Intellectual Property Wars: An Outbreak of 'Nice' from Microsoft and Google

By Peter Bernstein February 10, 2012

TGIF (thank God it is Friday)! You could have knocked me over with a feather when, in surfing the net, I found two stories that indicate civility may reign in the global intellectual property wars. This leads to the observation that the word for today should be “NICE!”

First, there was yesterday’s posting by Dave Neal on the Inquirer, “Microsoft says it will play nice with patents.”   This was followed up today with a team effort on Forbes entitled, “Google promises Europeans to play nice while attacking Apple.”   What is going on? Pardon the pun but inquiring minds want to know.

Breaking it down

Microsoft

A nice item on Microsoft’s Legal and Corporate Affairs page is what caught Neal’s and my attention regarding Microsoft. I am providing it in its entirety because paraphrasing would not do it justice. 

“Like other leading high-tech firms, Microsoft regularly contributes to the development of industry standards. Industry standards are vitally important to the development of the Internet and to interoperability among mobile devices and other computers. The international standards system works well because firms that contribute to standards promise to make their essential patents available to others on fair, reasonable and nondiscriminatory terms. Consumers and the entire industry will suffer if, in disregard of this promise, firms seek to block others from shipping products on the basis of such standard essential patents.

Microsoft’s approach is straight-forward:

  • Microsoft will always adhere to the promises it has made to standards organizations to make its standard essential patents available on fair, reasonable and nondiscriminatory terms.
  • This means that Microsoft will not seek an injunction or exclusion order against any firm on the basis of those essential patents.
  • This also means that Microsoft will make those essential patents available for license to other firms without requiring that those firms license their patents back to Microsoft, except for any patents they have that are essential to the same industry standard.
  • Microsoft will not transfer those standard essential patents to any other firm unless that firm agrees to adhere to the points outlined above.”

The key phrase is “available on fair, reasonable and nondiscriminatory terms.” Believe it or not this has a term of art acronym, FRAND. For those unfamiliar with the term, as Neal points out, this means that Microsoft says it will make essential patents available without requiring anyone license them back. One can only hope this olive branch becomes true in its execution.

Google

For obvious reasons, Google has calmed down its victory lap celebration of the recent German court ruling granted soon-to-be Google subsidiary Motorola Mobility. This, in case you missed it, was where Motorola not only won a permanent ban on a key element of Apple’s iCloud services, push email, but also had the court agree that Apple stop selling iPhone4 and 3GS phones from its German online store because of patent infringement. This one is under appeal.

Again FRAND is at issue. Where being nice comes in to play is that Google wants not just German but all EU regulators to understand it will license Motorola patents under FRAND terms. As this article points out, however, saying you will support FRAND and doing so are two different things. Motorola, in regard to its requests for licensing a single wireless patent involving Apple, is hardly being FRANDly. Google is insisting to EU regulators it will abide by FRAND principles. The timing revolves around the EC vote to approve its acquisition of Motorola which is scheduled for a decision on February 13. Saying it will be nice in and use the Motorola patent portfolio only as a defensive weapon is some added grease to smooth the vote.

The plot thickens

Where all of this gets tricky is that not only is the Google acquisition of Motorola in play, there is also the minor inconvenience that last year a group that included Research in Motion (RIM), Sony, Ericsson, Apple and Microsoft acquired for $4.5 billion the 6,000 patents of defunct Canadian telecom vendor Nortel.   (In fact, put “Nortel Patents” into the TechZone360.com search engine and you will be impressed by how much interests this has generated).

Let’s get real for a moment. Altruism has never been a hallmark of any of the players in the wireless business. After all, along with all of the above, Samsung, HTC and virtually everyone else in this space are in courts and before regulators around the world suing or being sued by all or some of the above. It should also be remembered that what is a stake here is non-trivial. It impacts billions of dollars, stock prices and executive careers. 

I like to remember what one of my elementary school teachers told me, “If you can’t be good be NICE!”    So TGIF and have a NICE weekend.

  

 


Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest and best known brands, and has served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.

Edited by Rich Steeves
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