Google Shows How Not to Complain About the Patent Mess

By  |  Thursday, August 4, 2011 at 11:01 am

Yesterday, Google Chief Legal Officer David Drummond blogged about the patents arms race that has major tech companies building gigantic portfolios of pricey patents, then using them to launch lawsuits or extract licensing fees (or, sometimes, to defend themselves against other companies launching lawsuits or extracting licensing fees). He called his post “When patents attack Android,” and accused Google competitors such as Apple and Microsoft of conspiring to buy patents and use them to damage Android in the marketplace.

And then something unexpected happened: Microsoft released an e-mail from a Google executive which seemed to prove that Microsoft had invited Google to join it in bidding on some of the patents in question. Google declined to participate. Some conspiracy!

Drummond’s post has accomplished something which you might have thought was impossible: it’s leading to blogosphere coverage which largely sides with the patent aggressors. And while I agree with at least part of the gist of the post–patents on questionable “inventions” are stifling innovation rather than aiding it–the post doesn’t make a convincing case that Google is being persecuted.

To wit:

1. Drummond: “Microsoft and Apple have always been at each other’s throats, so when they get into bed together you have to start wondering what’s going on.” Sure, Microsoft vs. Apple is the tech world’s most legendary ongoing battle. But the companies’ history of working together when it serves both their interests is just as long. Remember this?

2. “But Android’s success has yielded something else: a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents.” Which patents are bogus, and why? We don’t need a full accounting, but examples would have helped. (Google has vast quantities of patents itself, so I presume it’s not opposed to patents, period.)

Also: nothing inherently wrong with competition between big companies being hostile. It’s not always genteel and cheerful, and that’s okay. Even necessary.

3. “Instead of competing by building new features or devices, they are fighting through litigation.” What’s with the “Instead of?” Apple is responsible for more of the smartphone biz’s influential new features than any other single company. Its devices are the most iconic ones on the planet. Microsoft’s Windows Phone 7 may not have much traction, but it’s clever and available on a bunch of handsets. Both companies are building and fighting.

4. “Fortunately, the law frowns on the accumulation of dubious patents for anti-competitive means — which means these deals are likely to draw regulatory scrutiny, and this patent bubble will pop.” I hope so! And if it does, Google doesn’t have a long-term problem here.

5. “Unless we act, consumers could face rising costs for Android devices — and fewer choices for their next phone.” I like cheap phones as much as the next gadget nerd. But I don’t have any fundamental problems with the idea of companies using patents to preserve a competitive edge and prevent the value of inventions from immediately dwindling. It’s when the patents aren’t really for inventions that we have a problem. And Google’s case would be a lot stronger if it demonstrated the bogosity of the patents it says are bogus.

As Paul Thurrott and others have pointed out, Android has gained so much mobile market share in so little time at least in part because Google gives it away to handset manufacturers that were used to paying companies such as Microsoft for software. Google can afford to give away a mobile operating system because it utterly dominates the search-engine advertising business. The company knows how to play hardball. And if it’s going to blog about all this–and I think it should–it would be smart for it to explain just what makes Microsoft and Apple’s actions unethical rather than just very, very aggressive.

[UPDATE: Google has amended the original blog post with a response to Microsoft's leaked Google e-mail. It's probably just me being dense, but I don't understand Google's brief explanation of why it chose not to join Microsoft's bid for the patents in question.]

 
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26 Comments For This Post

  1. ahow628 Says:

    First of all, let me start off by saying that Google picked the WRONG target with its rant. It should have been laying into Intellectual Ventures and the like, not Apple and MS. That being said, I have some issues with your analysis, Harry.

    1) "But the companies’ history of working together when it serves both their interests is just as long." Internet explorer on a Mac? Whose interest does that serve? (Ok, that one was a bit tongue in cheek)

    2) "Google has vast quantities of patents itself, so I presume it’s not opposed to patents, period." That is quite the leap to say, 'Google has patents, so Google must like patents.' If you want to survive in the tech world, you have play ball. Until the rules change, the only way to play ball is to either have enough money to withstand litigation or pay licenses, or you can hold your own patents as a "defensive" weapon. Yes, I used the words defensive and weapon.

    3) "Both companies are building and fighting." Apple? Absolutely. They would probably make MORE money if patents went away because they could cull their lawyer population immensely. MS? Not so much. They have been stagnating for about a decade and now they are riding Apple's coattails in this patent purchase and riding Android's coattails by getting about $15 per Android device sold. Estimates are saying MS is getting 3x revenue from Android as WP7.

    4) Exactly.

    5) "But I don’t have any fundamental problems with the idea of companies using patents to preserve a competitive edge and prevent the value of inventions from immediately dwindling." But that isn't what patents are for! They are to be an incentive to an inventor to make that invention, not prevent competition. They are not patenting the cotton gin here. They are patenting the idea of harvesting cotton.

  2. The_Heraclitus Says:

    The long and short of it is: algorithms should not be patentable …

  3. The_Heraclitus Says:

    "They are to be an incentive to an inventor to make that invention, not prevent competition. They are not patenting the cotton gin here. They are patenting the idea of harvesting cotton."

    Wow! Well said.

  4. Rivas Says:

    Google needs the patents for them and to help their partners defend against Microsoft and Apple. If they buy patents with Microsoft, then they cannot use those patents in a fight against Microsoft. Looks pretty simple to me.

  5. Tim F. Says:

    Patents are intended to incent inventors to progress innovation BY preventing competitors from copying them. (They are de-incentivized when their hardwork and investments can asily be copied and marginalized.) You can't just put "encourage invention" in opposition to "prevent competition" and say that one is not a part of patents.

  6. Tim F. Says:

    Harry, Google is laying bare their problem. They have a few choices: 1) outright oppose patents and disregard patenting their own true inventions while ignoring others as well, 2) work within the system and maybe even cooperate with other patent holders and obtain licenses to some patents (which doesn't fully mitigate their exposure to OTHER patents, or 3) acquire patents that they can begin wielding as weapons against non-licensors when they are attacked by patents. They wanted 3, couldn't get it, were unwilling to settle for 2, and ended up with 0.

    In essence, they are admitting that they are likely infringing key patents held by competitors. Rather than licensing some or all of them; they hope that they can gain ownership of some exclusive patents that they can equally wield as weapons to fight to a stalement of cross-licensing.

  7. ahow628 Says:

    This is exactly right. If Google and MS team up, MS can still shakedown HTC, Samsung, and others. If Google goes solo (and gets the patents), then it can at least have some muscle against MS.

  8. Bob W. Says:

    Well said Tim! Correct me if I'm wrong, but it was Google who made the first big bid on the Nortel Patents which they would have used as a weapon against MS, Apple, etc. In defense those companies formed a consortium to outbid them. They even invited Google to participate so none of the participants could use the patents against each other. Google declined because it could no longer use them as a weapon. I believe its the case that Android has infringed on patents, some bogus but some very valid. They hoped the Nortel patents would get them a free ride against the patents they have infringed, couldn't make it happen, and now they are wining.

  9. Gavin L Says:

    The article and comments are all interesting, but neglect to mention the end user or end loser. The concern we should all have – is that Microsoft and Apple’s collective action – firstly is anti-competitive and secondly will slow down if not stop research, development and innovation in mobile computing. It has already started the shift from technical innovation to “legal opinion based” cautious innovation.

    Ultimately – nobody will risk invention without massive amounts of legal reserves. Last of all we should not forget the context and shift happening in the market: Microsoft partnering with Nokia and Apple; Microsoft buying into Skype and Facebook. This all seems like a strategic plan to buy innovation and gang up on Google – the biggest threat to them. Surely Microsoft would have learnt a lesson after the Anti-trust inquiries? Maybe they have learnt the lesson and this is a clever way to disguise the real intent.

    I would be interested in the “consortium” of companies who bought these patents to disclose their agreements and agenda. In my opinion Microsoft and Apple’s actions show how desperate they are and that they have no faith in their own ability against their humiliating rival – Google (who the market is endorsing).

    For the last decade Microsoft has been reselling its bug fixes to us by forcing us to move forward every few years –“because it can”. They have had questionable innovation in their products if any and their success is largely due to their dominant position in the market. They are all about control and not about user interest.

    Apple on the other hand has been creative – not necessarily innovative. The fact that both Apple and Microsoft have had to buy all these patents – makes me question their claims to innovation. Apple claims to be the pioneer – why did they not invent these “things” and apply for the patents themselves? Apple was the first to market with the iPod and iPad, but they were not the best on the market nor were they new concepts – they were just cool. I recently read that Apple has patented a form of a gesture – how ridiculous is this. Am I going to be infringing on a patent by moving my finger a certain way – or by being left handed. We are the losers in this "war".

  10. Paul Says:

    That may be so, but the main thing we need to remember is that Google never gives specifics in any of their claims – they just say that other companies are conspiring against them using bogus patents.

    It seems very bad form to admit that they may be in violation of patents. If Google believes that said patents are bogus, they need to identify them. After all if they are right, then there is no harm (they would get sued no matter what) and they would prevail. Of course they could be wrong and then it would be really bad.

    The short end of things is that they need to be specific with their claims – if they don't, how can we be sure that they aren't just crying sour grapes that and demanding that they be given free reign? I agree that Google may be in a tough spot, but you said it yourself, they are unwilling to work with the system. Of course we don't have any specifics and when someone shouts "conspiracy" the first thing I ask for is evidence. And saying "unfair" doesn't cut it.

  11. Brewgoat Says:

    I understand their reasoning for not joining in the bidding for the patents. If they partnered with Microsoft for the patents, they would have had to automatically pay Microsoft their share of the perceived value of the patents for each device sold.

    Think of it this way. You and a friend buy a cabin in the woods or at the beach. This home cost you $500,000, your half. Your friend then starts letting people use the house all the time and you lose enjoyment of the home. You still have to pay your half of the mortgage, utility bills, maintenance, etc but you would not get the use of it. You would demand that either your friend start making these people pay or you want him to buy your half out.

    If Google bought the patents with Microsoft they would have tacitly been implying the patents were applicable to their technology and had some value. Buy taking Microsoft on as a partner they would have been putting themselves in a position of having to charge a license fee to fulfill their business obligation to Microsoft as their patent partner.

    It was brilliant on Microsofts part. Nearly no way they could lose this in a public fight because most people would not realize the implications.

  12. Tim F. Says:

    Agree entirely — I think they are looking bad. It's amazing that a PR campaign that could have worked so well for them with tons of support from the community has almost entirely blown up in their face.

  13. Tim F. Says:

    People keep confusing two different patent auctions: Google was NOT invited to join Rockstar in the Nortel bidding. Microsoft invited them to bid on the Novell patents. Nonetheless, Google bid as high as $4 billion (with Intel's help) on the Nortel patents, far worse than the stalking horse bid of $900 million — they have zero right to complain about the inflation of patent values when they are the primary company desperate to acquire them and highly willing to throw cash around. Secondly, Intel did join Google on the bidding thinking they were the ones in it to win it. And certainly if Google is afraid of being ganged up on, there's nothing stopping them from asking Motorola, HTC, Samsung, LG, and innumerable other Android partners to participate with them.

  14. Rndmacts Says:

    Something is missing in both the authors account and Google's memories,Google tried to low ball bid for the Nortel patents when Nortel was considering the final sale, Google made an offer of 900K for these patents but there was such an outcry about one American company buy this IP especially when 90% of the patents were of no interest to Google's business.

    There was also a vested interest by the Canadian government as a lot of investors and ex employees lost substantially when Nortel tanked. That is why the auction was insisted upon and not a straight sale to Google for a lowball bid. There was going to be a regulatory review of the sale so the idea of a consortium made the most sense in order to get approval for the sale. My point being Google wanted these patents, but only if they could be the sole owner, then they would have the clout to interfere in many areas not only smartphones but the Internet's infrastructure, satellite communications and even advanced storage technologies.

    Even without the Nortel patents, Microsoft and Apple and others all had claims on how Android operated, and as Google has publicly stated before they didn't care about other companies patent claims. The statement mad that for the last decade, Microsoft has been selling its bug fixes by forcing us to move forward every few years, Microsoft has never charged for bug fixes, in fact it maintains a schedule for updating to repair these bugs as they are found. Every company upgrades their product on a regular basis, adding new features, streamlining old ones and in the case of OS's ensuring that they run on the latest hardware. Linux does this, Apple does this and so does Microsoft, if they didn't then they would stagnate and be out of business. Microsoft and Apple have been in the OS field for many years, Google is the new comer so it stands to reason that some of the procedures it is using belong to one of the two of them, look there is nothing revolutionary or unique in the Android interface, it is bits and pieces of previously shown
    Apple and Microsoft OS's dating back to the Newton and Win/Dos days.

  15. Muk Says:

    So the latest job figures for the US have just come in – 117000 new jobs created, highest since April..could this be jobs in the legal profession? or in the trade patents department?

  16. Tim F. Says:

    But also consider you want a PR campaign where you paint yourself as picked on by a cabal of anti-competitive competitors, as a protector of your partners by actually building a patent warchest… and yet you actually walked away from doing at least something to show that to be true or surmountable.

  17. NeilT Says:

    In the old mobile phone market, participating companies would swap patent rights and avoid all the litigation. Apple joined the mobile market and promptly started flinging lawsuits everywhere. There went the neighborhood. Android is effectively the linux to Apple's Windows: trying to open up the lock-in business models. All these patent battles and lawsuits do is distract effort away from the innovation competition. I think that's all the google lawyer is tying to say.

  18. JohnFen Says:

    Microsoft gets $15 per android device?

    Hrm. Guess I’m not buying an Android after all.

  19. Tim F. Says:

    One can argue that. It's a farcry from the blanket statement of patents are not meant to prevent competition — it depends on how you define competition, but it is very much a part of what patents are intended to do.

  20. Tim F. Says:

    Microsoft is believed to get $5 per Android device from HTC (this is somewhat of a guess/rumor). It also gets licenses from several small Android developers which do not amount to much. They are also rumored to be trying to get as much as $15 from Samsung per device. The large discrepancy between HTC and Samsung is largely a factor of HTCs already close relationship with Microsoft and continued development of WM7 devices. So not quite.

    Meanwhile there is news today that Apple does want to settle with HTC, knowing that they can probably get a per device license for all HTC devices sold worldwide while any positive legal conclusion would only apply to devices sold in countries with strong IP legislation.

  21. Tim F. Says:

    Oh, I also forgot about the S3 Graphics suit against Apple as well. But the claims against the iPhone and iPod touch were dismissed so it only affects Apple's Macs so we can leave them in the bucket of "innumerable non-mobile patent suits."

  22. The_Heraclitus Says:

    Yes, one can argue that algorithms were never meant to be patentable, and one would be right.

  23. Tim F. Says:

    …and ignoring that we've had more than 10 years and 100s of patent suits legally affirm software patents all the way to the Supreme Court.

    (The 2nd Amendment was meant to allow standing militias to protect from foreign invasion too; original intentions are merely that.)

  24. Tara Snow Says:

    You know sometimes when I've been wronged by a company and I feel like no matter what I say to them they aren't going to fix my problem, I really want to vent, so I get on the internet (on my ipad or android usually) and vent.

  25. Video Production Says:

    I am not convinced that the number of handsets sold is a good measure of how “successful” Android is when considering how mass penetration synergizes with Google’s business models. My sense is that Google most benefits from volume so I would argue that Android is ‘doing very well’ when compared to iOS.

    I would also argue that, for the general population of Android users, having to purchase a new phone to access newer iterations of the OS does not negatively affect their perception of the OS when compared to its competitors. I would say that most people feel that it is normal that hardware upgrades and software upgrades come at the same time.

    There are, of course, always power users who constantly flash new roms that create exceptions but these are the minority.

  26. Pat Says:

    Original intentions is how laws are judged. Otherwise there would be no stable law…