the required IP from Microsoft for its own use and not licensed it to be used by all the OEMs who use Android.
        1773
      • RE: Yet another Android vendor pays Microsoft patent royalties

        @1773 <br><a href="http://www.networkworld.com/news/2007/100907-microsoft-ballmer-red-hat.html" target="_blank">M$ said Redhat infringe on it's IP</a>. <br>RedHat is making a profit. What's the difference in the two cases? Both RHT and Google aren't small fries to be mucked with.<br><br>Hence M$ nature is to go after the weak.<br><br>Edit: If M$ had a case, Moto and B&N would have signed.<br>The B&N case is going to prove big. The others may/can come back at M$ for damages.<br><br>PS. M$ has chosen to sue the mobile space and move on from the Enterprise. Those guys have the <a href="http://www.openinventionnetwork.com/" target="_blank">OIN</a> to defend them.
        Return_of_the_jedi