Jury Finds Google Guilty of Standards-Essential Patents Abuse Against MS 278
recoiledsnake writes "A federal jury in Seattle ordered Google to pay Microsoft $14.5 million in damages for breach of contract for failing to license at reasonable terms standard essential patents covering wireless and video technology used in the Xbox game console. Motorola had demanded Microsoft pay annual royalties of up to $4 billion for use of patents that are part of the H.264 video and 802.11 wireless standards, which are baked into Windows and the Xbox video game console. Microsoft said it was willing to pay royalties but not at the 2.25 percent of the product price that Motorola sought. We previously covered Motorola's exorbitant demands."
Microsoft is one to talk! (Score:2, Informative)
- Alcatel-Lucent, which won US$1.52 billion in a lawsuit which alleged that Microsoft had infringed its patents on playback of audio files. This ruling was overturned in a higher court.
- Apple Inc. (known as Apple Computer, Inc. at the time), which accused Microsoft in the late 1980s of copying the "look and feel" of the graphical user interface of Apple's operating systems. The courts ruled in favor of Microsoft in 1994. Another suit by Apple accused Microsoft, along with Intel and the San Francisco Canyon Company, in 1995 of knowingly stealing several thousand lines of QuickTime source code in an effort to improve the performance of Video for Windows. After a threat to withdraw support for Office for Mac, this lawsuit was ultimately settled in 1997. Apple agreed to make Internet Explorer the default browser over Netscape, and Microsoft agreed to continue developing Office and other software for the Mac for the next 5 years, purchase $150 million of non-voting Apple stock, and made a quiet payoff estimated to be in the US$500 million-$2 billion range.
- AOL, on behalf of its Netscape division. Netscape (as an independent company) also was involved in the United States v. Microsoft antitrust suit.
- Be Inc., which accused Microsoft of exclusionary and anticompetitive behavior intended to drive Be out of the market. Be even offered to license its Be Operating System (BeOS) for free to any PC vendors who would ship it pre-installed, but the vendors declined due to what Be believes were fears of pricing retaliation from Microsoft: by raising the price of Microsoft Windows for one particular PC vendor, Microsoft could price that vendor's PCs out of the market.
- Bristol Technology Inc., which accused Microsoft illegally withheld Windows source code and used its dominant position with Windows to move into other markets. A ruling later ordered Microsoft to pay $1 Million to Bristol Technologies (see also Windows Interface Source Environment).
- Caldera, Inc., which accused Microsoft of having modified Windows 3.1 so that it would not run on DR DOS 6.0 although there was no technical reason for it not to work. Some claim that Microsoft put encrypted code in five otherwise unrelated Microsoft programs in order to prevent the functioning of DR DOS in pre-releases (beta versions) of Windows 3.1. Microsoft settled out-of-court for an undisclosed sum.
- Opera, which accused Microsoft of intentionally making its MSN service incompatible with the Opera browser on several occasions. Sendo, which accused Microsoft of terminating their partnership so it could steal Sendo's technology to use in Windows Smartphone 2002.
- Spyglass, which licensed its browser to Microsoft in return for a percentage of each sale; Microsoft turned the browser into Internet Explorer and bundled it with Windows, giving it away to gain market share but effectively destroying any chance of Spyglass making money from the deal they had signed with Microsoft; Spyglass sued for deception and won a $8 million settlement.
- Stac Electronics, which accused Microsoft of stealing its data compression code and using it in MS-DOS 6. Microsoft eventually lost the subsequent lawsuit and was ordered by a federal court to pay roughly $120 million in compensation.
- Sun Microsystems, which held Microsoft in violation of contract for including a modified version of Java in Microsoft Windows that provided Windows-specific extensions to Sun's Java language; Microsoft lost this decision in court and were forced to stop shipping their Windows-specific Java Virtual Machine. Microsoft eventually ceased to include any Java Virtual Machine in Windows, and Windows users who require a Java Virtual Machine need to download the software or otherwise acquire a copy from a source other than Microsoft.
- WordPerfect
- Zhongyi Electronic, which, having licensed two self-designed fonts to Microsoft for use only in Windows 95, filed suit
Re:Nice summary (Score:2, Informative)
Yes, even the court thought so.
They really were exorbitant for a Standards Essential Patent
Perhaps there should be a bit of summary. (Score:5, Informative)
Re:Nice summary (Score:4, Informative)
That would be a problem... ...if $4 billion weren't an initial offer that MS never bothered making a counter offer on.
Re:Google or Motorola? (Score:5, Informative)
Re:Nice summary (Score:5, Informative)
Re:Who cares (Score:5, Informative)
Motorola.
If you bought a company that did something prior to your buying it, are you evil?
In any case, Microsoft is the evil one in this case because, if you followed the case at all, you would have noticed that Motorola actually asked for a reasonable amount by industry standards but Microsoft didn't even attempt to negotiate and, instead, went straight to a court challenge arguing things that aren't quite even law.
Re:Nice summary (Score:4, Informative)
Re:Nice summary (Score:2, Informative)
Nope, another fail in understanding patents.
Consider the USB "standard". Someone invented that and instead of being a bitch and sitting on it they decided to partner with many companies to implement the technology on many products. Those companies willingly paid the licensing or royalty structure set in place to use the USB standard, largely because the fee structure was not ridiculous or anticompetitive in nature. Once everyone started using USB it BECAME a standard because if you came out with your own proprietary data port then largely that would fail, except for bitches like Apple that created their own proprietary device ports, but they still hook into a USB port anyways.
Now if the original USB patent holder wanted to be a dick they would increase their USB fee structure only for certain companies they didn't like, say that no Microsoft device could use USB without paying $50 a device while other companies would only pay $0.05. If a prick patent holder decides to do that, then of course Microsoft, or any company, would sue and claim that they are impeded from being offered fair access to a parent that has become an essential standard for all devices in the category.
If a company choose to monopolize and sit on a patent, it ill NEVER become a standard. For instance if Apple decided that Thunderbolt was the only technology to use at both ends of the cable, and decided none of their products would have USB, and decided to not cross license Thunderbolt with their competitors, then Thunderbolt would not be a Standards essential patent. Nobody would bother to sue Apple because nobody would bother with Thunderbolt.
Microsoft wanted to use video codecs and wireless standards that almost every other product has, but Motorola choose to extort Microsoft with an unfair fee schedule. Regardless of who is the target of the extortion, the courts are clearly no longer willing to tolerate this bullshit and have ruled favorably to prevent Motorola from succeeding in this.
BTW if any company feels Microsoft wronged them in the past for the same thing, now is an excellent time to re-open those cases. But the comment about FAT is stupid because you have no idea what the licensing fee was for FAT and whether Microsoft did anything unfair in OEM cross licensing. Considering that at one time Microsoft had 95+% of the consumer computer market, it only makes sense that OEMs wanted to support FAT file system at all costs because it was a HUGE market to ignore. Sometimes a company is in a position where they can charge whatever they want because the OEMs will throw money at them to get into the business. If the OEM's felt the fee was fair then I am sure for something like SD cards, the billions they made AFTER the agreement pails to the licensing fees paid.
Re:Who cares (Score:5, Informative)
Agreed. It's a pretty common tactic to open negotiations that way though. Patent holder says 2.25%, Licensee counteroffers 0.0001%, and eventually they arrive at a reasonable number. In this case though Microsoft didn't even make a counteroffer, they just went straight to the courts.
Re:Nice summary (Score:4, Informative)
And, the argument being made by Microsoft and Apple is that patents on rounded corner or bouncing when you slide for a page, or any number of other non-SEP patents should cost more than the patents for the standard and that when a patent is contributed to a standard under FRAND terms that holder loses there ability to enforce that patent via injunction when others choose not to even negotiate a royalty rate. The end result is no patents being contributed to standards, and ending the standard process entirely because the standards can't avoid patents.
Basically, Microsoft and Apple are killing the goose that lays the golden eggs because without standards the whole ecosystem on which their non-essential patents gain their value goes away.