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Apple and Microsoft to Google: Don't Be Evil about Patents

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Google can't catch a break this week: first it got hammered by the European Commission for streamlining its privacy policies, then it found out that Apple is worth more than Google and Microsoft combined.

Now its very motto -- "don't be evil" -- is being questioned in a public fight over patents.

Google is defending itself against charges of stifling innovation -- after complaining in August of being a victim of the same tactic from Apple and Microsoft.

Google Speaks Up

In a widely read August, 2011, blog post, Google's chief legal officer accused Apple, Microsoft, and others of using two types of patents -- those acquired from now-defunct Novell and those that competitors had created in-house via employee innovation -- to stifle the innovation of other companies, calling out Google's Android operating system as an example of stifled innovation.

"They want to make it harder for manufacturers to sell Android devices," wrote David Drummond, a Google senior vice president and its chief legal officer. "Instead of competing by building new features or devices, they are fighting through litigation. A smartphone might involve as many as 250,000 (largely questionable) patent claims, and our competitors want to impose a 'tax' for these dubious patents that makes Android devices more expensive for consumers."

Motorola: A Trove of Patents

Apparently for Google, though, joining in the litigation frenzy was too good to pass up. Less than two weeks after posting Drummond's blog entry, Google announced in mid-August that it was acquiring Motorola Mobility, a company that held a treasure trove of patents.

In our analysis of the acquisition announcement, we wondered if Google would rein in Motorola's litigations against Apple and others -- an odd choice since patents are at the heart of the Motorola purchase, but one that Drummond seemed to advocate.

We conjectured that this question alone would cause anti-trust regulators, who must approve the deal, to look long and hard at the Motorola Mobility acquisition and we haven't been disappointed as European Commission regulators, using its ETSI arm (European Telecommunications Standards Institute) to raise the question of fair, reasonable and non-discriminatory (FRAND) use of what are considered essential patents.

Within the past three days, Apple, Cisco and Microsoft have all weighed in, with letters to ETSI supporting more consistency in the FRAND approach -- and pointing fingers at Google via the proxy of Motorola Mobility.

"It is apparent that our industry suffers from a lack of consistent adherence to FRAND principles in the cellular standards arena," said Apple's head of intellectual property, Bruce Watrous, in a letter to the ETSI (The letter didn't mention the many lawsuits Apple has brought against Android device manufacturer -- and sometimes partner -- Samsung in Europe and the Pacific Rim.)

Cisco shares Apple's belief on the inconsistency of FRAND, as reiterated in a letter by Dan Lang, a Cisco deputy general counsel and vice-president of intellectual property. Apple Insider published Cisco's letter to the ETSI, obtained by Florian Mueller who operates the Fair and Open Source (FOSS) Patents blog. 

"Participants in the development of wireless air interface standards and other created in ETSI, or for which ETSI is a sponsoring organization (e.g., 3GPP), should grant licenses on terms that are consistent with the framework set out in Apple's letter," wrote Lang.

In other words, Lang is arguing, like Apple, that any company that provides a patent essential to the creation of a standard (an essential patent) has an obligation to license that patent at a nominal level to all other companies that also contributed patents to the standard. An example in streaming would be the H.264 codec or the new DASH standard ratified by MPEG in late 2011.

A Sudden Reversal

With Cisco and Apple asking for consistency from ETSI, attention has now turned to Google. Will Google seek to balance -- or, some would argue, dominate -- the playing field by acquiring patents that all other handset manufacturers must use to attach to mobile phone networks?

Google's clarification so far this week has been somewhat scattered, and observers like Mueller say it may intentionally be so, although no one's yet gone on to use the legal term obfuscation in regards to Google's recent statements.

While Google has not directly addressed the Apple and Cisco letters to ETSI, it has written a letter to the IEEE, an American standards body responsible for some of the Wi-Fi (802.11x) patents that Motorola Mobility holds. Still, according to Mueller, Google is side-stepping the question of FRAND for its entire patent base.

"I can't help but wonder why Google's letter relates to only Motorola Mobility's patents," wrote Mueller. "Why doesn't Google include all of its patents, regardless of whether it applied for them in its own name, intends to buy them through the acquisition of MMI, or bought or will buy them from other entities? This is a reasonable question to ask given that Apple's and Microsoft's statements (and Cisco's endorsement of Apple's letter to ETSI) are clearly not limited to any subset of their patent portfolios."

Interestingly, Google has no qualms about involving the U.S. Department of Justice when it feels the inclusion of political and judicial pressure might strengthen its hand.

"We're encouraged that the Department of Justice ... is looking into whether Microsoft and Apple acquired the Nortel patents for anti-competitive means," wrote Drummond in his original blog post. "We're also looking at other ways to reduce the anti-competitive threats against Android by strengthening our own patent portfolio."

Google Forced to Sell?

Now that the shoe's on the other foot, however, and Google is facing charges of anti-FRAND behavior, an update to Google's "When Patents Attack" blog post, written a few days after Drummond posted his original, may prove prophetic -- and offer a solution that ETSI and others can consider.

"Ultimately, the U.S. Department of Justice intervened, forcing Microsoft to sell the patents it bought and demanding that the winning group (Microsoft, Oracle, Apple, EMC) give a license to the open-source community," wrote Drummond, adding these were "changes the DoJ said were 'necessary to protect competition and innovation in the open source software community.' This only reaffirms our point: Our competitors are waging a patent war on Android and working together to keep us from getting patents that would help balance the scales."

One wonders if Drummond regrets writing that update, as it could very well be that Motorola Mobility's patent trove the key reason that Google is buying the company -- could wind up being sold off or licensed out to the open-source community. Either approach would help strengthen the grip of H.264 in the video market, which is clearly not a strategy that benefits Google's proprietary WebM approach to an online video codec.

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