Patent Battles: Are Property Rights Anti-Competitive?

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Microsoft and Apple have been long-time rivals but the claim is now being made that they are collaborating to defeat Google and the Android operating system.

It’s clear that Google’s Android is successful. For example, over 550,000 Android devices are activated daily. This success has led to “a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents,” Google’s David Drummond, the company’s senior vice president and chief legal officer, claimed in a recent company blog post.

“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,” Drummond added, according to a report carried on TechZone360.

The alliance of new-found allies is trying to purchase Novell’s older patents, particularly Microsoft and Apple. They don’t want Google to get the patents. They are also trying to get $15 licensing fees for each device run on the Android OS.

“Patents were meant to encourage innovation, but lately they are being used as a weapon to stop it,” Drummond claimed in the blog post. “They want to make it harder for manufacturers to sell Android devices. Instead of competing by building new features or devices, they are fighting through litigation.”

“The winning $4.5 billion for Nortel’s patent portfolio was nearly five times larger than the pre-auction estimate of $1 billion,” Drummond added. “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.”

He noted that the U.S. Department of Justice (DOJ) ordered Microsoft to sell patents it purchased and the winning group – Microsoft, Oracle, Apple, and EMC – is required to provide a license to the open-source community.

But not everyone buys into his arguments. Scott Cleland, president of Precursor LLC, a consulting firm whose clients include those who compete against Google, argued that “no other Fortune 500 company has ever been more hostile to others’ property rights than Google,” according to a report from Forbes. Cleland also claims Google is “the least open of open source mobile platforms,” citing a study by VisionMobile. And the Federal Trade Commission, now investigating Google for antitrust issues, “is unlikely to fall for Google’s ploy to shift antitrust enforcement attention away from Google and onto Apple and Microsoft,” Cleland said.

“While Google may have been successful in getting FTC approval of its AdMob acquisition by spuriously charging that Apple was the real anti-competitive threat to mobile advertising, despite the FTC’s ‘serious antitrust concerns’ about the transaction, Google’s latest scheme is unlikely to work again,” Cleland alleged in the Forbes article. “The FTC understands the old adage, ‘fool me once shame on you, fool me twice shame on me.’”

Cleland said Google needs to be able to prove in a court that thousands of patents it may be infringing are “bogus.”

“What is really ‘bogus’… is Google’s political argument that the DOJ should somehow become Constitutional Convention, Congress, USPTO and Federal Court all rolled into one in order to grant Google an effective pardon for its widespread infringement of patents –under some novel self-serving interpretation of antitrust law,” Cleland said. “Common sense tells us free markets cannot exist without enforceable property rights, so suing to protect one’s property rights in court is pro-competitive, while serially infringing competitors’ property rights – like Google does – is anti-competitive.”

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Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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