Microsoft's Message to Its Partners

by Chris Collier January 27 2011, 16:40

From September 2009 to September 2010, Google’s share of the U.S. mobile phone OS market has risen a staggering 18.9 percent, going from 2.5 percent to 21.4 percent, while Microsoft has seen its share of the mobile OS market decline from 19 to 10 percent. Notably, the other major players in the U.S. mobile OS market either held their share, in the case of Apple and Palm, or saw a modest decline, in the case of Research in Motion. Clearly, the rise of Google’s open source Android OS represents a greater threat to Microsoft’s future in the mobile OS market than it does to other companies.

Given Microsoft’s dramatic loss of market share, several industry analysts have speculated that Microsoft’s lawsuit against Motorola, alleging that several of Motorola’s Android based phones violate Microsoft patents, is in direct response to the pummeling Microsoft has taken at the hands of Google. This speculation was heightened when open-source analyst Carlo Daffara commented via Twitter that two of the nine allegedly violated patents, specifically 5579517 and 5758352, were covered by the Open Invention Network (OIN).

OIN acquires patents and licenses them royalty free to entities that agree not to assert their own patent violation claims against Linux-based systems, such as Android. OIN members include Sony, Red Hat, IBM, TomTom, and—yes—Google. Consequently, an infringement claim with respect to patents 5579517 and 5758352 against Google would not likely result in just litigation with Google, but with the entire OIN community. Despite Microsoft’s vast resources, it has previously demonstrated a reluctance to embrace such a strategy. For example, in 2009 Microsoft alleged infringement of these same two patents when it brought action against TomTom, which was not an OIN member at the time. Subsequent to TomTom joining OIN shortly after Microsoft filed its claim, Microsoft and TomTom agreed to a settlement. Thus, it appears that Microsoft is waging a proxy suit against Motorola to avoid engaging OIN.

However, as Seth Weintraub noted, Microsoft’s current action against Motorola is more likely to illustrate for Samsung, HTC, and LG the consequences of abandoning Microsoft’s Windows Mobile platform. Since Motorola’s introduction of the Razr in 2004, which helped increase its share of the handheld market from 15 percent to 23 percent at the end of 2006, Motorola has struggled to remain profitable. While it has consistently performed well in the handheld market, Motorola has lacked competitiveness in the quickly expanding smartphone market. Consequently, Motorola response was to concentrate its efforts on making Android phones, to the exclusion of other platforms.

This view is furthered by Microsoft’s contradictory position regarding Apple’s recent lawsuit against HTC. Last spring Apple alleged that the user interface on HTC’s Android phones was in violation of twenty Apple patents. Shortly thereafter, Microsoft came to HTC’s defense by executing a licensing agreement, which, as explained by Microsoft’s press release, “provides broad coverage under Microsoft’s patent portfolio for HTC’s mobile phones running the Android mobile platform.” True, Microsoft may have simply seen the Apple-HTC lawsuit as an opportunity to exact royalties from HTC no matter which mobile platform HTC was using. However, in the context of Microsoft’s treatment of Motorola, Microsoft appears to be sending a clear signal to its partners: We’ll license you under our patent portfolio even if you use the Android platform; but if you leave Windows Phone 7 from your lineup, then litigation is forthcoming. Consequently, the current action against Motorola is more likely directed at maintaining its current partners than about attacking Google. 

Tags:

Technology

Comments are closed

Theme by Mads Kristensen

Invitation


We invite law professors, practitioners, and students to submit short articles for publication on this website. Simply email articles to the editors of the journal using the "Contact" form link above.   We also strongly encourage readers to post comments relating to a specific article or a topic covered by an article on the website. Just click on the "Comments" link located in the post footer below each article.

Recent Comments

Comment RSS

Disclaimer

This Journal is published by members of the Business Law Society at the University of Illinois College of Law. It is not a publication of the University of Illinois, and, therefore, the University of Illinois bears no responsibility for its content. Moreover, this Internet publication is prepared as an informational service only and should not be relied upon as legal advice. Although every attempt is made to ensure the information is accurate and timely, the information is presented "as is" and without warranties, either express or implied.