Tuesday, October 26, 2010

Digital security company Gemalto sues Google, Samsung, Motorola and HTC over Android's application platform and development tools

Just three weeks after Microsoft announced its patent infringement action against Motorola, a leading maker of smartcard and other digital security technologies named Gemalto contributed another lawsuit to the crossfire of patents in which Android is caught.

With Apple's suit against HTC (started in March), Oracle's suit against Google (August) and this month's two suits, Android is now already facing four major patent infringement suits (not even counting cases that target multiple platforms, such as NTP's patent suit over wireless email). I assumed three weeks ago that "some further escalation is more likely than not to occur unless Google alters course."

While that prediction has already panned out pretty quickly, I think there's still more to come. The intervals between those Android suits have become shorter and shorter: five months, six weeks, three weeks. Since we're talking about a small sample from a statistical point of view, I wouldn't necessarily extrapolate that curve. But it sure looks like asserting patents against Android is now quite en vogue.

Gemalto sues upstream and downstream

While Apple and Microsoft filed suits against manufacturers of Android-based products, Oracle went after Google directly but has (not yet) sued any device makers. Gemalto goes after all of them at the same time by suing Google as well as the three leading manufacturers of Android phones: HTC, Samsung and Motorola (in order of second-quarter market share).

Multi-defendant patent suits happen all the time. The aforementioned NTP suit over wireless email also targets Google as well as some smartphone manufacturers, plus other companies (half a dozen in total). Paul Allen's Interval Licensing is simultaneously suing 11 major players.

If you hold a patent that reads on Android, you can sue at multiple levels. Google is the source of it all. You can also go after Google's downstream, where you find the manufacturers of Android-based devices. Theoretically, you could go even further downstream and sue importers, distributors, retailers, or users. Patent law gives you all of those choices.

Of course, you will ultimately determine what's the most efficient way, and you'll take existing or potential business relationships into account. For an example, most major smartphone vendors are probably Oracle database customers, and Microsoft's preferred way to do business with hardware companies is to sell them Windows OEM licenses as opposed to suing them over patents.

Gemalto is a reasonably sizable player with annual revenues of approximately $2 billion and 10,000 employees in 40 countries. No one will doubt that it can afford this fight. But it's obviously not an Apple, Microsoft or Oracle. Such powerful organizations can send out a warning to an entire market if they sue even one infringer. Suing four behemoths at once may be a strategy for Gemalto to demonstrate confidence in its case and to be taken seriously by everyone in the market.

Gemalto claims all Android application developers are infringers, all Android apps are infringing material

There's one item in Gemalto's complaint that struck me as very important:

25. Android Applications and the development of such applications using the Android SDK infringe one or more claims of the Patents-in-Suit.

Let's assume for the sake of the argument that Gemalto is right about this. This would mean that all Android application developers are infringers and that all Android apps are infringing (therefore, illegal) material.

Still assuming that Gemalto is right, they could theoretically sue any app developers they choose to go after. They could shut down any or all apps. They could put a big "closed due to patent infringement" sign in front of the Android Market app store.

The same would probably also be true should Dalvik infringe Oracle's Java patents. However, Oracle's complaint didn't make such an explicit claim against the entire Android app developer community. Oracle instead focused on Google's alleged wrongdoing.

I don't think it's likely that Gemalto will actually sue Android app developers, and if it did so, it would likely go after large players (where there's money to be made) rather than little guys. Gemalto has apparently chosen its four initial targets and will try to work out a license deal with Google and the manufacturers of Android-based devices. But just the notion that you have a holder of three Java-related patents who tells a court what I just quoted and analyzed is frightening.

Even though they probably won't be sued, Android application developers may find themselves severely affected by Gemalto's infringement action. Gemalto's complaints talks about the Android Market (Google's app store). Assuming that Gemalto wants a percentage of all revenues generated with Android apps, that would ultimately cost app developers money. Google might reduce the percentage it pays to developers. This could also result in higher app prices, which would reduce volume. Or we could see a combination of those effects.

It's not just Gemalto who might want a cut of the app business. There's also Oracle, whose intentions are unclear so far. And who knows how many other patent holders might come out of the woodwork later.

One might argue that this could happen to app developers on other platforms. However, it's pretty clear now that Android is under attack to a far greater extent than any other system. If someone wanted to cash in on an app market, Apple's App Store would be an even more obvious target than the Android Market. But for a variety of reasons that I'll analyze in more detail on another occasion, Google doesn't have the Android patent situation under control in any way. Apple and Microsoft generally appear to resolve such issues through license deals.

Google exposes an entire ecosystem -- including app developers -- to enormous risk. That's irresponsible.

If you'd like to be updated on patent issues affecting free software and open source, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Monday, October 25, 2010

Europe's friend FRAND

Last week I proposed a roadmap to a compromise for the revised European Interoperability Framework (EIFv2): free and open source software (FOSS) should meet FRAND (fair, reasonable and non-discriminatory) licensing half way. In my opinion, FRAND is a valid concept and suggestions that all FRAND is evil are unfounded.

There are still some who falsely claim that FOSS and FRAND are irreconcilable concepts. Those believe that the EU's love of open source is going to be greater than its belief in FRAND as a viable solution. They want to make FRAND a second-class citizen.

Meanwhile, my assessment that FOSS and FRAND can coexist has been supported by the official EUPL (EU Public License) community blog. The EUPL is the logical choice for open source projects of European public administrations, and it does not prevent the implementation and distribution of patented standards and inbound patent licensing.

Since the argument that only royalty-free standards are truly "open" is unfounded, there's no way that the EIFv2 could be adopted without fully recognizing FRAND licensing as a path to interoperability. FRAND has many friends in Europe, including a solid majority of the European Parliament and European Commission vice-president and Digital Agenda commissioner Neelie Kroes. Now is a good time to look at some of the EU's ringing endorsements of FRAND in connection with interoperability.

European Parliament resolution on the future of standardization

On Thursday, the European Parliament adopted a resolution on the future of standardization. Through that non-legislative resolution, the chamber indicates to the European Commission some of its positions ahead of the Commission's development of new standardization guidelines.

Item 66 of the resolution contains the following passage:

[The European Parliament] stresses the need to ensure that licences for any essential IPRs [intellectual property rights] contained in standards are provided on fair, reasonable and non-discriminatory [FRAND] conditions;

So the same decision-making body that voted down a proposal on software patents five years ago and supported open source on numerous occasions has made it clear that FRAND is a good framework for the commercial terms on which standards-related patents are licensed.

The European Parliament doesn't consider FRAND to run counter to the concept of open standards. In fact, items 7, 16 and 68 of the resolution call for "openness", and item 67 for "open, transparent and consensus-based development processes".

Draft guidelines on horizontal cooperation agreements

The Parliament's aforementioned resolution primarily relates to the Commission's draft guidelines on the applicability of EU cartel rules to horizontal cooperation agreements. A standard-setting organization supported by major industry players can be viewed as a cartel, and the Commission's guidelines are meant to facilitate the process of standards development by laying out how a standards body can steer clear of violating EU competition law.

The draft guidelines contain multiple endorsements of FRAND licensing. The most important one of them is found in item 277:

Where participation in standard-setting, as well as the procedure for adopting the standard in question, is unrestricted and transparent, standardisation agreements which set no obligation to comply with the standard and provide access to the standard on fair, reasonable and non-discriminatory terms do not restrict competition within the meaning of Article 101(1).

The above paragraph is very relevant to the EIFv2 debate. It makes it clear that FRAND terms are not anticompetitive, and even more importantly, the openness of a standard is defined by "unrestricted and transparent" participation and procedures as opposed to royalties.

Focus on transparency in Neelie Kroes address at OpenForum Europe 2010 Summit

In June I listened to Neelie Kroes's speech at the OpenForum Europe 2010 Summit. Speaking to the "royalty-free" lobby, she urged "all stakeholders to focus on the content of the package rather than the wrapping" as far as the term "open standards" is concerned.

Talking about conditions that patent holders may impose, Mrs. Kroes stated her preference clearly: "the fewer constraints the better." But she also made it clear that she would let the market decide. In my opinion, that's the right approach because FOSS can implemented patented standards, and FOSS can compete successfully. All major Linux vendors have agreed to pay royalties for patents, a fact that hasn't made Linux any less eligible from the perspective of public administrations.

This sentence in her OpenForum Europe address is particularly important:

I have nothing against intellectual property being brought to the standard-setting table, but it must be disclosed.

That quote shows an approach that is very similar to the European Parliament's resolution on the future of standardization: openness in the sense of transparency is key, and FRAND is perfectly compatible with those overarching goals.

Mrs. Kroes said in the same speech that "reasonable people often disagree" when trying to set FRAND license fees. That's a challenge, not a knock-out criterion. FRAND isn't a mathematical formula that arrives at a simple result. FRAND is a framework, and the way it's interpreted is subject to the specific circumstances of a license agreement. Of course it's simpler to determine that all license fees should be zero. But the simplest solution isn't necessarily the best one; it's rarely appropriate in contexts of a certain complexity.

Endorsement of FRAND standards such as MP3 and 3G

I recently saw a blog posting by Trond Undheim, EU "open standards" lobbyist of Oracle, in which he described the EIF process as a "tragedy" only because some disagree with him. He vented his frustration by referring to a group of EU officials as "rats" transmitting the "RAND disease" (RAND is synonymous with FRAND). After using that word half a dozen times he then added a spurious disclaimer concerning what "rats" referred to. Later he deleted all mentionings of that word, and finally disabled that embarrassing article as a whole. (I have kept a local copy. and as I write these lines, the edited version of the post can be accessed here.)

The ones who pursue this kind of divisive strategy also tend to portray Mrs. Kroes as an unconditional supporter of royalty-free/restriction-free standards and make other members of the European Commission, or certain DGs (directorates-general), out to be on the side of proprietary software companies.

The positions Mrs. Kroes takes in her public speeches are actually much more balanced and inclusive. In this speech delivered in 2008, she used MP3 as a positive example. MP3 certainly comes with restrictions and with obligations to pay royalties.

in late September, when she talked about "common open technology platforms", her example was the 3G mobile communications standard, which is a patented standard licensed on FRAND terms -- just like MP3.

FRAND's role in antitrust law

The European Commission is also an antitrust authority, and in that role considers FRAND a perfectly acceptable approach -- and FRAND-based royalties compatible with open source rules.

In October 2007, the Commission announced an agreement with Microsoft on how to meet its obligations under the 2004 Commission decision to the regulator's satisfaction. At the time, Mrs. Kroes was in charge of competition enforcement. She said that the licensing terms agreed upon would "allow every recipient of the resulting software to copy, modify and redistribute it in accordance with the open source business model" and was pleased with Microsoft's related business practices "in particular towards open source software developers".

Those open-source-friendly arrangements, however, involved payments: a one-time fee for access to some documentation, and a percentage of revenues for a patent license.

When the Commission accepted commitments from Rambus in a case involving patents on microchip technologies, Mrs. Kroes talked not only about that particular antitrust matter but also. more generally, about "lessons learned for standardization":

This is why many standards organisations require not only disclosure of potentially relevant intellectual property rights, but also a commitment to license those intellectual property rights on fair, reasonable and non-discriminatory - in other words FRAND - terms. These conditions precisely aim to prevent one company unlawfully capturing a standard and overcharging for its technology.

So FRAND is fully acceptable from an EU competition point of view, and there's no reason why it should be treated any differently by the EIFv2.

In another antitrust case, IPCom, the Commission issued a press release with the following headline:

Antitrust: Commission welcomes IPCom's public FRAND declaration

That statement described FRAND as pro-competitive:

The unrestricted access to the underlying proprietary technology on FRAND terms for all third parties safeguards the pro-competitive economic effects of standard setting.

Against that backdrop, I venture to predict that the Commission is going to be consistent with its multiple past endorsements of FRAND and its accurate distinction between openness and royalties.

If you'd like to be updated on patent issues affecting free software and open source, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Tuesday, October 19, 2010

The European Interoperability Framework (EIF): FOSS-compatible FRAND licensing could be the solution

ZDNet UK couldn't have chosen a more appropriate context than its "Communication Breakdown" blog to report on the state of the European Interoperability Framework debate. Looking at that article, other media reports and some Twitter messages, there are strong indications that this process has hit a snag, or even an impasse.

What I mostly see in the public debate is a blame game: some free software advocates and anti-patent activists teaming up with open hypocrites attacking the Business Software Alliance (BSA) over its support of fair, reasonable and non-discriminatory (FRAND) patent licenses.

I have my own views and I don't fully support the demands of either side so far. On both sides I see a number of companies and entities (such as the BSA) against which I had to fight when I fought against a proposed EU software patent law. Meanwhile, those on the "open standards" side who also opposed that bill (FSFE, FFII etc.) now seem to care more about their alliances with companies like IBM and Oracle in the "open standards" context, so they turn a blind eye to those organizations' wrongdoings in connection with software patents and interoperability. Worse than that, they claim that FRAND-based standards are inherently incompatible with free and open source software, which is incorrect.

The EU wants a new EIF and I think it would be desirable to work things out, but in order to get there, the debate has to move on from overgeneralizations (such as the one I just mentioned about FRAND and FOSS) to a more specific description of the issues and of possible solutions. As long as some say that only "royalty-free", or more generally, "restriction-free" patent licenses allow "open standards", this won't work, I'm afraid.

Today I had a Twitter conversation with two FOSS lawyers -- Carlo Piana (FSFE Counsel) and Andrew Katz (FSFE Fellow) -- and a FOSS-specialized journalist -- Glyn Moody -- over the EIF, and the discussion demonstrated both the obstacles and a possible path to a solution.

In that Twittersation, three things became absolutely clear to me:

  1. Only certain -- but not all -- FRAND patent license terms are incompatible with FOSS licenses (the unpragmatic and irrelevant GPLv3 aside).

  2. It's wrong to focus on "royalties" as the sole knock-out criterion because royalty payments can be made to work for FOSS, and field-of-use and other restrictions are also part of the equation.

  3. The process could still be concluded with an outcome that would be satisfactory to all stakeholders -- public administrations (for whom the EIF is supposed to be a useful set of procurement guidelines), patent holders and open source -- if the "royalty-free standards" camp could describe exactly which FRAND license terms don't work for FOSS and propose realistic, targeted solutions that address those concerns within a FRAND framework.

    That would, of course, also require the BSA and other representatives of patent holders to agree to a FOSS-compatible FRAND solution. I don't know if the BSA ever claimed that all FRAND works for FOSS, but at any rate it should recognize that item #1 needs to be addressed.

I'm in the middle between the two camps because I'm pro-FOSS and against the patentability of software, but I also know that FRAND is a good concept in principle. Those who dismiss it (such as by claiming that it's not as simple as "royalty-free") appear to underrate it dramatically. Sometimes you don't know what you've got till it's gone. I've experienced situations in which a FRAND commitment would have prevented problems from arising, in IT (such as this EU antitrust case, which wouldn't be necessary if IBM promised to make whatever required intellectual property available on FRAND terms) and elsewhere (commercial exploitation and governance of professional sports).

In the following I would like to provide some more specific thoughts on the foregoing. Again, I'm not in the position to speak on anyone else's behalf: I just outline my own independent thinking. I don't have a complete compromise proposal at hand, but I have suggestions for how to get there:

Don't insist on "royalty-free"

Much of the EIFv2 debate has so far been centered around the question of whether royalty-free access to the relevant patents is an indispensable requirement for a standard to be considered open. That claim has been made by FSFE, ECIS, OpenForum Europe, and others. It runs counter to how the ICT sector has defined open standards for a long time. The main argument of the aforementioned lobby groups is that they say only royalty-free standards work for open source.

I wonder why anyone in the EU takes that claim seriously in any way. There's overwhelming evidence to the contrary. In another blog post I have already mentioned several examples of GPLv2-based patent license deals involving royalty payments. The first one of those was done and announced back in 2006. So if patent royalties don't work for GPLv2'd software at all, a host of companies would be in breach of the GPL now for distributing Linux. The Free Software Foundation has the Linux copyrights assigned and it is the creator and guardian of the GPL. It wouldn't refrain from enforcing the GPLv2 for such a protracted period of time. Therefore, it's clear that such deals are possible under GPLv2. They would even have been possible under the early drafts of GPLv3 as Richard Stallman admitted.

Red Hat is probably the most dishonest one of the proponents of that "royalty-free" dogma. It entered into at least one -- more likely two and possibly even more than two -- patent licensing deals under which it paid royalties to patent holders, still distributes the related software under GPLv2.

A European Red Hat lobbyist has repeatedly made the claim that his company doesn't implement certain patented standards such as MP3 because it "can't". If Red Hat can pay royalties to other patent holders, I can't see why it can't do a license deal with MPEG LA. In fact, a European competitor of Red Hat, Canonical, ships its Linux distribution called Ubuntu with MP3 and several other proprietary formats. It also became the first Linux company to license MPEG LA's AVS/H.264 video codec.

With baseless red herrings (red hats, in particular) of this kind, any political process can get derailed...

Don't narrow the issue down to royalties -- address all patent-related restrictions

I explained in the foregoing that royalties can actually be made to work for FOSS. It doesn't make sense to narrow the debate to an aspect that's actually a non-issue.

There are serious people who point out that the question of patents in connection with standards is a broader one. If those say "RF", they mean totally "restriction-free" access to patents, not just "royalty-free". Glyn Moody always refers to RF as restriction-free and I've seen him correct others on Twitter when they used the narrower term. Simon Phipps, a board member of the Open Source Initiative and formerly chief open source executive at Sun Microsystems, just tweeted the following sentence, which I consider accurate:

Explanations which hinge on royalties distract from the real issue, which is both fiscal & non-fiscal restrictions.

There are other terms than royalties that patent holders can impose. Sometimes those non-monetary ones are even more important. For instance, the Java patent license is royalty-free, but it's very restrictive. Oracle is suing Google over Java patents despite that license being available on a royalty-free basis to those complying with its various terms and conditions.

The only explanation I have for people narrowing the debate and some of the proposed language to "royalty-free" is that they hope to get some language into the final document that they will then try to interpret as "restriction-free" even though they only demand "royalty-free" at this stage. Those kinds of tactics are common in politics, but those pursuing them shouldn't be surprised that they meet stiff resistance: patent holders might as well stop paying renewal fees to the patent office if they're required to waive the entirety of their rights. It's not that the EIF would require them to do so, but I can understand if they're concerned about anything that someone might try to interpret that way later.

In the "royalty-free" context, I wonder how the FSFE can pursue those tactics even though it usually always emphasizes the importance of the "four freedoms" (some of which are unrelated to royalties) and the meaning of "free as in speech", not just "free as in beer". Richard Stallman himself would always stress this holistic approach. His European affiliate organization, which is just a lobby group but didn't play any role in the creation of the movement, is unfortunately less faithful to his principles.

Specify all restrictions and requirements that might be considered FRAND but don't work for FOSS

In my Twittersation with the three European FOSS advocates I mentioned, it became clear pretty quickly that they have concerns about certain terms of FRAND licenses that they say don't work for FOSS.

One example that was mentioned is that one can't impose patent royalties on downstream users. So if an open source developer publishes a piece of software under a FOSS license, the developer can't keep track of every copy of the software that gets distributed (since anyone downloading or in some other way receiving the software can pass it on to others, and so forth). That creates a problem for per-unit patent royalties.

But that doesn't mean that no royalties can be paid at all. Per-unit royalties are a question of responsibility, accountability, and collection/refinancing. For example, MPEG LA has an annual royalty cap for its AVS/H.264 video codec license. A company paying that fixed amount never has to worry about the number of downloads. Chances are that Red Hat also negotiated fixed amounts with the patent holders from which it has obtained licenses. And there must have been ways -- maybe other ways -- in which this problem was solved for all the other companies in the industry who pay patent royalties on GPLv2-based software.

Another question is field-of-use restrictions. It's understandable that patent holders will grant licenses on a restricted basis (I actually mentioned Oracle's Java license before). The MPEG LA license is also restricted, but that doesn't mean that software can't be published on open source terms. It's just that if anyone utilizes that software in fields of use for which the patents haven't been licensed, the patent holders may approach the non-compliant user. Maybe they'll work this out with an additional payment (that's what would happen in MPEG LA's case). It's just important to make sure that someone publishing software under a FOSS license won't be held responsible for actions of others that are beyond control. I'm sure this has also already been resolved in some patent license agreements involving open source (since there are so many of them in place).

Two quotes from Andrew Katz in today's Twittersation show that FOSS doesn't have a problem with all FRAND terms -- only with some. Firstly he said:

my personal view is that RAND is against all freedom in spirit, and against some licences in word (e.g. GPL)

RAND is a shorter version for FRAND; in EU competition law the preferred term is FRAND, but if someone in the US says RAND, this means the same. Andrew correctly made the distinction between FOSS philosophy and the legal meaning of FOSS licenses. I also distinguish all the time between my dislike for software patents and the fact that solutions must be found to deal with them.

When I pointed Andrew to the fact that Richard Stallman admitted even the early drafts of GPLv3 wouldn't have blocked the patent license deal between Microsoft and Novell, he said something very important:

it depends on what you mean by Rand licences. It is possible to draft a compatible licence. Most aren't

That's the whole point I'm trying to make here: FRAND can be made to work with FOSS, including the GPLv2. A FOSS-specialized lawyer and FSFE Fellow -- who also blogs about open source law for ComputerworldUK -- just confirmed it.

So the best next step is for the FSFE and others to identify which kinds of FRAND terms don't work, and to make constructive proposals for criteria that make FRAND licenses compatible with FOSS. By "constructive" I obviously don't mean "royalty-free", as I explained. But without a doubt, FRAND license agreements that prohibit the use of patents in FOSS, explicitly or as a consequence, wouldn't work. I don't think the EIF would necessarily go into too much detail, but it could provide some guidance for FOSS-compatible FRAND licenses, which would be a pragmatic solution and obvious compromise.

Don't claim discrimination against FOSS when closed-source proprietary software is also affected

In connection with all of this, it's also important not to claim "discrimination" where there isn't any.

A few weeks ago Glyn Moody wrote that FRAND licensing isn't non-discriminatory because, as he said, it discriminates against FOSS. This was also part of today's Twittersation. After the point on per-unit royalties was made, I asked him why he then (instead of continuing to oppose FRAND as a whole) doesn't just demand that there must be a possibility for "FRAND lump sums". Glyn replied:

because that would allow companies to demand huge lump sums that were impossible to pay, citing millions of downstream users

He immediately added:

it would also be impossible for projects that had no company behind them, leading to a two-class system

This is a perfect example of calling something "discriminatory" that actually isn't. Glyn is right that licensing patents is much more difficult for smaller companies, let alone projects without companies behind them, than for larger ones. But that isn't open-source-specific. A small company writing closed-source proprietary software and distributing it free of charge (as part of a "free" or "freemium" business strategy) would face the same issue. Discrimination as a term only applies if a group is uniquely disadvantaged. The advantages of large, deep-pocket companies over smaller, sparsely-funded ones, or of any kind of company over non-company software development projects, are manifold. Patent licensing is just one area in which large organizations benefit from size, and again, you don't have to be open source to face those challenges. It's just that you're small, or that you're not a company.

Don't betray the EU's FOSS-friendly attitude

EU politicians have a concern for FOSS, and that's a good thing. What I'm afraid of is that some may try to capitalize on the EU's love of open source for the purpose of a short-term tactical advantage in a political process and ultimately hurt the cause.

By the foregoing, I don't mean Glyn Moody; he's a journalist, not a lobbyist, not an attorney. I mean the ones who have now been trying for a long time to claim that FRAND is the antithesis of FOSS. Some of them have been doing this even though in their daily legal work they know very well how to solve those problems all the time -- and they know that almost all patent license deals involve royalties, including deals involving open source.

I'm more than sympathetic to their philosophy, but I don't think software freedom is an end that justifies any means. If we don't like something, we have to say we don't like it -- not that it isn't legally possible even though it is.

From my personal point of view, the best outcome would be a compromise where the FOSS world accepts a FOSS-compatible denomination of FRAND and where major patent holders recognize that FRAND must be made to work for FOSS to solve such problems as accounting for per-unit royalties.

Like I said further above: sometimes you don't know what you've got till it's gone.

If you'd like to be updated on patent issues affecting free software and open source, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Monday, October 18, 2010

FOSS can implement patented standards

Anti-IP extremists and self-serving hypocrites do the cause of free and open source software a disservice with incorrect claims about the use of patented standards in FOSS projects. They say such patents must be made available by their holders on a royalty-free and, more broadly speaking, generally restriction-free basis in order to be compatible with FOSS licenses, especially the GPL. That's simply not true.

Not only is it untrue, and disingenuous. I also consider it dangerous. Software patents are a fact of life. Their abolition isn't achievable. Since there are countless software patents covering a huge number of technologies and functionalities, FOSS must find ways to deal with patents, and in fact, it already has. In particular, it must continue to find constructive and realistic ways rather than just insist that patent holders waive all rights, which isn't going to work with all right holders.

If such extremism were the only way, Linux and other important free and open source software would sooner or later be unusable in most of the industrialized world, which is increasingly mixed-source.

If the FOSS side and the patent side are both reasonable, the combination of both works without problems. If some FOSS people act unreasonably, they can certainly make their projects largely irreconcilable with patents (such as by using the highly political and unpopular GPLv3). That's self-inflicted damage of a kind that no responsible decision-maker can support. Conversely, if patent holders try to use intellectual property rights to foreclose FOSS-based competition (such as IBM against TurboHercules), that's also a big problem. But if patents are contributed to a standard on fair, reasonable and non-discriminatory (FRAND) terms, everything's fine.

My mobile phone stands as proof

I recently bought a Samsung Galaxy S i9000 smartphone. It's powered by Android, which is based on Linux, the most important piece of software available under the GPL. Samsung is known to pay patent royalties on those devices, just like its major competitors (such as HTC and LG).

I wish they'd all oppose those patents politically, but even if they did and at some point succeeded, we'd still need a solution for today's framework. And that solution is called licensing. More specifically, what's needed is licensing on FRAND terms.

Linux was the first example. Here's the second: most if not all of the applications for my phone are written in the Java programming language. That one is effectively controlled by a single vendor, Oracle (since it acquired Sun, the original cradle of Java). Java is a de facto standard. Oracle provides different pieces of Java software under the GPL. But the Java patent license is among the most restrictive ones in the industry.

The fact that no free software organization or other entity sues Oracle over this (instead, Oracle itself is suing Google in a different Java-related context) shows that patented standards aren't at odds with the GPL.

More on the Java patent license

On Wednesday, the so-called European Committee for Interoperable Systems (ECIS) published a rather aggressive statement on the European Interoperability Framework (EIF), a set of EU procurement guidelines.

Oracle is a member of ECIS, but even more importantly, Thomas Vinje, Oracle's outside counsel for EU antitrust matters, is ECIS' spokesman and lawyer. If I were an EU official or a journalist and if he were telling me about how open source needs royalty-free and generally restriction-free access to patents on standards, I would ask him: "Mr. Vinje, can the Java standard be implemented freely under the GPL by anyone, even if none of Oracle's own GPL'd code is used for this?"

I would point him to reports like this one, according to which Oracle refuses to grant a Java patent license to one of the most important open source foundations.

Should he -- contrary to all the evidence -- answer with Yes, I'd ask him to show me the patent license that would allow this, and as I write these lines, he wouldn't be able to present anything like that. The patent license contained in the Java specifications is very restrictive, even if royalty-free. The GPL generally refers to "conditions" and "obligations" related to patents. It mentions royalties merely as an example of a patent-related condition/obligation.

I can't imagine that Thomas Vinje (again, he's Oracle's outside counsel for EU antitrust matters) would want Java to be excluded from use by European governments under the terms of the EIF. So other patent holders should have the same flexibility to reserve certain rights, as long as they do so on a FRAND basis.

A look at different FOSS licenses

Different FOSS licenses address the subject of patents in different ways. It's important to make the dinstiction between rules governing the patents belonging to a contributor to (or distributor of) a FOSS project and rules concerning patents licensed from third parties. FOSS licenses take different approaches to those scenarios. For the most part, licensing patents from third parties doesn't represent any problem.


GPLv2 doesn't contain an explicit patent grant. There's only an implicit one. I've explained the limitations of that implicit patent license in this posting. Basically, if someone publishes software under GPLv2, such as Oracle with some of its Java software, everyone using that software without modifications is pretty safe from patent infringement assertions. But once the code is altered, it's better not to rely on the implicit license.

The foregoing relates to patents held by someone who publishes code under the GPLv2. The other scenario addressed by the GPLv2 is the one that really matters in connection with patented standards: the distribution of GPL'd code by someone who obtains a patent license from a third party.

The GPLv2's preamble claims that a patent must be licensed for everyone's free use on GPL terms or not at all. Nevertheless, in 2006 Novell announced a partnership with Microsoft, with one of its effects being "that customers deploying technologies from Novell and Microsoft no longer have to fear about possible lawsuits or potential patent infringement from either company."

There was some criticism by free software extremists, and there were also questions by some very reasonable people, but four years later, no one has made a legal claim that this constituted a violation of GPLv2. The language in the GPLv2 doesn't disallow all ways in which one can satisfy the requirements of a patent holder.

Meanwhile, such companies as Amazon.com, Salesforce.com and TomTom have agreed to pay royalties for using patents that (according to my interpretation of the announcements) included patents that read on Linux. No one has formally accused those companies of GPLv2 violations either. I gave more examples further above (where I contemplated my Android-based Samsung smartphone). And I could talk about Red Hat's payments of patent royalties (which I may write about in more detail some other time).


When free software radicals saw how pragmatically some major open source distributors dealt with patent licensing, they chose the path of defiance: the GPLv3, as mentioned further above. While they were drafting that one, they saw the Microsoft-Novell partnership. Not only was that partnership possible under GPLv2: even the first drafts of GPLv3 wouldn't have disallowed it. Here's what Richard Stallman said in 2006:

It turns out that perhaps it’s a good thing that Microsoft did this now, because we discovered that the text we had written for GPL version 3 would not have blocked this, but it’s not too late and we’re going to make sure that when GPL version 3 really comes out it will block such deals. We were already concerned about possibilities like this [...]

So if the inventor of the GPL admits that even the early drafts of GPLv3 didn't block inbound patent licensing (even though this was the single biggest reason for which the FSF started the GPLv3 process in the first place), how can anyone reasonably claim that it isn't possible with GPLv2?

GPLv3 ultimately became very restrictive, but as a result, it's a big-time failure. No major open source project (such as Linux) has embraced it. So when I say "GPL", I usually mean the GPLv2 because that's the only version of the GPL that's relevant in the real world.

Apache Software License 2.0

The Apache Software License 2.0 (ASL) contains, in its Article 3, an explicit patent license. It has an interesting defense mechanism where someone instigating litigation over an alleged patent infringement automatically becomes exposed to possible counterclaims by other patent holders who contributed to the same ASL'd project. The patent grant itself is limited to the patents someone may hold on their contributions to a project and the license contains no restrictions or prohibitions (like the GPLv3) on the terms of a third party patent license. Therefore, someone can implement a standard patented by other parties and work out a license with them without having to take care of the entire ecosystem. That's reasonable.

BSD licenses

There's a very popular family of FOSS licenses called the Berkeley Software Distribution (BSD) licenses. Those are rather short and simple. They don't even mention the word "patent". As a result, there's no problem with implementing patented standards. If someone publishing software on such terms holds any patents that read on their code, there's an implicit license grant. If someone licenses patents from third parties, there's nothing in a standard BSD license that would prevent the implementation of such a standard.

European Union Public License v1.1

The European Union Public License v1.1 (EUPL) was published in 2007 and should be a logical choice for European governmental bodies (at the EU level as well as in the Member States) for publishing software on FOSS terms. The idea of governments sharing their development efforts on FOSS terms is a great one: if taxpayers fund development in one place, taxpayers in another shouldn't have to pay again (except for specific adaptations that may be needed).

The EUPL contains an explicit patent license as far as the patents of someone publishing code under it are concerned. It doesn't contain any clause that would prohibit the implementation of patented standards if those patents are held by third parties.

In its FAQ on the EUPL, the European Open Source Observatory and Repository (OSOR) states that "when public administrations are using or distributing their own specific software under the EUPL, the risk from legal action related to patent infringement, while not zero, is very low." This relates to a scenario where a patent holder would claim an infringement. The EUPL per se doesn't prohibit the use of third-party patents.

MXM license

It is even possible to define an open source license that limits its scope only to the copyright aspects of the program code distributed under it without explicitly or implicitly restraining code contributors or distributors from enforcing their patent-based rights.

For a working group of the MPEG multimedia audio/video codec consortium, Carlo Piana, an Italian FOSS lawyer who also advises the Free Software Foundation Europe and counts Oracle among his recent clients, designed a license that was based on the Mozilla Public License (Mozilla is the foundation behind Firefox and other free software) but with a carve-out for patents. The new license was called the MXM license.

In this blog posting, Carlo explained his motivation. He pointed out that his actions shouldn't be confused for an FSFE effort. He knew this was going to be controversial in open source circles where software patents are a red flag. His justification nevertheless stresses that (in other words) political opposition to software patents is one thing and trying to find a way for patent holders to publish and distribute open source software is another. That distinction between ideology and pragmatism is key.

The MXM license goes way beyond what's needed to implement standards patented by third parties. Compared to what it does, licensing patents from third parties is child's play.

Summary of different licenses with a view to custom software developed by/for governments

For governmental bodies seeking to develop (or to have subcontractors develop) custom software on open source terms, there's no shortage of appropriate licenses that can handle patented standards.

Apart from the GPLv3, which is inherently incompatible with patented standards because it was purposely designed that way, almost any other FOSS license will work. Such licenses as the European Union Public License and the wildely popular Apache license and BSD licenses don't create any problems for those who implement third-party patents.

Even the GPLv2 is, contrary to what some people claim, not incompatible with the notion of third-party patents. Numerous companies using and distributing software under the GPLv2 have made arrangements with patent holders, including that they have accepted to pay royalties, and to date I'm not aware of any of them having experienced any problem because of that.

This is actually good news for FOSS. If it couldn't deal with such patents, it would be strategically lost.

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Friday, October 8, 2010

Google answer to Oracle patent suit possibly wrong on Java history

Earlier this week, Google filed its answer to the patent infringement suit Oracle started in August. At the time, I looked into certain licensing issues, explained why this represents nothing short of a debacle for the Open Invention Network, analyzed a recent Google submission to the US Supreme Court with a view to Google's position on software patents, and last month I criticized the Free Software Foundation's belated reaction for its grossly misleading content and spam tactics.

When I read Google's response, I was unsurprised and underwhelmed. I tweeted this assessment:

#Google response to #Oracle #Java lawsuit over #Android denies and disputes everything. No surprises at all in the document.

When V3.co.uk asked me for comment on Google's defense strategy, I said that Google can obviously afford to deny and dispute everything and stressed that Google "knowingly and willing did what it did", while I didn't see any indication of Oracle having lured Google into a trap. That was my way to comment on one of Google's arguments, the so-called "unclean hands" defense, meaning that Google blamed Oracle/Sun for reproachable behavior.

A short and simple description of Google's defense strategy as a whole is that Google would prefer the suit to be dismissed before it even begins; it tries to have all seven patents declared invalid; if they are valid, Google denies there's an actual infringement; if there's an infringement, Google claims it had the right to use those patents anyway; and if all else fails, then Oracle isn't entitled to anything because it's kind of evil.

David "Lefty" Schlesinger, an open source licensing expert with significant knowledge of patent matters, tweeted his amusement at Google's wholesale denial, which he paraphrased like this:

"Yup, that looks like a patent. Beyond that, we know, much less admit, absolutely nothing."

Again, it's understandable -- and had to be expected -- that Google exercises its rights of defense to the fullest. Others in Google's situation would do the same. But it's unrealistic to assume that Oracle's suit would be dismissed. This case won't go away anytime soon unless Google makes concessions that Oracle regards as a satisfactory outcome. I'm afraid that won't happen quickly, so the two companies will have to fight this out in court. If Google wants to get away unscathed, even a large number of unconvincing arguments won't help. It will need to make some really compelling points, and at least for the time being I don't see those.

I'll keep following those developments, of course. I didn't see any other observers being impressed by Google's defense either. The engadget website published an analysis that accurately points out Google will be in major trouble if only one of Oracle's seven patents is deemed both valid and infringed. I would liken this to a tennis match where your opponent has seven match points at a time. In tennis, the theoretical limit is actually six, and in this legal process, one "killer" argument could theoretically do away with everything, but there's still no reason to assume Google really has one. Therefore, I tend to agree with engadget's prediction that "when all's said and done we'd guess the state of Java on mobile will be very, very different."

Besides a legal defense on all counts and all fronts, Google also raises points in its response that appear to be written for the court of public opinion more so than the court of law. Google talks about how Oracle/Sun never really made good on the promise to open up Java and about what Oracle demanded back in 2007, more than two years before it actually acquired Java as part of Sun.

Open source ethics and expectations aren't a legal concept. Someone's voting record in a standards-setting body isn't tantamount to granting a patent license, especially not a license to patents they get to own only a couple of years later.

My personal opinion is that a filing with a court should respectfully focus on what the court needs to know rather than place a great deal of emphasis on what would more appropriately form part of a position paper to be shown to the open source community.

So far it seems that Google's open-source-specific arguments don't convince this community either. Simon Phipps, a member of the board of the Open Source Initiative (OSI) and the former chief open source executive at Sun, tweeted that paragraph 7 of the "Factual Background" section of Google's filing "also suggests their lawyer is being badly advised" and described it as "not actually factual."

That paragraph 7 mentions the Apache Software Foundation's interest in ensuring compatibility with Sun's Java software. Since Google incorporated some of the code of an Apache project (Harmony) into its Dalvik virtual machine for Android, the Apache-Java connection could be interesting. However, what Google quotes relates to compatibility testing, not patent licensing. At any rate, I am sure that Simon was the Apache Software Foundation's liaison at Sun, so if he (who certainly isn't an Oracle apologist) has a different recollection and/or different assessment of the situation, something may be flawed. Maybe we'll find out more about that some other time. However, like I said before, the legal case will hinge on different issues, particularly on patent validity and patent infringement.

Even if Google ultimately convinced the community that Oracle committed some wrongdoing that's outrageous from an open source perspective (which so far doesn't seem to be the community view, apart from a general dislike for software patents and litigation), they'd be barking up the wrong tree, I guess. Oracle isn't going to be susceptible to community pressure. Oracle is the epitome of toughness in this industry.

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Sunday, October 3, 2010

Android caught in a crossfire of patents

I have previously commented on the latest complaints (brought by Microsoft against Motorola) and explained the role of the US International Trade Commission as a patent enforcement agency with a particular view to Android.

While I've been following patent disputes in our industry for some time, I can't remember that any software platform has ever been under pressure from such a diversity of patents -- held by several powerful competitors -- as Android. This is a uniquely precarious situation for Google and its partners (the vendors of Android-based smartphones and the group I mostly care about: application developers).

Under the rule of law, the defendants can seek the invalidation or narrowing of the patent claims asserted (except that some of those have already been court-validated and survived reexamination). They can furthermore argue that their products don't actually infringe.

But the defendants could also lose on all counts, which would really be dreadful for the entire Android ecosystem. It's not an exaggeration that the injunctions and import bans that have been requested would strip Android of so much functionality that the thing would be reduced to uselessness in the end.

Given the well-known strength of the patent portfolios of Apple, Oracle and Microsoft, and considering those companies' vast resources and expertise, the latter scenario (all patents valid, all of them infringed) is certainly a possibility. Even a fraction of that could already have meteoric impact.

By contrast, it would be an utterly unrealistic assumption -- wishful thinking of a dangerous kind -- that there's no fire behind all of this smoke. Those patent holders don't have a track record of instigating litigation without merit. For instance, all four patent infringement suits previously brought by Microsoft resulted in the defendants recognizing their obligation to pay.

Possible further escalation

While the current situation already appears like patent mayhem to many people, there could be even much more activity in the future.

Sooner or later we might see additional patent holders assert their rights. After Apple, no one thought of Oracle following suit five months later; after Oracle, it took only about six weeks for Microsoft to take action. No one knows who might be next and when.

The three companies who have already entered the fray could also step up their enforcement action. Besides pursuing additional targets (for example, Oracle could lodge complaints against vendors with the USITC), they could bring additional patents into play; their portfolios are certainly large enough they can find more, possibly so much more that the patents currently asserted are not even the tip of the iceberg.

So far, those Android cases relate exclusively to US patents. But those right holders own relevant patents all around the globe. In this blog posting I discussed the international equivalents of certain patents used by Apple and Oracle against Android. Apple is currently involved in a patent battle with Nokia (started by the latter) and just extended its action to the UK, another strategically important market. I could see similar extensions happening to some Android lawsuits as well. The patents are certainly in place for that, and the economic and strategic importance of these disputes is beyond doubt.

While the proposed EU directive on computer-implemented inventions was rejected by the European Parliament in 2005 (a decision for which I campaigned), those kinds of patents are enforceable in the major European markets. For instance, two of the patents asserted by Microsoft against Motorola have a European equivalent that was validated in April by the Federal Court of Germany, the highest German court in such matters (I reported).

So theoretically, an even greater number of patent holders could sue a multitude of Android-related companies in a large number of jurisdictions on several continents over hundreds of patents in total (as opposed to a few dozen). It's not all going to happen, but I have a hunch that some further escalation is more likely than not to occur unless Google alters course.

Categories of functionality at stake

I said before that if all those complaints succeed (even just the ones that have already been filed), Android would be reduced to uselessness. That's because the patents asserted cover an impressive diversity of technologies that define the user experience -- and, therefore, customer expectations -- in today's smartphone market.

To show the breadth of the patent arsenal Android faces at this point, I've grouped the different patents by field of use:

Virtual machine (application programming platform) patents

Oracle asserts seven patents obtained by Sun and relating to virtual machines (which according to Oracle read on Dalvik, the virtual machine for Android). These patents have the numbers 6,125,447; 6,192,476; 5,966,702; 7,426,720; RE38,104; 6,910,205; and 6,061,520.

Contrary to what some claim, Google couldn't have avoided the problem (and couldn't solve the problem now) by developing Dalvik as a fork of IcedTea or other GPL-based Java software. To be safe, Google would either have to use the original Java code made available by Oracle (which might not meet Google's and the Android ecosystem's requirements in terms of functionality and performance) or switch to an alternative, legally safe platform such as .NET/C#.

Should Oracle obtain the injunction it seeks, application developers would suffer. They might have to port their applications to a new development system, and depending on which one it would be, they might then miss some functionality.

User interface patents

Most of the patents asserted by Apple against HTC are UI patents. Some of them are general graphical UI (GUI) patents not even specific to smartphones, such as patent #7,362,331, patent #5,455,599, and patent #6,424,354.

Others are specific to portable devices and, especially, touchscreens, covering among other things Apple's multitouch UI: patent #7,479,949 (general multitouch patent), patent #7,657,849 (unlocking by gesture), patent #7,469,381 (scroll back and bounce), and patent #7,633,076 (can be used, among other things, to shut off the touchscreen when the phone is held to the user's ear).

Microsoft also holds numerous GUI patents and asserts one of them against Motorola: patent #5,664,133 relates to context menus.

Power and connection quality management

Stationary computers typically have a constant (if not uninterruptible) power supply and a stable network connection via a land line. By contrast, smartphones have to respond to an impending exhaustion of battery power, must be particularly economical about the use of power, and also have to adjust to fluctuations in radio signal quality.

Apple asserts the following patents relevant in this context: patent #5,920,726 (managing power conditions within a digital camera device), patent #5,848,105 (GMSK signal processors for improved communications capacity and quality), and patent #7,383,453 (saving power by reducing voltage for a temporarily idle element of a processor).

Microsoft's patent #7,644,376 covers a flexible architecture for notifying applications of state changes. I could imagine some interesting applications beyond the field of smartphones. In connection with mobile devices, this is an efficient technology for informing applications of a battery running empty or of variations in radio signal quality, enabling each application to adjust and respond to those situations in ways that greatly enhance the user experience (preventing loss of data etc.).

Flash memory management

With the random access memory (RAM) in a stationary computer, or even with storage media such as conventional hard discs, one usually writes data just as needed without worrying about whether the same block of RAM or same sector on the storage medium gets overwritten too often. Nothing lasts forever, but those conventional components don't "wear out" too easily.

By contrast, flash memory is strongly affected by the extent to which it's utilized. For a block of memory to be rewritten, it firstly has to be erased. After a number of erasure operations, a block of flash memory becomes unusable. That number depends on a device but is always somewhat limited.

Microsoft's patent #6,621,746 optimizes the management of flash memory so as to minimize the number of erasure operations performed, thereby extending the life of the memory.

General operating system (including file system, network and communications) patents

While Apple's multitouch patents received more attention, it also asserts several patents covering general operating system functionality: patent #5,481,721 (passing objects -- of object-oriented programming languages -- between processes via a proxy object), patent #5,519,867 (object-oriented multitasking), patent #6,275,983 (object-oriented operating system), patent #5,566,337 (distributing events in an operating system), patent #5,929,852 (accessing resources on connected devices/servers in an efficient way that processes different data types), patent #5,969,705 (an event handler for keeping a foreground application responsive, delegating task to background application), patent #6,343,263 (real-time signal processing system for serially transmitted data), and patent #RE39,486 (extensible, replaceable network component system).

Not surprisingly, Microsoft holds a huge number of operating system patents and asserts a few of them against Motorola.
Patent #5,579,517 and patent #5,758,352 relate to the File Allocation Table (FAT) file system and the way it stores long file names in addition to short ones. These patents have been asserted by Microsoft in previous court cases and have survived different invalidations attempts on both sides of the Atlantic. From a legal point of view, they are therefore extremely strong.

Patent #6,826,762 can be used for different purposes of API abstraction. In the smartphone context, it particularly serves to make applications independent from the Radio Interface Layer (RIL) and, therefore, from different cellular systems and radios, requiring that only a hardware-specific driver layer be replaced when switching between different types of networks.

Synchronization (email, contact data, etc.)

This is an important category with a view to the user experience, considering the extent to which smartphones are nowadays used for email and personal information (contact data) management.

Microsoft asserts three related patents against Motorola: patent #6,909,910 (updating a contact or adding a new contact from call logs in a mobile communications device), patent #6,578,054 (optimizes online/offline synchronization by eliminating redundant data transmission and allowing multiple copies of data to be synchronized via incremental changes), and patent #6,370,566 (generating meetings requests and group scheduling from a mobile device, as opposed to using the mobile device only to view such requests/events).

One of the patents asserted by Apple isn't specifically related to synchronization but can also be seen as part of this broader category: patent #5,946,647 covers a "data parser" that can identify and evaluate phone numbers or other information.

This concludes the categorized overview of the patents asserted against Android. To make a long story short: even though those patent holders have so far only asserted a tiny number of patents as compared to the breadth and depth of their portfolios, it's hard to see how Android can be competitive unless these infringement claims are resolved.

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The US International Trade Commission as a patent enforcement agency

Microsoft lodged its patent infringement complaints against Motorola with a "traditional" court (namely, the US District Court for the Western District of [the State of] Washington) as well as the US International Trade Commission (USITC, or often also referred to as ITC). The USITC has in recent years also become an important forum for patent infringement disputes but many of you may not have been aware of it until recently.

You may remember that Apple's infringement action against smartphone vendor HTC, which also takes aim at Google's Android smartphone operating system, was also filed (in March) with a court plus with the USITC. In May, HTC brought its own complaint against Apple before the USITC (not in court at that point).

So why do some companies take their patent complaints to the USITC, additionally or alternatively to a court of law? What implications does this have for the patent infringement suits surrounding Android? I'll explain.

A "quasi-judicial federal agency" that can exclude infringing products from entry into the US

On its website, the USITC describes itself as an "independent, nonpartisan, quasi-judicial federal agency". The term "quasi-judicial" means that it's very similar (but not identical) to a court of law.

Its court-like functions are only a subset of the USITC's activities. The USITC also conducts studies and statistical analysis and provides advice to the President of the United States regarding trade issues. Those functions complement the work that is done by the Department of Commerce and the Department of Agriculture. The USITC itself is, unlike those government departments, not a policy-making body, nor does it negotiate trade agreements with other countries.

The USITC describes its quasi-judicial role as follows:

The USITC makes determinations in investigations involving unfair practices in import trade, mainly involving allegations of infringement of U.S. patents and trademarks by imported goods. If it finds a violation of the law, the USITC may order the exclusion of the imported product from the United States.

The last sentence shows that the USITC really has teeth: it can order an import ban on products infringing patents (or trademarks, but let's focus on patents here).

The effect of such a ban is that any further attempt to import the relevant products can be stopped. Banned products can be seized at customs or after already having entered the market.

A fast track for US patent holders -- subject to certain requirements

If you're a US patent holder and meet certain requirements, the USITC can save you a lot of time when you seek an injunction against an infringer. In a court of law it will take you several years from filing to (all going well for you) an injunction. How many years depends on many factors, but it's most often a much longer time than the roughly 18 months within which you can prevail in front of the USITC.

If you meet the USITC's requirements, you can lodge a complaint with it in addition to a court proceeding. This makes sense, especially since the USITC isn't a full-fledged court. If it orders an import ban, such decision has an effect similar to an injunction ordered by a court. But a court of law can do more, such as ordering the payment of damages.

Similarly to a first-instance court, an USITC decision can also be appealed. Patent infringement matters can be brought before the Court of Appeals for the Federal Circuit (CAFC).

I said before that an import ban is similar to an injunction. The key difference is that it only relates to imports of goods from other countries. Unlike an injunction, it doesn't affect vendors who manufacture their products (or have them manufactured) within the US. In a market such as smartphone, in which almost everyone (even a household US name like Motorola) manufactures outside the US for cost reasons, an import ban is almost as powerful as a court injunction. By contrast, in a market like enterprise software, production either takes place in the US or could be relocated there easily in order to circumvent an import ban.

Not only can a USITC proceeding relate only to imported goods but a complainant also has to prove competitive harm. This means in particular that you must show that you actually practice, in the US market, the inventions protected by the patent claims you assert (such as by selling products that make use of them), and you must show that you compete with the infringer.

The USITC's role in the three patent infringement cases involving Android

I mentioned before that Apple was the first one to bring an Android case before the USITC. The patents Apple is asserting in a Delaware court are an entirely different group from the ones used in its complaint with the USITC. Microsoft, however, is asserting identical sets of patents in either forum, which is the most forceful method to begin with.

In between Apple's and Microsoft's filings, Oracle initiated its patent infringement suit against Google in a California court. That one relates to Dalvik, the virtual machine on which all (or almost all) Android apps run.

Unlike Apple and Microsoft, Oracle did not lodge a complaint with the USITC. It's not that Oracle lacks determination. While Apple and Microsoft assert their rights against vendors of Android-based smartphones, Oracle decided to pursue Google itself. Under patent law, Google can indeed be held responsible for all infringements resulting from its publication of Android. Oracle goes straight to the source (from a free and open source software point of view, that's actually scary). But it's also possible to pursue vendors. Theoretically, even commercial users of infringing goods could be sued.

For the USITC, however, Google wouldn't be an acceptable target because it isn't (anymore) a vendor of imported Android-based phones. If Oracle wanted to, it could additionally lodge complaints against vendors importing Android-based phones. I wouldn't be too surprised if that happened. Assuming that Google doesn't work things out with Oracle in the near term, that would be a way for Oracle to increase the pressure.

The Open Invention Network wouldn't have access to the USITC

Finally, let's also look at the Open Invention Network (OIN) in connection with the USITC. Since both Oracle and Google are OIN licensees, many people have begun to realize that the OIN doesn't serve its stated purpose of protecting Linux against patent infringement assertions.

The OIN previously made completely unconvincing claims about having deterred Microsoft from enforcing patents in a Linux context. The fact that such companies as Amazon.com, Salesforce.com and TomTom announced that they pay royalties to Microsoft is yet another indication that the OIN just doesn't work.

Now in connection with Microsoft vs. Motorola, the question of the OIN's effectiveness will be brought up again. It's worth noting that the OIN, a patent-holding company that doesn't practice its inventions, wouldn't be able to satisfy the USITC's domestic industry requirement. The OIN grants licenses but without generating revenues, likely without significant expenses in general, and it doesn't litigate. According to recent ITC jurisprudence, a licensing company needs to prove expenses in connection with licensing, and litigation expenses are considered an essential type of expenses for that purpose.

Given that the USITC is the fastest track to an injunction, this further limits the OIN's effectiveness.

In a court of law, the OIN wouldn't be able to obtain an injunction either. Under the Supreme Court's eBay vs. MercExchange ruling (which I discussed in this posting on Paul Allen's patent infringement action), the OIN would not be able to pass a critical four-factor test. It could seek indemnities, but it couldn't disrupt an opponent's business.

So there are also procedural reasons, in addition to other explanations, for which the OIN is unable to change the calculus of major right holders like Apple, Oracle and Microsoft. The USITC and its recent popularity is part of that consideration.

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Friday, October 1, 2010

First reaction to Microsoft patent infringement action against Motorola over Android

I just read Microsoft's announcement of patent infringement action against Motorola in a US district court as well before the US International Trade Commission (which can ban imports of infringing devices).

Here's my initial reaction:

This is very significant but only the latest in a series of patent cases involving Android, after Apple suing HTC and Oracle going after Google itself.

These patent suits brought forward by industry giants with massive patent portfolios unmatched by Google are dark clouds over Android. Google must now act constructively and try to work out amicable arrangements with those right holders. Otherwise I'm afraid that third-party application developers investing their money, creativity and hard work in the Android platform will be harmed because of an irresponsible approach to intellectual property in a market in which patents have always played an essential role. Android phone vendors and other parties will also be affected, but application developers are the ones I'm most concerned about in all of this.

I will try to obtain more information and will comment in more detail soon (during or right after the weekend).

[Update 1] Microsoft Corporate Vice President and Deputy General Counsel Horacio GutiƩrrez has published a blog posting on TechNet outlining Microsoft's view.

[Update 2] This Seattle Post-Intelligencer article contains links from which to download the documents filed with the district court as well as the International Trade Commission. Those documents list the patents and products concerned.

[Update 3] Meanwhile I have published two follow-up postings. This article explains the US International Trade Commmission's role as a patent enforcement agency that could ban entry of Motorola's Android-based phones into the US market within 18 months. And this article talks about how the patent situation surrounding Android might escalate. It also contains an overview of all patents asserted by Apple, Oracle and Microsoft against Android, sorted by category. Microsoft's related patents are explained in some more detail.

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