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HTC Is Paying Microsoft $5 For Every Android Phone

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  • Software Patents. (Score:5, Insightful)

    by bbqsrc (1441981) on Saturday May 28, 2011 @08:28AM (#36272466) Homepage
    Software patents need to be abolished internationally, it's that simple.
    • by mmcuh (1088773)
      Indeed. As do all other sorts of patents as well.
    • by JAlexoi (1085785)
      They should, but here we see an absolute abuse of one country system to impose it worldwide. I don't care if the Americans pay extra $5 for HTC phones it's an American law, as long as I don't pay for a patent that is not valid where I live!
      That is why I don't bother paying for MS licenses, I already paid for them with illegal taxes.
    • by westlake (615356)
      Here:

      Software patents need to be abolished internationally, it's that simple.

      and below:

      I guess the side effect which will be seen as beneficial to some is that over the coming century as more and more of the "real world" moves into structures in cyberspace all property will essentially be communal property.

      I wouldn't count on any of this happening.

      The Entropia Universe entered the Guinness World Records Book in both 2004 and 2008 for the most expensive virtual world objects ever sold, and in 2009, a virtual space station, a popular destination, sold for $330,000. This was then eclipsed in November 2010 when a player sold a virtual resort on Planet Calypso for $635,000; this property was sold in chunks, with the largest sold for $335,000

      Entropia Universe [wikipedia.org]

      There are, I suspect, more people who are comfortable with the imperfections and contractions of the commercial, competitive - secular - world than with any communal ideal of socialist perfection.

      More who would choose to carve out some territory in cyberspace that was uniquely their own: Companies Explore Private Virtual Worlds [pcworld.com]

    • People keep asking where the "Microsoft tax" is. This is yet one more example, which those same people will ignore.

    • Re:Software Patents. (Score:5, Informative)

      by Thoreauly Nuts (1701246) on Saturday May 28, 2011 @12:31PM (#36273970)

      "Knowledge Sir, should be free to all." ----Harcourt Fenton Mudd

      (in response to an accusation by James T. Kirk that he didn't pay royalties on patents.)

      Star Trek Original Series Season 2 Episode 8 - "I, Mudd" (1967)
      Time of quote in Episode: 13:37

      Can I FINALLY get my nerd card now?

    • Re:Software Patents. (Score:4, Interesting)

      by Yvanhoe (564877) on Saturday May 28, 2011 @03:26PM (#36275160) Journal
      The problem is that there is an IP bubble right now : some companies are valued several millions only because they own software patents. If you remove that value all of a sudden, you burst the bubble. No one will have the courage to do that.
  • Assuming this is correct, it's because HTC chose to sign the deal. That sounds to me as a spectator like a dumb business decision, but it was HTC's to make. I understand some companies paid $699 for a Linux license not long ago - does that mean we can't write a free desktop OS?

    • by tripleevenfall (1990004) on Saturday May 28, 2011 @08:36AM (#36272512)

      Precisely. HTC probably decided that it was worth $5 per handset to indemnify themselves from litigation.

      Whether the fee is paid to MSFT or gobbled up by patent lawyers seems like a morally neutral thing. It's not like one group is significantly less sleazy or sucks less scum than the other.

    • by Registered Coward v2 (447531) on Saturday May 28, 2011 @08:43AM (#36272578)

      Assuming this is correct, it's because HTC chose to sign the deal. That sounds to me as a spectator like a dumb business decision, but it was HTC's to make. I understand some companies paid $699 for a Linux license not long ago - does that mean we can't write a free desktop OS?

      Several points:

      With current patent law, free has nothing to do with weather or not you infringe on a software patent. Until the law is changed, a free OS could still be open to an infringement claim.

      It may not be a bad deal for HTC - it removes the threat of litigation which may make their phones more popular amongst carrier since they don't have to worry about being caught in a lawsuit, and if MS agreed to defend claims, based on MS' patents, against HTC arising from possible infringement it further protects HTC.

      No one knows if HTC cross licensed patents - it's possible HTC is also getting money from MS for HTC patens so the deal has a revenue impact but in reality no cost.

      • by nurb432 (527695) on Saturday May 28, 2011 @09:13AM (#36272742) Homepage Journal

        Until the law is changed, a free OS could still be open to an infringement claim.

        Even changes in the law wont stop *claims* and the hope the little guys just folds due to the cost of defending oneself.

        Just having some sort of reimbursement for winning if you are sued would go a long way to help out the little guys and stop a lot of the nonsense.

        • Of course you can change the law to that end. Limit litigation fees, slap a ceiling on lawyer fees and there you go. Outrageous litigation costs that allow big business to bully the small players due to their inability to pay for trial is pretty much an American specialty. Works way better in other countries.
      • by JAlexoi (1085785)
        It removes the threat of litigation from Microsoft only. As seen by the Apple vs HTC suit. And in general, I bet they did it to have easy access to WinMo and WP7.
    • by nurb432 (527695) on Saturday May 28, 2011 @08:55AM (#36272662) Homepage Journal

      So their choices were basically:

      1 - Stand up to their principles and spend millions in court fighting someone that could buy them outright. And risking injunctions that would prevent them from selling.

      2 - Agree to a pretty minor 'tax', that they can pass along to the consumer and be done with it. Most consumers wont even know its there and wont care even if they did.

      So, its a bad choice for them again why?

      • by TheGratefulNet (143330) on Saturday May 28, 2011 @10:21AM (#36273058)

        just pay the mafia what they ask. its just a tax; just a cost of doing business. right?

        RIGHT?

      • by isorox (205688)

        So their choices were basically:

        1 - Stand up to their principles and spend millions in court fighting someone that could buy them outright. And risking injunctions that would prevent them from selling.

        2 - Agree to a pretty minor 'tax', that they can pass along to the consumer and be done with it. Most consumers wont even know its there and wont care even if they did.

        So, its a bad choice for them again why?

        Sort of like a Fee, for Protection from things like "accidents"?

    • by Shadowmist (57488) on Saturday May 28, 2011 @10:07AM (#36273006)
      Important thing to remember, HTC phones aren't Android phones. They're "Android plus extras, and some of those extras come from Microsoft.
    • by jd2112 (1535857)

      Assuming this is correct, it's because HTC chose to sign the deal. That sounds to me as a spectator like a dumb business decision, but it was HTC's to make.

      actually it was probably a good business decision. The $5 per phone HTC pays is probably nothing compared to the cost of a lawsuit, even if they were too win. And if by some chance Windows Mobile 7 phones were to become popular it would put them in a bad position with Microsoft. (I suspect that part of the deal includes HTC supporting Windows Mpbile phones for a certian amount of time.)

    • it's because HTC chose to sign the deal

      I did not see any details on how this came about. If HTC approached Microsoft with the desire to enter into an agreement then it is due to HTC's decision. If Microsoft approached HTC and threatened them with massive litigation costs and threats of injunctions that would halt sales of their products in the United States then it is due to Microsoft threatening HTC and a business decision was made that ideologically is bad.

      And yes HTC could have fought back if Microsoft w

    • HTC was one of the most important Windows smartphone makers before they went Android so this is probably fuck off money they are paying MS. As in "please take this money and fuck off without going over our past agreements with a fine tooth comb looking for reasons to sue us."

  • by leromarinvit (1462031) on Saturday May 28, 2011 @08:35AM (#36272508)

    In related news, they are making more on Android sales than on Windows Phone 7. [asymco.com]

  • not every phone (Score:4, Informative)

    by Anonymous Coward on Saturday May 28, 2011 @08:41AM (#36272564)

    just the phones sold in the USA, Microsoft patents aren't valid anywhere else (95% of the globe)

    • by JAlexoi (1085785)
      It seems that they pay "per device manufactured". That is, without regional diversification.
    • by vegiVamp (518171)

      > Microsoft patents aren't valid anywhere else (95% of the globe)

      Agreed.

      > just the phones sold in the USA

      I dunno, where does it say that? It would be a very Microsoft thing to do, to negotiate a US based tax on all phones sold worldwide.

  • by Anonymous Coward

    As long as we have software patents. Look at the h264/Theora/WebM fiasco. Also the font hinting patents that are expiring that caused Linux to have difficulty with fonts, and then there was GIFs until 2004.

    As future operating systems from Apple/Microsoft get ever more complex, Open sources operating systems will have to wait decades to get the good features. That's why Linux market share is so low due to so many patented goodies that are essential for modern computers.

    • by westlake (615356) on Saturday May 28, 2011 @12:39PM (#36274008)

      As long as we have software patents. Look at the h264/Theora/WebM fiasco.

      The H.264 licensors include global industrial giants like Mitsubishi. Companies that have been researching video technologies since the 1920s. Companies which manufacture damn near every piece of video hardware sold on the planet.

      Google can deliver a slice of the web and the mobile market --- a generous slice, to be sure, but still only a slice. It has no significant presence elsewhere in video. It can't stop or slow development of a codec like HEVC/H.265 which is going to look very good to Netflix and has the potential for strong sales elsewhere.

      The real reason why open source often lags isn't patents or licensing.

      It is experience, organization, money. manpower. resources, markets and marketing,

      • by Dahamma (304068)

        The real reason why open source often lags isn't patents or licensing.

        It is experience, organization, money. manpower. resources, markets and marketing,

        IMO figuring out what the *market* wants is the biggest issue. In general, corporate software developers build what their customers want, and open source developers build what they want. And why wouldn't this be the case? I'd hate to work for free on a project I didn't like or want to use. But that doesn't always translate to something suited to the aver

  • This has been known (Score:2, Interesting)

    by Eirenarch (1099517)

    This has been known for some time now. The only new thing is the estimate how much they make. HTC signed the deal when Apple sued them. I guess it is not stupid decision to pay instead of get sued by both Apple and MS at the same time. They chose to fight Apple and make peace with MS.

    While I agree that software patents are bad for everyone that makes real products (including Apple and MS) I am disgusted by the fact that Google act as if patents somehow don't apply to them. It is one thing to fight for a cha

    • Any examples of how Google acts as if patents don't apply to them? You made the statement as if it's self-evident.

  • Protection (Score:4, Interesting)

    by amiga3D (567632) on Saturday May 28, 2011 @08:54AM (#36272654)

    It's a protection racket, plain and simple. "Pay us or we'll break your legs and burn down your store"...well in this case it's "we will sue you into bankruptcy." Of course since lawyers are involved it's legal.

    • Yeah, pretty much... you pay them some money so they're not so desperate as to rob you of your livelihood. If we give them enough resources, they should be able to afford to live comfortably and quietly innovate to themselves in Redmond without getting in anyone's way. At least that's how the theory goes :-P

  • by voss (52565) on Saturday May 28, 2011 @08:55AM (#36272664)

    The Android version of Linux is so popular that Phone manufacturers prefer to pay microsoft to not have to use windows phone.

    Microsoft does have an interesting strategy btw: Microsoft does not seem to want to kill linux anymore because they can make
    easier money just with licensing fees from companies with deep pockets.

    It also says something that the phone makers would rather pay the $5-10 per phone than use windows phone 7.

     

    • by airfoobar (1853132) on Saturday May 28, 2011 @09:24AM (#36272812)
      An "interesting strategy", huh? The problem is that HTC and others aren't going to let this dig into their own pockets -- we as the consumers have to pay HTC an extra $5-10 per phone so they can give it to Microsoft. And what did Microsoft do to deserve that money? It's because they have a bunch of useful patents such as:

      - Give people easy ways to navigate through information provided by their device apps via a separate control window with tabs;
      - Enable display of a webpage's content before the background image is received, allowing users to interact with the page faster;
      - Allow apps to superimpose download status on top of the downloading content;
      - Permit users to easily select text in a document and adjust that selection; and
      - Provide users the ability to annotate text without changing the underlying document.

      This is the Microsoft tax all over again, in the form of a multi-billion patent troll. Others can't innovate around Microsoft because Microsoft is the anti-competitive assclown it's always been. Regulators and legislators take notice!! Get rid of software patents already.

      • by Kalriath (849904)

        - Permit users to easily select text in a document and adjust that selection; and

        Er, I'm still sure Android doesn't infringe on that one.

  • by Anonymous Coward on Saturday May 28, 2011 @09:00AM (#36272684)

    Don't worry, a few years after Ballmer is gone Microsoft will be purchased by Cisco or Oracle. TFA is about typical actions often taken by companies that have nothing more to sell, or no longer have any creative spark.

    Years ago Bill Gates said he wished Microsoft could have a near-death experience like Apple did because of its rejuvenating qualities. Well, It's going to get one but, unlike Apple, it won't pull out of the dive.

  • by w13rdo (1639415) on Saturday May 28, 2011 @09:16AM (#36272764) Homepage
    Microsoft, now relegated to the position of worlds most prestigious patent troll.
  • by MrKaos (858439) on Saturday May 28, 2011 @09:17AM (#36272768) Journal
    Don't forget beating up on microsoft is like kicking a puppy. Open Source software has won in the server space and so criticising microsoft is like beating up a puppy. Poor little harmless microsoft wouldn't hurt mean old open source software. Everyone who has a copy of linux should pay microsoft something for not using a microsoft operating system. microsoft have never done anything bad in the past and anyone who says so is just making up stories to make microsoft look bad.

    We should look into making a real microsoft tax that people pay to make sure we get the benefit of microsoft in our lives, everywhere. After all microsoft invented logic and the concept of on or off being a 1 or a 0 so go and pay microsoft 10cents for every light switch in your house because it's the right thing to do and because they *need* you money more than you do. Microsoft Everything for Everyone Forever

    We don't need anything else because microsoft is like the standard on computers. Poor microsoft and those mean open source thieves who steal microsofts ideas by volunteering their time to writing freed software. If they had any morals they would pay microsoft to volunteer to write open source software because microsoft invented software and the idea of software so we should pay them.

    Now get of their lawn, because only they can shit on it.

  • Back then they payed M$ per system for windows even if you go a system with OS/2 or BEOS or dos or NO os on it.
  • by JAlexoi (1085785) on Saturday May 28, 2011 @10:07AM (#36273002) Homepage
    And they wonder why I hate MS... These assholes are abusing the faulty US patent system to effectively enable it worldwide. Why are they paying $5 for EVERY phone, even those that are not destined for US market.
    HTC is NOT an American company. The phones are not manufactured in US. I don't live in US. Why does the US patent law apply to me when I buy an HTC Android phone?!?!?!?!?!
    • by amiga3D (567632)

      Pay up bitch!

      MS IP TROLL

    • I wonder how much of this sort of behaviour must happen before the tide starts turning against the patenting system.

      It's unlikely that US lawmakers will stop supporting it, as it is an important tool for ensuring US income. But perhaps other parts of the world eventually decide it's no longer worth putting up with.

      The US is an important part of the world, and always will be, but there are now several centres of the modern world (the post war era is long gone), and at some point other nations might decide t

  • by amiga3D (567632) on Saturday May 28, 2011 @10:32AM (#36273104)

    If android infringes on Microsofts IP I can't help but wonder why WP7 sucks so hard. It seems that they are saying that Google took Microsofts idea and implemented it better.

    • It seems that they are saying that Google took Microsofts idea and implemented it better.

      On top of that, Microsoft needs to have a major developer purge because they must have IP leaks. Android was developed and released before WP7. Or perhaps Google has their own black ops men who stare at goats using paranormal techniques to suck the IP out of Microsoft remotely.

      • by cbhacking (979169)

        You guys do know that Microsoft had a mobile phone OS a *LONG* time before WP7, right? As in, before iOS, much less Android, even existed? I'm sure they've filed far more more patents in this space than you realize.

        The validity of those patents is something for the courts to decide, but with the laws as they are now, I'd actually be shocked if MS didn't have a ton of patents they can wave at Android.

    • by nstlgc (945418)
      WP7 sucks so hard? I assume you're not actually using a WP7 phone?
  • by ArcRiley (737114) <arcriley@ubuntu.com> on Saturday May 28, 2011 @10:45AM (#36273190)

    I currently own an HTC phone, and due to the bootloader being locked down I swore I'd never buy another. The recent announcement about future phones bootloaders being unlocked actually had me looking at the phones they'll have available in a few months. We're already paying roughly $10 a phone for all the media codec licenses; MP3, h.264, etc (none of which I actually use on my current phone), but paying Microsoft an extra $5 feels dirty.

    • We're already paying roughly $10 a phone for all the media codec licenses; MP3, h.264, etc (none of which I actually use on my current phone), but paying Microsoft an extra $5 feels dirty.

      It should feel dirty, even though you are not using them at least you did receive a usable codec for your media licensing fee, you wont get jack from Microsoft for the $5 fee.

  • I think this is probably one place Stallman would be saying "I told you so" with no great enthusiasm and one place where Adam Smith finds himself with an all mighty hard-on and smug self satisfied grin that will make your skin crawl now that Ole Shylock has his pound of flesh and lo, without a drop of blood being spilled.

    • by gtall (79522)

      You do not understand Adam Smith, he believed in freedom of entry and exit to markets. Patents, and in particular software patents, are anathema to free entry and exit.

  • My understanding of this situation is that Apple and Microsoft both hold a lot of multitouch IP and went around filing suit against all of the Android phone manufacturers. Microsoft believes that their IP is superior to that of Apple's and offered a low-cost licensing program that included indemnity against any lawsuits by Apple - that is, in HTC's case against Apple, in exchange for the licensing agreement, Microsoft is picking up the tab for the legal bills and will cover any settlement costs incurred by

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