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8/4/2014
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Microsoft vs. Samsung, Explained

Microsoft claims Samsung is trying to renege on its obligation to pay patent licensing fees. Could the billions Microsoft earns from Android-related patents be at stake?

5 Inexpensive Smartphones: No Perfect Choice
5 Inexpensive Smartphones: No Perfect Choice
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Microsoft filed a lawsuit late last week against Samsung, alleging the South Korean electronics giant has refused to pay interest on late patent royalty payments and threatened to withhold future payments.

The royalties are tied a three-year-old cross-licensing agreement that calls for Samsung to pay Microsoft an undisclosed fee for every Android smartphone or tablet that Samsung sells. Though Android is a Google offering, Microsoft claims a wide range of patents related to the OS and has signed licensing agreements with many Android device makers.

In the lawsuit, Microsoft alleges that Samsung not only delayed royalty payments that were due last fall, but also refused to pay interest after finally remitting the late payments. Microsoft further claims that Samsung considers Microsoft's acquisition of Nokia's device business to be a breach of contract.

[Microsoft vows to fight ruling that it must release emails in foreign data center. Read Microsoft Privacy Case: What's At Stake?]

According to Microsoft, Samsung has tried to use the alleged contractual violation as a justification to cease payments. Samsung has also purportedly asked Korean authorities to eliminate the company's obligation to pay future fees. Microsoft claims that if Korean regulators attempt such a move, it would not pass legal muster. Samsung, for its part, hasn't said much, other than that it is looking into Microsoft's complaints.

In a blog post, Microsoft corporate VP and deputy general counsel David Howard alternated between diplomatic language and more pointed accusations. He took pains, for example, to paint the lawsuit as an almost routine disagreement between large companies.

"We don't take lightly filing a legal action, especially against a company with which we've enjoyed a long and productive partnership. Unfortunately, even partners sometimes disagree," he wrote. Elsewhere, he emphasized that Microsoft "values and respects" its partnership with Samsung and expects it to continue.

"We are simply asking the court to settle our disagreement, and we are confident the contract will be enforced," he added.

Nevertheless, Howard implied Samsung wants to stop making payments simply because it sells substantially more devices than it did three years ago and is presumably unhappy that its royalty obligations grew alongside its market share. "Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much," Howard wrote.

He also dismissed Samsung's claim that Microsoft breached its contract. He said Samsung used Microsoft's acquisition of Nokia's device business as an "excuse," adding, "Curiously, Samsung did not ask the court to decide whether the Nokia acquisition invalidated its contract with Microsoft, likely because it knew its position was meritless."

As is typical in the secretive world of patent agreements, many of the dispute's particulars remain unknown. Microsoft's lawsuit includes many redacted passages, for example, and does not make clear how much money it believes Samsung owes. Microsoft is believed to earn billions of dollars per year from its licensing agreements with Android device makers. Though Howard waved off Samsung's breach-of-contract claims, Microsoft is no doubt mindful that a negative ruling could establish a precedent that would allow other Android device makers to challenge these agreements.

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Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio

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Steve__S
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Steve__S,
User Rank: Strategist
8/11/2014 | 9:07:52 AM
Re: MS has patents that apply to Android?
"Hey Steve -- since you called me an idiot -- educate me. "

I didn't specifically call you an idiot.  My exact words were:

"People like @rradina attempt to oversimplify the details of a specific patent to make it seem so rudimentary that it applies to all devices.  That's just not the case.  Just pick one at random and see for yourself.  As an example, take a look at US 20060101293 which is what @rradina apparently considers screen dimming.  Read through the details, then realize that @rradina is either an idiot or is someone who is purposely being deceptive in a lame attempt to make a point."

Just picking one example...  I provided you with an actual Microsoft patent number which describes a very specific method and implementation for power management of computer displays.  A simple Google search will reveal that other companies also hold patents relating to power management on computer displays.  You've attempted to distill that very technical patent down to "-  Automatically dimming the display based on need".  Do you realize that there are dozens of patents from numberous companies such as Apple, Intel, Sony, nVidia, etc. that have patents which also fall into your generic description?  For this reason, I stand by my claim that you are either an idiot because you don't understand what you are reading (assuming you even bothered to review actual patents), or you are purposely being deceptive by characterizing actual patents in such broad terms.  It would seem that you've self identified with the idiot characterization.  If the shoe fits...  
rradina
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rradina,
User Rank: Ninja
8/8/2014 | 11:32:46 PM
Re: MS has patents that apply to Android?
Why not figure out what patents Android uses that Microsoft holds before you get upset and blather on about how it's ridiculous.
rradina
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rradina,
User Rank: Ninja
8/8/2014 | 11:29:59 PM
Re: MS has patents that apply to Android?
Hey Steve -- since you called me an idiot -- educate me.  Terry claimed:

 

" If someone can make one of these crappy phones last more than a day on a charge, now then you are talking about a real patent."

 

Tell me about the patents such a device would have that would preclude someone else from doing similar things?
TerryB
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TerryB,
User Rank: Ninja
8/7/2014 | 1:15:20 PM
Re: MS has patents that apply to Android?
I hear you @Steve. I've obviously gone way too far wanting throw out the baby with the bath water. Just very frustrated with the current situation, as documented by Samsung paying Microsoft for Android use. If Samsung was paying Google, or even Sun/Oracle (from Android using java), then it would make sense. But you just don't equate MS and Android as a logical connection.

But if this doesn't stop, I don't know where it will all end. Litigating stupid patents sure isn't holding down prices on products, all that getting passed along to me and you in the end. And expecting our wonderful government to do anything about it is a pipe dream.

My Apple comment was meant to say I consider iPhone more a marketing success than a technical success. They created such a fever you just were not "cool" unless you had an iPhone. Well, at least until everyone's grandmother bought one too. :-)

Thanks for taking time to explain your thoughts.
Steve__S
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Steve__S,
User Rank: Strategist
8/6/2014 | 5:43:47 PM
Re: MS has patents that apply to Android?
@TerryB:

What I have found is that most people who complain about patents rarely understand the issues at hand.  Let's use @rradina's post as an example.  That post listed a number of very generic features.  Clearly, this individual is incapable of distinguishing a feature from a method of implementation.  There are also different types of patents such as design patents and utility patents.  Copyrighting software is almost meaningless as reverse engineering functionality is trivial.  Copyrighting simply prevents the actual same source code from being used.

Anyway, back to the point. People like @rradina attempt to oversimplify the details of a specific patent to make it seem so rudimentary that it applies to all devices.  That's just not the case.  Just pick one at random and see for yourself.  As an example, take a look at US 20060101293 which is what @rradina apparently considers screen dimming.  Read through the details, then realize that @rradina is either an idiot or is someone who is purposely being deceptive in a lame attempt to make a point.

As for patents that are obvious, I agree with you.  As I've stated, some patents should never be granted.  Of course, when challenged, most of these patents don't hold up in court.  Just because a patent is granted, doesn't mean it's the final word on protection.  Patent validity can and does get challenged all the time.  The system is far from perfect, but overall, it does work...  regardless of your personal opinion on the matter.

Finally, I'm not sure what your comment with Apple was about.  To your point, if companies were allowed to copy directly with impunity, that's exactly what many would do.  Take a look at behavior from companies like Samsung and Xiaomi and tell me how I'm wrong on that.
TerryB
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TerryB,
User Rank: Ninja
8/6/2014 | 10:21:59 AM
Re: MS has patents that apply to Android?
@Steve.  So you basically do same thing I do but you are an expert on patents and I'm not? You do understand the difference in copyright protection and patent protection, right? If I decided to commercialize the ERP system I've written for my company, it wouldn't be thru the patent system.

If you can't see the difference in Android and Windows, not much I can do to help you. You are entitled to your opinion that patents on obscure algorithmic implementations constitute a "product" that can have patent protection. I don't see it that way, period. The list of stuff @rradina named is a perfect example of what I'm talking about, obscure pieces that by themselves mean nothing.

If there was no patent protection on that stuff, just exactly how would another company reverse engineer that it existed and duplicate it? You are writing software for Company A and patent some algorithm you used. I'm working for Company B and independantly use same algorithm BECAUSE IT IS OBVIOUS to generate the needed function. Why in the heck should I have to pay you anything?

Now if I broke in to your office and stole it, that's a different story. If both products hit market, you have some competition to hold price down. If you get royalties because you got patent protection, or it suppresses the new product from entering market, then the consumer pays more.

You act like if Apple had no patents that everyone would be making iPhones. You think Apple is market leader because they have superior technology and the consumers recognize that thru diligent research?
Lorna Garey
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Lorna Garey,
User Rank: Author
8/6/2014 | 9:20:31 AM
Re: Win win
@SaneIT - Gotta give the lawyers something to do all day I guess. 
rradina
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rradina,
User Rank: Ninja
8/6/2014 | 9:10:23 AM
Re: MS has patents that apply to Android?
So a phone that employs power saving concepts such as:

-  Throttling the CPU frequency based on need

-  Automatically dimming the display based on need

-  Disabling hardware unless it's being used

-  Implementing an improved WiFi chipset that adheres to updated standards that allow devices in power save mode to remain connected

-  Using a bigger battery

So all of these represent patents that other device manufacturers cannot use without paying a royalty?

Is the question regarding how Windows overlaps with Android rhetorical?  If not, that means you don't know.  If you don't know, how can you form such strong opinions?

Software patents have purpose and like any tool, they can be used for good and bad.  If you are willing to consider moderation, the world is full of many wonderful colors.
Steve__S
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Steve__S,
User Rank: Strategist
8/6/2014 | 8:53:31 AM
Re: MS has patents that apply to Android?
@TerryB:

"Dude"...  your comment makes sweeping, nonsensical statements that mean nothing.  What does writing software for a living have to do with the validity of intellectual property?  I also have a long career of software development and managing technical teams.  So what?  

Further, your blanket statement which suggests Android does not copy Windows is extremely broad.  Are you aware of all of the intellectual property associated with both operating systems?  Have you performed this type of patent search?  Do you even have the legal background to understand what you are reading?  No?  Well then STFU and stop offering opinions on topics where you clearly don't have a clue.

As for gaming the system, sure, that happens.  While I would agree that there are some number of patents that should never be granted, the answer to the problem isn't to simply invalidate all forms of intellectual property protection.  As you mentioned, there are very legitimate items that deserve to be protected. The system may not be perfect, but it's better than not having any form of protection at all.  Again, if your hard work could very easily be copied or stolen, you'd change your tune.
SaneIT
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SaneIT,
User Rank: Ninja
8/6/2014 | 7:12:06 AM
Re: Win win
@Lorna Garey, I saw a map about a year ago with all the patents that companies own and who pays them to use those patents.  It was a nightmare so I'm not surprised that there are little tiffs now and then.  The recent past showed us how silly some of this was when Google bought Motorola for their patents but reports told us they didn't get what they thought they were getting and still had to pay the patent agreement fees to companies they were trying to avoid.
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