Friday, April 29, 2011

Red Hat is now a regular customer of patent trolls: another settlement announced

While most of the world was watching the wedding ceremomy at Westminster Abbey, Acacia Research Corporation (a publicly traded non-practicing entity that collects royalties on patents) was doing business as usual and announced a new "confidential settlement agreement" of one of its subsidaries, named Site Update Solutions LLC, with Linux distributor Red Hat. All that was announced about the settlement is the following:

"The agreement resolves patent litigation that was pending between the parties in the United States District Court for the Eastern District of Texas, Civil Action No: 2:10-cv-00151-DF, related to U.S. Patent No. RE40,683."

Given that this case was not even at claim construction stage (a Markman hearing was scheduled for this summer) and going to go to trial next March, it's a safe assumption that Red Hat was required to make a payment. Acacia is not the kind of patent holder whow ould let anyone off the hook easily.

This is the second time in about half a year that an Acacia subsidiary received a check from Red Hat. In early October, Red Hat's settlement with Software Tree LLC concerning U.S. Patent 6,163,776 (on a "system and method for exchanging data and commands between an object oriented system and relational system") became known, and Red Hat drew criticism for its intransparency concerning the terms and conditions of the deal, which may or may not be in compliance with the GPL open source license.

Acacia should launch a frequent licensee bonus program, such as "you pay for 10 patents and get a license to an 11th patent for free." For Red Hat this might pay off within a few years. It could even become a Gold Member.

There's another non-practicing entity that made good money on Red Hat. In fact, Amphion Innovations' wholly-owned subsidiary DataTern owes about 25% of its total revenues over the last few years to just one patent license deal with Red Hat. Since 2008, that company claims to have generated revenues of approximately $17 million, and I recently found out that Red Hat paid $4.2 million to that entity a couple of years ago.

I'm pretty sure Red Hat has done more patent license deals over the years. Red Hat claims to be open but actually isn't when it comes to those dealings. If they aren't even forthcoming about settlements related to software licensed under the GPL, it's likely that they keep some deals entirely under cover.

Furthermore, things aren't going well for Red Hat in another case involving a patent that a jury found Google to infringe by using Linux. Red Hat may ultimately have to take a license to that patent as well in order to protect itself and its customers. There are efforts underway to have that patent declarede invalid, and the USPTO has started to reexamine it, but it's possible that the patent in question will be upheld, just like the jury in the Google case deemed it valid.

Details of the Site Update Solutions LLC case

The patent-in-suit is U.S. Patent No. RE 40,683 on a "process for maintaining ongoing registration for pages on a given search engine". According to the plaintiff's allegations, Red Hat infringed at least claim 8 of the patent-in-suit because it "updates internet search engine databases with current content from its websites, including at least,, and, by using an XML Sitemap ('Sitemap') and submitting it to various search engines."

This is a search engine optimization (SEO) issue as opposed to an issue concerning the Linux kernel. However, every patent license deal into which Red Hat enters, even if Linux-unrelated such as in this case, encourages other patent holders to collect royalties from them.

Also, it's quite possible that GPL-licensed software is used by Red Hat for the activities that allegedly infringe the patent-in-suit.

Site Update Solutions LLC filed its original complaint in May 2010 against 35 legal entities, including Internet businesses like, Facebook, LinkedIn and Monster as well as hotel chains like Accor and Starwood, retailers like Target and Wal-Mart, media companies like NBC and Thomson Reuters, and software companies like Adobe and Intuit. They amended the complaint twice. The second complaint targeted 37 companies. Red Hat was added as a defendant at that time (October 7, 2010) -- interestingly, very shortly after Red Hat's opaque settlement with another Acacia subsidiary.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn:

Thursday, April 28, 2011

Samsung now countersuing Apple in four countries on three continents

When I reported last Friday on Samsung's patent infringement countersuits against Apple in South Korea, Japan and Germany, I said that "it won't take long before we also see infringement accusations by Samsung against Apple in the US, most likely as counterclaims to Apple's lawsuit in the Northern District of California, and possibly beyond." Bingo! Today Samsung announced a lawsuit in that very district, alleging Apple's infringement of 10 patents.

Samsung is now suing Apple in four countries on three different continents. Here's my updated battlemap:

Apple vs Samsung 11.04.28

The file shown above has seven pages: the overview of the current situation; three slides that show the escalation that has occurred until today; and three pages with reference lists. If you are interested in seeing such battlemaps for other smartphone patent disputes, please have a look at my related folder or follow me there (it's a Twitter-like follower system). Or just follow me on Twitter, where I always announce new documents.

Asserted patents and accused products

You can find a list of the asserted patents and accused products in the reference section of the PDF file shown above, but I'll also list them here. These are the 10 Samsung patents asserted in the California complaint:

  • U.S. Patent No. 7,675,941 on a "Method and apparatus for transmitting/receiving packet data using pre-defined length indicator in a mobile communication system"

  • U.S. Patent No. 7,362,867 on an "apparatus and method for generating scrambling code in UMTS mobile communication system"

  • U.S. Patent No. 7,447,516 on a "method and apparatus for data transmission in a mobile telecommunication system supporting enhanced uplink service"

  • U.S. Patent No. 7,200,792 on an "interleaving apparatus and method for symbol mapping in an HSDPA mobile communication system"

  • U.S. Patent No. 7,386,001 on an "apparatus and method for channel coding and multiplexing in CDMA communication system"

  • U.S. Patent No. 7,050,410 on an "apparatus and method for controlling a demultiplexer and a multiplexer used for rate matching in a mobile communication system"

  • U.S. Patent No. 6,928,604 on a "turbo encoding/decoding device and method for processing frame data according to QOS"

  • U.S. Patent No. 6,292,179 on a "software keyboard system using trace of stylus on a touch screen and method for recognizing key code using the same"

  • U.S. Patent No. 7,009,626 on a "systems and methods for generating visual representations of graphical data and digital document processing"

  • U.S. Patent No. 7,069,055 on a "mobile telephone capable of displaying world time and method for controlling the same"

All ten of those patents are allegedly infringed by (without limitation) "the Apple iPhone 3G, the Apple iPhone 3GS, the Apple iPhone 4, the iPad 3G, and the iPad 2 3G". For the last three patents ('179, '626, '055), Samsung additionally names the iPod Touch and the iPad and iPad2 (without 3G).

The first seven patents are related to communications standards such as W-CDMA (UMTS) while the other three patents are user interface patents. Samsung does not describe the standards-related patents as patents that are essential to any standards in the development of which Samsung was involved. I interpret Samsung's descriptions of the patented inventions as ways to increase the efficiency (such as data throughput) of data communications over such networks. Samsung does not indicate that it believes to have made a commitment to grant licenses to those patents on a reasonable and non-discriminatory (RAND) basis. Apple might disagree with that assessment and claim that Samsung has such obligations because of its membership in certain standard-setting organizations (an assertion that Apple also makes against Motorola, and which plays a key role in Apple's dispute with Nokia, who clearly described the first set of patents asserted against Apple back in September 2009 as standards-essential patents).

Other observations and next steps

Samsung is represented by a team of Quinn Emanuel Urquhart & Sullivan attorneys led by Charles Verhoeven, a first-rate patent litigator. He also helps two other major Android device makers, Motorola and HTC, in some of their Android-related lawsuits.

The speed with which Samsung responded to Apple's lawsuit in four different jurisdictions (in three of them within a week, and in the fourth one in less than two weeks) suggests that Samsung expected and, consequently, prepared for this. Apple's COO (and presently Acting CEO) Tim Cook said that Apple tried "for some time" to work out this matter with Samsung. Presumably Samsung already commenced a search for patents it could assert against Apple when a lawsuit appeared on the horizon as a possibility.

Similarly, it's possible -- and in my view fairly likely -- that Apple also made preparations for the next steps in this dispute. Samsung has mounted a swift and strong response to Apple's initiative. Now the ball is in Apple's corner, and I guess we'll soon see lawsuits filed by Apple against Samsung in several jurisdictions.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn:

Wednesday, April 27, 2011

Barnes & Noble's answer to Microsoft's complaint raises more questions than it answers

Two days ago Barnes & Noble filed its answer to Microsoft's patent infringement complaint of March 21, 2011 with the U.S. District Court for the Western District of Washington. Barnes & Noble is the first defendant to reply. Its foreign manufacturers Foxconn and Inventec have yet to do so.

On April 19, 2011, the US International Trade Commission had instituted an investigation of Microsoft's corresponding complaint related to the same patents and products (investigation no. 337-TA-769). What happens all the time in such situations is that the federal lawsuit is stayed for the duration of the corresponding ITC investigation. I've seen it happen between Apple and Nokia, Microsoft and Motorola, and in other disputes. Therefore, Barnes & Noble's answer in the Western District of Washington lawsuit may not play a practical role anytime soon, and if the dispute is settled, it will likely be over before the federal case ever goes on trial.

No infringement counterclaims

The first thing I always look at when companies respond to infringement complaints is whether they assert any patents of their own as counterclaims. Barnes & Noble didn't do so, which is what I expected since I had previously seen a letter dated April 7, 2011, to the ITC, in which Barnes & Noble made the following claim:

"Barnes & Noble in particular was targeted by Microsoft because it is primarily a bookseller and not an electronics manufacturer, so it has no stable of defensive patents to use against Microsoft."

If that is so, how come the first Android device maker Microsoft sued is Motorola? That company has many thousands of patents, and has indeed asserted 21 of them against Microsoft in various counterclaims and countersuits.

While Barnes & Noble describes itself as a bookseller, financial investors increasingly view it as a mobile device maker because of the success of the Nook e-reader.

Barnes & Noble believes that a "stable of defensive patents" is needed in the mobile device market, and presumably Barnes & Noble held this belief all along but took its chances by entering the market even without a sufficiently strong patent portfolio. That was Barnes & Noble's own business decision. Maybe they thought they'd be the first mobile device maker never to pay patent royalties to anyone. If that's what they thought, it wasn't a realistic assumption. If they knew that patent royalties are simply a cost of doing business in this field, then it doesn't make sense that they now portray royalty demands by patent holders as a fundamental threat to the industry at large.

If it were up to me, software ideas wouldn't be patentable in the first place and companies like Barnes & Noble would never have to defend themselves against software patents. Even in that scenario they would still need to license hardware patents. However, the claim that they don't have a "stable of defensive patents" doesn't look like a realistic approach to the problem. If they want a different intellectual property framework, why didn't I ever see them take any political action to bring about change?

Additional Microsoft patents mentioned in Barnes & Noble's filing

Paragraph 24 of Barnes & Noble's answer talks about the patents that Microsoft offered to license to them:

"The proposed license would have covered the ’372,’780, ’522, ’551, and ’233 patents asserted in this action, along with other previously identified Microsoft patents, including U.S. Patent Nos. 5,579,517 ('the ’517 patent'), 5,652,913 ('the ’913 patent'), 5,758,352 ('the ’352 patent'), 6,791,536 ('the ’536 patent'), and 6,897,853 ('the ’853 patent')."

I have checked on those five patents and saw that four of them were previously asserted by Microsoft against Motorola (in different complaints). One of them is new: U.S. Patent No. 5,652,913 on a "system for providing intercommunication of I/O access factors stored in a shared data structure, accessed and maintained by both file system and device driver."

Broad accusations of anticompetitive conduct

A substantial part of Barnes & Noble's filing focuses on allegations that Microsoft leverages its patents "to render the Android™ Operating System and other open source operating systems uncompetitive and unpalatable vis-à-vis Microsoft’s own operating systems" (quote from paragraph 43 of the answer to the complaint). Two paragraphs later, Barnes & Noble mentions Microsoft's patent agreement with HTC as an example. However, the HTC example clearly contradicts Barnes & Noble's theory of Android becoming "uncompetitive und unpalatable": earlier this month, HTC's market capitalization surpassed that of Nokia (and previously that of RIM). If a patent license deal with Microsoft rendered Android uncompetitively expensive like Barnes & Noble claims, how come HTC is so very profitable?

Another paragraph later, Barnes & Noble mentions that its competitor pays patent royalties to Microsoft. With it's harder to tell how profitable the Kindle business unit is because the company is so diversified, but there are no indications that the need to license patents is driving Amazon out of that particular business.

I'm personally against any anticompetitive abuse of patents. If the way a company uses its patents crosses the line between reasonable monetization efforts and the destruction of legitimate competition, it has to be stopped. But if companies cry foul over allegedly anticompetitive conduct even though a reasonable license deal is proposed, it only becomes harder to make the case when there really is a need to present a competition argument.

The way Barnes & Noble argues just doesn't convince me, at least not at this stage. The broad accusations that Barnes & Noble makes aren't supported by evidence. Some of what Barnes & Noble plans to present may just not be suitable for the public record, such as the exact amount of the royalties Microsoft asked for or the restrictions Microsoft allegedly wanted to impose. However, I've just given some examples of claims that can be controverted just with publicly available information, such as the fact that HTC is doing phenomenally well regardless of a license deal with Microsoft, which makes it hard for me to believe that Microsoft is driving those Android device makers out of business.

If Android ever faces a competitiveness problem because of patents, it's not going to happen because of just one company. There are large corporations like Apple (most recently against Samsung, previously against HTC and Motorola), Microsoft and Oracle asserting their rights in connection with Android; medium-sized ones like Gemalto; and a large and growing number of smaller players. All in all, 41 Android-related infringement suits have been filed already by my count. The combination of all of them is a significant Android cost factor, but as long as software patents exist, companies like Barnes & Noble will have to pay royalties on some of them. That's the name of the game.

Cravath (IBM's primary law firm) working for Barnes & Noble on this case

Barnes & Noble's answer to the complaint was filed by the Seattle-based law firm of Hillis Clark Martin & Peterson in conjunction with Kenyon & Kenyon and, very interestingly, Cravath, Swaine & Moore. New York-based Cravath is closer to IBM than any other law firm (even though some others, such as Quinn Emanuel Urquhart & Sullivan, also do a fair amount of work for Big Blue). Eben Moglen also practiced law at Cravath.

Even though Cravath is mentioned only in the third place, it's possible that they did most of the work on Barnes & Noble's answer to the complaint since it's a much larger firm than the other two and its primary client, IBM, is the world's number one patent bully, so they presumably do a lot of work in connection with patent licensing and litigation.

Next steps

Like I said before, the federal lawsuit could be stayed for the duration of the ITC investigation. I will keep an eye on that one as it unfolds. Having read Barnes & Noble's answer to the federal complaint, I wouldn't be surprised if this was settled well ahead of any trial and if Barnes & Noble only sought sweeter deal terms.

It seems to me that Barnes & Noble tries to be the most unpleasant defendant it possibly can be without bringing an infringement countersuit. Its answer to the federal complaint and also its previously mentioned letter to the ITC smack of mudslinging. It's like they try to show Microsoft that they can say nasty things and try to make Microsoft look very bad. It's similar to what Google tried against Oracle, but even more aggressive and the arguments are even further-fetched. Oracle kept pursuing its strategy nevertheless (and that case may now go on trial before the end of the year). My guess is that Microsoft will also proceed irrespectively of the tone and content of Barnes & Noble's court filings. And as one of the very next steps it will be interesting to see Microsoft's answer to Barnes & Noble's answer to the complaint.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn:

Friday, April 22, 2011

Samsung strikes back at Apple with lawsuits in South Korea, Japan and Germany -- analysis and visualization

A week after Apple's intellectual property infringement suit against Samsung in the US, the South Korean electronics giant has fired back. According to news agency reports (Associated Press, Bloomberg, Dow Jones Newswires, Reuters, Xinhua, Yonhap), Samsung filed three patent infringement lawsuits against Apple, targeting the iPhone and the iPad:

  • a complaint with the Seoul (South Korea) Central District Court over five South Korean patents,

  • a complaint with a court based in Tokyo (Japan) over two Japanese patents, and

  • a complaint with the Landgericht (District Court) of Mannheim (Germany) over three German patents.

The patents "mainly [relate to] power reduction during data transmission, 3G technology for reducing errors during data transmission, and wireless data communication technology."

In its reaction to Apple's suit, Samsung had already announced its intent to respond "actively", which was widely understood to signal the usual action taken by high tech giants in such a situation: countersuits.

I venture to guess that it won't take long before we also see infringement accusations by Samsung against Apple in the US, most likely as counterclaims to Apple's lawsuit in the Northern District of California, and possibly beyond.

I've drawn up a battlemap (for which I recommend full-screen mode):

Apple vs Samsung 11.04.22

The file shown above has five pages: the overview of the current situation; two slides that show the escalation that has occurred until today; and two pages with reference lists. If you are interested in seeing such battlemaps for other smartphone patent disputes, please have a look at my related folder or follow me there (it's a Twitter-like follower system). Or just follow me on Twitter, where I always announce new documents.

Globalization of smartphone patent disputes

It took Apple and Samsung only one week to have parallel lawsuits in four different countries. In the dispute between Apple and Nokia it took more than a year to get to that point.

There's definitely a trend toward globalization. For example, after Ericsson recently sued Chinese electronics giant ZTE in three European countries, ZTE reacted about a week later with a lawsuit in China (a market in which Ericsson generates substantial revenues).

Seoul and Tokyo are new venues in global smartphone patent disputes.

The U.S. District Court for the Northern District of California is already the venue for Oracle's litigation against Google, a case that is intended to go on trial by November. By the way, Oracle's litigators from the firm of Morrison & Foerster, led by Michael Jacobs (who defended Novell against SCO), also represent Apple against Samsung.

The Landgericht (District Court) of Mannheim, Germany, also serves as the venue of another smartphone patent dispute: Nokia and Apple are suing each other there.

It's a safe assumption that Apple will soon make assertions against Samsung in some or all of the countries in which Samsung just sued, and possibly in others. Apple holds smartphone-related patents in many jurisdictions around the globe.

I'll discuss in greater detail some of the strategic reasons for this globalization on another occasion.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn:

Thursday, April 21, 2011

Texas jury finds against Google in Linux patent case, determines damage award of $5,000,000

A jury in the Eastern District of Texas handed a verdict in favor of Bedrock Computer Technologies LLC, determining that Google infringes a Linux-related patent, that the patent is valid, and that Google should pay $5 million for past infringement (through the trial date). The jury took this decision on April 15, 2011, and yesterday (April 20, 2011) the verdict form became accessible via the court's electronic document system.

Google can easily afford $5 million if it has to, but this patent infringement case has major implications for the IT industry in general and for Linux in particular. The plaintiff identified a portion of the Linux kernel as part of the "Accused Instrumentalities". Many companies using Linux have already been required by the patent holder to pay royalties, and many more will now, based on this jury verdict, elect to pay.

At least indirectly, if not directly, this also has ramifications for Google's Linux-based Android mobile operating system, as I'll explain further below. The industry-wide importance of this case is underlined by the fact that Red Hat intervened in this case (because several of its Red Hat Enterprise Linux customers were sued) and filed a declaratory judgment suit with the same court, attempting to have the patent declared invalid.

The infringement accusation and the patent-in-suit

The accused infringement relates to the Linux kernel itself, which is at the core of Google's server farm. The complaint named a long list of allegedly infringing Linux versions, starting with the 2.4.22.x tree all the way to version "2.6.31.x, or versions beyond 2.6.31.x."

The patent-in-suit is U.S. Patent No. 5,893,120 on "methods and apparatus for information storage and retrieval using a hashing technique with external chaining and on-the-fly removal of expired data". Bedrock filed its suit in June 2009 and named Softlayer Technologies, CitiWare Technology Solutions, Google, Yahoo!, MySpace,, PayPal,, AOL and the CME Group as defendants. A couple of those defendants are -- like Bedrock itself -- small entities based in Eastern Texas who may have been named primarily for the purpose of keeping the entire case in that particular court district. It appears that the allegations against Google were the first ones in this suit to go to on trial.

Verdict form

Here's the jury verdict -- I'll explain and comment below the Scribd document viewer:

11-04-15 Verdict Form Bedrock v. Google

The first part means that Google is deemed to infringe claims 1 and 2 of the patent-in-suit. Those claims are:

1. An information storage and retrieval system, the system comprising:

  • a linked list to store and provide access to records stored in a memory of the system, at least some of the records automatically expiring,

  • a record search means utilizing a search key to access the linked list,

  • the record search means including a means for identifying and removing at least some of the expired ones of the records from the linked list when the linked list is accessed, and

  • means, utilizing the record search means, for accessing the linked list and, at the same time, removing at least some of the expired ones of the records in the linked list.

2. The information storage and retrieval system according to claim 1 further including means for dynamically determining maximum number for the record search means to remove in the accessed linked list of records.

The way I interpret these claims, they are more likely to be used on the server than the client side of a network. The data structures in question may also be used by some client-side applications. Whether the infringing Linux code is likely to be used on the client side is a question I have not yet been able to evaluate.

After determining that the patent is infringed by Google, the jury then dismisses Google's invalidity defense and considers $5,000,000 to be an appropriate award for past damages (i.e., for the period ending on the trial date).

As far as those three issues -- infringement, validity, damages -- are concerned, the jury is in charge. The jury is, collectively, the judge on these matters of fact. The judge himself is in charge of matters of law, not of matters of fact. I don't know whether there's any possibility that the judge could decide differently from this particular verdict -- if it's possible, it's at least not too likely.

Evidence standard for invalidity

It's worth noting that Google's invalidity defense failed even though the evidence standard used in this case was preponderance. In the jury instructions, the judge explained that concept to the jury as follows:

"When a party has the burden of proof on any claim or defense by a preponderance of the evidence, that means the evidence must persuade you that that claim or defense is more likely true than not true.

There was a Supreme Court hearing this week on a petition by Microsoft (in the i4i case) to use this evidence standard for the invalidation of patents in such contexts, while i4i wants a substantially higher hurdle (the clear-and-convincing evidence standard) used and has the support of the U.S. government for that.

In other words, Google failed to invalidate the patent even though a more defendant-friendly standard -- the one also advocated by Microsoft -- was used than the one preferred by the US government and the Court of Appeals for the Federal Circuit (CAFC).

Implications for Linux users and distributors

Like I said further above, the question of Google possibly having to pay $5 million (unless the judge decides otherwise or an appeal succeeds) is not really the issue. In addition to money, Bedrock also asked for an injunction, and now that Google has been found to infringe a patent deemed valid by the jury, it remains to be seen whether an injunction will be granted either by this court or on a possible appeal.

The problem is that Bedrock is now in a pretty strong position to collect royalties from other Linux users, especially those utilizing Linux for large server operations.

Red Hat has previously had to pay royalties to patent holders, but in connection with JBoss, not Linux. JBoss is also published under the GNU General Public License. I discussed Red Hat's dealings with "patent trolls" in this blog post. This here may be yet another case in which Red Hat will feel forced to pay patent royalties on GPL'd software, and in this case, on Linux itself.

Implications for Android

Concerning Android, I wouldn't rule out that maybe some of the hundreds of thousands of Android applications out there use the teachings of the infringed patent claims in one way or another. Even if that is not the case, Google might have to modify the Linux kernel it distributes with Android in order to remove the infringing code because otherwise there's always the risk of contributory infringement should any app make use of that portion of the Linux kernel.

More generally, this doesn't bode well for the 41 Android-related patent infringement suits that are going on at this stage. For example, if Google can't defend itself successfully against one patent held by a little non-practicing entity from Texas, what does this mean for Oracle's lawsuit over seven virtual machine patents? This shows that having deep pockets to afford the best lawyers isn't enough. Google's answer to Bedrock's third amended complaint was submitted on February 10, 2011 by the Texas-based firm of Potter Minton and the top-notch global firm of Quinn Emanuel Urquhart & Sullivan, which also defends certain Android device makers (such as Motorola and HTC) against Android-related patent infringement allegations.

Next steps

This jury verdict is an important development and an indication of what will most likely be the decision with respect to Google. But this case as well as Red Hat's parallel declaratory judgment case are not yet finished, and maybe there will be an appeal. I guess Bedrock will be quite successful in the meantime working out license deals with Linux users and distributors. In Red Hat's case, Bedrock made third-party counterclaims against alleged infringers, and a couple of them settled with Bedrock, quite likely by paying royalties. It seems that Bedrock is sitting on a patent gold mine and likely to make a fortune, thanks to the patent system on the one hand and the Linux kernel on the other hand.

I will follow further developments in connection with this patent and report again if anything significant happens. What has happened already is, without a doubt, highly significant.

Finally, I'd like to thank Docket Navigator for making me aware of this jury verdict. They offer a great service.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn:

Wednesday, April 20, 2011

US Department of Justice announces modified Novell patent deal

The United States Department of Justice (DoJ) just announced that a deal that originally envisioned the sale of 882 Novell patents has been modified in order to address its concerns. The DoJ also announced close cooperation in this regard with Germany's Federal Cartel Office (FCO; German name: "Bundeskartellamt").

[Update] The German FCO made an announcement of its clearance decision that is materially consistent with the DoJ's announcement. [/Update]

In formal terms, the DoJ's work is not yet finished: its Deputy Assistant Attorney General Sharis Pozen said that "the department will continue to investigate the distribution of patents to ensure continued competition." But in practical terms, this looks like a done deal, and Novell's stock price is now only a hair's breadth below the $6.10 per-share price to be paid by Attachmate, the acquirer of Novell as a company.

[Update 2 on Apr 21] Novell's latest SEC filing just announced that the formal consummation of the patent deal as well as Novell's acquisition is now scheduled for April 27, 2011. Apparently that will be the date barring any unforeseeable events. [/Update 2]

The announcement by the DoJ essentially reaffirms what I blogged about two weeks ago with only smaller changes:

  • The DoJ refers to "approximately 882 patents". A Novell SEC filing revealed a few months ago that there was some disagreement resulting from the fact that Novell originally listed some patent applications that were withdrawn or rejected. There were talks between the parties about whether to replace those assets with others, or whether to adjust the price. The word "approximately" suggests that the number may have changed, or may still change, but only slightly in all likelihood.

  • There are 33 (not 31 as originally announced by the OSI) virtualization-related patents that EMC won't get to acquire.

  • The fact that Microsoft will effectively sell back its allotment of patents is not new. The DoJ's announcement just makes it clearer than the OSI's recent statement that Microsoft is granted a license to all of the patents changing hands (including the roughly 200 patents that Microsoft will own temporarily) as well as "any patents retained by Novell." Considering that Microsoft for hundreds of new patents every month, it seems obvious that they don't have to acquire a couple hundred Novell patents in order to beef up their own patent portfolio. By contrast, Google with its relatively small portfolio would have benefited from such an acquisition in a more significant way, relatively speaking.

  • The DoJ mentions some provisions according to which CPTN Holdings LLC and its owners (Apple, EMC, Microsoft, Oracle) won't be allowed to interfere with Novell's relationship with and commitments to the Open Invention Network. In other words, after the acquisition it will be the prerogative of Attachmate (Novell's acquirer) to make a determination concerning Novell's post-acquisition relationship with the OIN. Maybe the original agreements stipulated that Novell would leave the OIN, or maybe there wasn't any such provision but the DoJ was afraid of the patent deal affecting Novell's partnership with the OIN. In my opinion, the flood of patent lawsuits especially in the smartphone space shows that the OIN doesn't deter anyone from asserting patents against Linux and Linux derivatives like Android. Therefore, whether or not Novell continues to be an OIN member doesn't matter too much.

  • There's one item in the DoJ's announcement that isn't clear without knowing the details:

    "All of the Novell patents will be acquired subject to the GNU General Public License, Version 2, a widely adopted open-source license, and the Open Invention Network (OIN) License, a significant license for the Linux System"

    Novell made some commitments "subject to" the GPL and the OIN license in the past. It's not clear to me inhowfar the DoJ imposed anything new on Novell or any of the acquirers beyond already existing obligations.

    In its criticism of the deal, the OSI, FSF and others claimed (not for the first time) that they believe the GPL is incompatible with obligations to pay patent royalties. However, the DoJ's announcement doesn't necessarily say that the acquirers of those patents are now required to make those patents available on royalty-free terms to publishers, distributors or users of GPL'd software.

    My guess is that the DoJ didn't support those claims by OSI and FSF that royalty-free is the only GPL-compatible option, just like the European Commission also found that royalty-bearing patent license deals can be structured in open source-compatible ways. In other words, some royalty-bearing deals may not work for open source, but others do. Per-unit royalties could be difficult given the way open source software is shared, but fixed royalty amounts or royalties relative to a company's revenues are possibilities.

    There's a perfect example of patent royalties that were paid on software distributed under the GPL: Red Hat's $4.2M FireStar settlement, which is mostly a patent license deal (just with additional provisions to withdraw a lawsuit). In Eben Moglen's opinion, the related deal would have been compatible even with the GPLv3. I assume that such GPL-compatible patent license deals would still be a perfectly valid option for the companies acquiring those Novell patents if they find GPL'd software to infringe any of those patents. But I don't know what exactly the revised patent purchase agreement stipulates (except for what the DoJ just announced, which is vague).

If any additional details become known, then there may be more clarity concerning the "subject to" language. For now this is all a bit speculative. It also remains to be seen inhowfar the regulatory intervention in this case could backfire on some of the complainants should similar issues ever come up in connection with the aforementioned OIN. Regulators didn't seem to care much about the secondary market of patents in the past. They apparently raised concerns (whether or not those would have been defensible in court is another question) in this case, and who knows what questions may come up in connection with the sale of Nortel's patent portfolio.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn:

Hybrid Audio LLC now also sues Motorola, Nokia, RIM, Samsung in addition to Apple, HTC, Dell (already sued in December)

After Apple's patent infringement lawsuit against Samsung, there are already a couple of other developments on the Android-related patent litigation front.

For the sake of a complete record, let me mention that the ITC announced yesterday that it is investigating Microsoft's complaint against Barnes & Noble, FoxConn and Inventec. The investigation number is 337-TA-769. I will follow the process. This vote comes as little surprise. The previous smartphone-related ITC complaints I saw also resulted in formal investigations.

In December I reported on Hybrid Audio LLC's patent infringement lawsuit against HTC, Apple and Dell over U.S. Patent No. RE 40,281 on "signal processing utilizing a tree-structured array". Yesterday, Hybrid Audio LLC basically expanded its suit by naming additional defendants. In order to do so,

  • Hybrid Audio LLC filed for voluntary dismissal without prejudice of its original suit (case no. 6:10-cv-00677, Eastern District of Texas; at that point, the defendants had not yet responded to the complaint or moved to dismiss or transfer it), and

  • filed a new suit (case no. 6:11-cv-00195, same federal court) over the same patent but with a longer list of defendants and, consequently, infringement accusations.

These are the additional defendants and the products named as examples of allegedly infringing devices:

  • Motorola Mobility:
    "Xoom, Atrix, Droid 2, and Droix X"
    (all of those are Android-based)

  • Nokia (two legal entities):
    "5610 XpressMusic, 6650, 6133, 5310 XpressMusic, E7, and 6275i"

  • Research in Motion (two legal entities):
    "the BlackBerry smartphones"

  • Samsung (three legal entities):
    "R0, R1, P3, U5, S3, S5, and Q2 MP3 Players, Messager Cell Phone, JetSet Cell Phone, t249 Cell Phone, DVD Players, and Digital Photo Frames"
    (while those aren't Android-based, a settlement with Samsung would most likely also include any infringing Android-based Samsung products, and if Hybrid Audio proved infringement by Android-based devices in connection with HTC and/or Motorola, even a ruling may effectively affect Samsung's Android devices; otherwise, it would be easy for Hybrid Audio to launch a follow-on suit if necessary)

So Hybrid Audio LLC decided to take on some additional behemoths. I in my post on Hybrid Audio's original suit back in December I discussed that company's background and the patent in more detail than in this post, which is intended to be just a little update.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn:

Tuesday, April 19, 2011

Apple sues Samsung over Android-based devices -- Samsung virtually certain to retaliate

[updated after obtaining complaint]

Apple is waging an all-out patent war on anything Android. After suing HTC about a year ago and Motorola last fall, Apple has now pointed its legal guns at Samsung. On Friday (April 15, 2011), it filed an infringement suit with the US District Court for the Northern District of California, Oakland Division, case no. 11-cv-01846. Not only is this significant because it's a much bigger company than HTC and Motorola combined but it's particularly remarkable since Samsung is one of Apple's key suppliers of hardware components.

Also, Samsung is a major patent holder. Bloomberg quotes a Samsung spokesman as saying that "Samsung will respond actively to this legal action taken against" the Korean company. The Malaysian National News Agency (Bernama) reports that another Samsung spokesman said over the phone that they believe "Apple has violated [Samsung] patents in communications standards" and that Samsung is "considering a counterclaim." In my opinion, it's a foregone conclusion that Samsung will countersue.

When I was asked in recent months whether Samsung's status as a major supplier was a reason for which it had not yet been sued by Apple, my answer was that this probably played a role but I expected Apple to assert its rights against Samsung sooner or later. However, I thought that Apple was firstly going to make some headway against HTC and Motorola. Instead, Apple's suit against Samsung came before Apple obtained a ruling against any other Android device makers, and became known on the very day on which the ITC staff said at a hearing on Apple's complaint against HTC that it doesn't believe any of Apple's asserted patents are infringed.

Anything Android is Apple's mortal enemy

By going against Samsung, Apple clearly demonstrates its absolute determination to fight "anything Android". It looks like Steve Jobs would even be prepared to sue a member of his family should any of his kins decide to build Android-based devices.

Tomorrow (Apr 20, 2011) Apple will announce its latest earnings, and yesterday its stock price temporarily dipped into negative territory on a year-to-date basis. Even though Apple appears to be generating huge sales these days, the stock market has fallen out of love with it to some extent. Besides uncertainty over succession I would mostly attribute this to the fundamental threat Android represents to Apple's revenues and margins.

Considering how much Apple's prospects depends on fending off the Android threat, one can argue that Apple would have assert its intellectual property rights even more aggressively from a shareholder value perspective. For instance, I think Apple went after HTC somewhat half-heartedly. A year ago Apple asserted 10 patents against HTC in an ITC complaint, and that one isn't on the winning track for now (though things can still change). Usually, companies file companion federal lawsuits that mirror their ITC complaints. Apple didn't do that but instead asserted 12 other patents against HTC in Delaware. And Apple actually has many more patents that read on Android. I believe they could easily have sued HTC over another 10 or 20 patents -- or more.

I believe Apple's management would -- from a shareholder value point of view -- be well-advised to work out a settlement with Nokia sooner rather than later (even though I guess Apple would end up a net payer in such a deal since Nokia owns many more patents in this field) and to focus entirely on Android. It's not hard to imagine a competitive landscape in which both Apple and Nokia can prosper in parallel. But if Apple fails to fend off Android, it will within a year or two find itself in a situation like that of Research in Motion, even if at a higher level (initially...). Apple has realized this already, as its new lawsuit against Samsung shows, but given what's at stake, I think Apple would have to do much more than this. It would have to sue more Android device makers and over more patents.

I also wonder whether Apple may now become a more aggressive bidder for Nortel's 4G patents. It may not view them as mission-critical, but it sits on a $60 billion mountain of cash and can outbid Google or anyone else if it wants. The Motley Fool published an article by Christian Zibreg, who very convincingly argues that Apple should go for Nortel's patents and "seek royalties from everyone else in the industry."

If Apple doesn't act aggressively enough to prevail over a patent dwarf like HTC and to outbid Google, this may at some point raise a leadership question... possibly at a point when it will already be too late to undo the losses experienced by Apple's shareholders.

Again, to be clear, all of what I just said was purely an analysis from a shareholder value angle. My political preference would be for all companies including Apple to advocate the abolition of software patents, but it's not realistic to expect that of an organization that currently has a market capitalization of more than $300 billion that could be contracted to a fraction of that number only because of Android.

Accused products and asserted IPRs

The accused products include "the Samsung Captivate, Continuum, Vibrant, Galaxy S 4G, Epic 4G, Indulge, Mesmerize, Showcase, Fascinate, Nexus S, Gem, Transform, Intercept, and Acclaim smart phones and the Samsung Galaxy Tab tablet."

Apple alleges that Samsung's Android-based devices are iPhone/iPad knock-off products:

"Instead of pursuing independent product development, Samsung has chosen to slavishly copy Apple's innovative technology, distinctive user interfaces, and elegant and distinctive product and packaging design, in violation of Apple's valuable intellectual property rights"

Reuters reports that "Apple's bringing 16 claims against Samsung, including unjust enrichment, trademark infringement and 10 patent claims."

I have meanwhile obtained Apple's complaint, which lists different categories of infringed IPRs:

So this infringement suit is about the "look & feel" of Samsung's Android-based products, which is indeed strikingly similar to that of the iPhone and iPad, as well as certain technological features. I will follow this dispute as it evolves.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn:

Monday, April 18, 2011

ITC staff advocates dismissal of Apple's allegations against HTC and (with respect to one remaining patent) Nokia

Bloomberg's patent expert Susan Decker went to today's beginning of the hearing in ITC investigation no. 337-TA-710 (Apple vs. HTC and, concerning one of the patents, Nokia) and found out that the Office of Unfair Import Investigations (OUII), an ITC department that acts on behalf of the public as a third party in most ITC cases, believes HTC and Nokia "shouldn't be found liable of infringing [Apple]'s [asserted] patents."

Let me put this into perspective:

  • The staff opinion is not a decision. It's a recommendation that bears some weight -- nothing more, nothing less. I already explained this in November when it became known that the ITC staff also issued a negative recommendation concerning four patents Apple asserted against Nokia (and not simultaneously against HTC).

  • Generally speaking, ITC investigations are sometimes like roller coaster rides. The staff opinion isn't binding on the administrative law judge (ALJ) to whom a case is assigned, and the ALJ's "final initial determination" can be reviewed and overturned by the Commission, i.e., the six officials at the top of the ITC. I explained this recently (after an ALJ issued a final initial determination against Nokia's claims against Apple, and after the Commission decided to review a final initial determination against Kodak's claims against Apple and RIM).

  • Even though nothing is final until the Commission decides, there's a consistent pattern so far in Apple's disputes with Nokia and HTC: at this stage, none of the complaints is on the winning track. This may make other smartphone players think twice before filing ITC complaints. While the ITC is considered a fast track to an injunction-like decision (an import ban), it looks like a tough place in which to assert smartphone patents. Companies may now incresaingly expect more favorable outcomes if they sue only in US district courts (and in European courts, which is the case in the Apple/Nokia dispute).

  • Apple's ITC complaint against HTC (accusing its Android-based phones of infringement) initially related to 10 patents. In October, Apple dropped 4 of those; in October, it dropped another. The staff recommendation that became known today relates to the 5 remaining patents-in-suit (U.S. Patents 5,481,721; 6,275,983; 5,566,337; 5,946,647; 6,343,263).

  • One of those 5 patents is also asserted against Nokia. There is also a separate investigation (no. 337-TA-704) in which Apple asserts other patents against Nokia; I mentioned before that the ITC staff also viewed those claims negatively. As far as Nokia is concerned, today's recommendation relates only to U.S. Patent No. 6,343,263 on a "real-time signal processing system for serially transmitted data".

  • Last month Nokia filed a second ITC complaint against Apple over 7 patents.

  • Next month there will be a hearing on HTC's complaint against Apple. I would be surprised if HTC succeeded. The patents-in-suit didn't look particularly strong to me. Even if Apple infringed them, they look like patents one can engineer around with limited effort.

  • Apple is also asserting 12 patents against HTC in the US District Court for the District of Delaware. For details see my visualization and reference lists (contained in this PDF document). Those 12 patents are different from the ones Apple asserted against HTC in its ITC complaint.

The bottom line: Apple's fight against Android continues, and so does the huge dispute between Apple and Nokia. The ITC looks ever less likely to agree with the related complaints, but things can still change. If there's no trend reversal, the focus will shift to certain US district courts and European courts...

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn:

Friday, April 15, 2011

Korean search engines Naver and Daum file antitrust complaint over restrictions Google imposes on Android device makers

According to Dow Jones Newswires, NHN Corp. -- the owner of Naver, the market-leading Korean search engine by revenue -- and Daum Communications Corp. (the number two) lodged an antitrust complaint today with South Korea's Fair Trade Commission (FTC) against Google. The two complainants believe Google violates South Korean competition rules by "restricting local mobile service providers and Android smartphone manufacturers from pre-loading some mobile search portals, including the two Korean search portals, on smartphones."

According to the Dow Jones report, a Google spokesperson claimed that "Android is an open platform and carrier partners are free to decide which applications and services to include on their Android phones." But in my opinion it's perfectly clear that Android is not open, and Google's partners are not free to choose applications and services. Today's antitrust complaint in Korea is just the latest indication of many for Android's non-openness. Here are the most important examples (in no particular order):

  • I previously reported on Skyhook's two lawsuits against Google. One of them is about Google's restrictive practices. When Motorola and Samsung wanted to ship Skyhook's location-positioning software with their Android devices, Google explained to them that its Android licensing rules don't allow them to do that. Xconomy recently interviewed Skyhook's CEO. The Dow Jones report on today's Korean antitrust complaint also mentions the Skyhook case.

  • In its litigation with Google, Oracle told the court about how Google limits the choice of Android device makers.

  • The Register's Cade Metz discovered an interesting article in the IEEE's Computing Now magazine, in which two Google engineering directors affirmatively say that Android and Chrome "are both open and closed depending on business needs at any given time."

  • Google decided not to publish the source code of Android version 3.0, codenamed Honeycomb, for the time being. Only select device makers are allowed to ship Honeycomb-based products now.

  • Yesterday Google held its quarterly earnings call, and as ZDNet's Larry Dignan reports, Google CFO Patrick Pichette told investors that "everybody that uses Chrome is a guaranteed locked-in user for [Google's search engine and other services]." That's also the case with Android. It's practically impossible for the average user to set another default search engine than Google on an Android-based device. Interestingly, Google always argues in antitrust contexts that its competition is just one click away. That claim is debatable for various reasons, but with Android and Chrome there can't even be a debate: it's just wrong in those contexts.

I don't know much about the South Korean market and nothing about South Korean competition law. Therefore I can't say whether today's antitrust complaint is likely to succeed. Also, the Korea Herald reported on this initiative two days ago (when the exact timing of the complaint was not yet known) and mentions that NHN (Naver) and Daum have both been accused by smaller local competitors of engaging in anticompetitive practices.

That said, there can be no doubt that Google controls Android in a way that runs counter to its claims of openness, and that Google's business model is all about lock-in, just like the business models of other dominant companies. It would be naïve to believe otherwise.

In terms of pursuing a lock-in, they aren't better than others. There are two respects in which Google's pursuit of a monopoly is different from that of comparable companies:

  • Google disregards other companies' intellectual property rights to an unprecedented extent. This week, the 40th Android-related patent infringement suit was filed (one of the Walker Digital suits accuses Android among other platforms) in only about 14 months.

  • Google exploits open source software like no other company ever did in pursuit of a lock-in. There are some hypocrites whose core businesses are also about lock-in but they use open source as a pretext in political debates, such as for demanding royalty-free access to intellectual property. Their core businesses are, however, based on proprietary technologies, while Google develops "open source" software for the purpose of locking users in.

This week a data privacy blogger asked whether Google is "cruising towards a legal meltdown." That metaphor sounds dramatic, but there's no doubt that Google faces a number of problems in connection with intellectual property rights, competition rules, and data privacy.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn:

Wednesday, April 13, 2011

RIM's PlayBook tablet raises Android IP questions

Tomorrow (Thursday, April 14), Research In Motion ("RIM") will demo its PlayBook tablet computer to select journalists. The media reports I saw in the build up to its launch mostly express skepticism concerning the market share the PlayBook will be able to attain, but it may nevertheless be bought by a few million BlackBerry loyalists. The aspect of the PlayBook I'm most interested in is its ability to execute Android applications. That feature raises some intellectual property questions that transcend the BlackBerry PlayBook.

In a press release quoted by BusinessInsider and other media, RIM said the following about the PlayBook:

"RIM will launch two optional 'app players' that provide an application run-time environment for BlackBerry Java® apps and Android v2.3 apps. These new app players will allow users to download BlackBerry Java apps and Android apps from BlackBerry App World and run them on their BlackBerry PlayBook."

A marketing-driven decision that won't pay off for RIM

Note that the emulation of Android on the PlayBook will only relate to Android version 2.3 (Gingerbread). However, those apps are typically optimized only for smartphones, not tablets -- for tablet apps, developers would write for Android version 3.0 (Honeycomb, the one that became known for Google's blatant non-compliance with open source principles). At this stage there aren't many Honeycomb apps, but if Android developers want to optimize for tablets, they'll likely create Honeycomb versions of their software.

So this is going to be of very limited practical use to its customers because the apps they get were developed for a completely different form factor. This is the kind of decision that some marketing-oriented executives tend to take when they just look for a shortcut that allows them to respond to an objection that something is lacking. Speaking from a quarter century of experience in this industry, those decisions are a sign of desperation and almost always fail to produce the desired results. Most of the time, those measures are actually counterproductive and serve to accelerate a company's decline.

In this case, BlackBerry's decision-makers know that their biggest strategic issue -- thus the #1 objection they face from journalists, carriers and retailers -- is that this industry is now all about ecosystems. RIM boasts relationships with 500 carriers or so around the globe -- but that's a result of a glorious past and not an assurance of a bright future because many of those partners have already placed significant bets on other platforms. As a platform for apps, BlackBerry is hopelessly behind Apple's iOS and Google's Android, and at this stage the most promising platform coming from behind is Windows Phone 7. This article -- published about a month ago -- offers the following prediction:

"However if Microsoft's app store continues to grow at its current momentum of 3,000 new apps every month, we could witness Windows Phone 7 stealing the bronze away from Blackberry in about 6 months (if not sooner)."

I guess that trend is due to the combination of the Nokia-Microsoft partnership, Microsoft's huge developer base (even if most of those programmers didn't develop for Windows Phone in the past, ever more of them are looking at WP7), and the fact that Microsoft is always a force to be reckoned with (its Xbox game console also took time to succeed but is now outselling its competitors in key markets).

By contrast, there's now a serious risk that going forward RIM will basically just serve the most loyal part of its customer base, which will erode by the day. The launch of the PlayBook may be RIM's last chance to counter that trend, and since it is such a critical mission for that company, its leadership apparently thought it was a very smart move to provide some kind of compatibility with (pre-Honeycomb) Android apps. They can now claim that their product is capable of running a vast number of different apps, which is theoretically true although pointless and misguided in practical terms.

Those marketing tricks rarely worked out in the past, and in today's environment, in which word-of-mouth is a more powerful force than ever, this just won't work. They can run their company that way -- it's the only North American company I've ever seen to have two CEOs, so maybe they also need two app run-time environments. They just can't deliver a superior user experience without native and tablet-optimized apps. Nevertheless the intellectual property questions this approach raises are interesting and important. They will likely also come up, in one way or another, in connection with other devices than the PlayBook.

Does RIM have a license to run Android apps -- and from whom?

On March 30, 2011, I sent RIM's PR agency several questions about the licensing situation concerning Android apps on the PlayBook. I didn't get any answer. Oher companies (including MPEGLA) have in the past responded to my inquiries, so I believe they just didn't want to comment on the licensing situation. Under the circumstances I'll just share my views on what I consider to be likely possibilities.

It's pretty certain that RIM doesn't have any deal in place for this with Google. RIM doesn't use the Google or Android trademarks in a way for which it would need a license. It will offer apps through its own app store (as the press released quote further above indicated), not the official Android Market. And even if the platform was 100% compatible with Android (which it probably isn't anyway, considering that developers must recompile their Android apps for the PlayBook), I guess Google wouldn't certify the PlayBook as an Android device since it's essentially a different system, even if it can run Android apps.

If Google owned any patents that it could assert against RIM, it might decide not to do so until emulators like the one provided by the PlayBook materially adversely affect Android's market share. But I doubt Google even owns any such IP since Android's app platform is much more of a rip-off than a result of original innovation. If anyone owns patents that RIM would have to fear, it's probably Oracle, which is suing Google over seven virtual machine patents allegedly infringed by Android's Dalvik component, and possibly Gemalto, which is suing Google, Samsung, Motorola and HTC over closely related patents.

RIM has a Java license deal in place with Oracle for the BlackBerry platform. Java is the primary programming language for native BlackBerry apps.

I have no doubt that RIM is already paying Oracle a license fee for each BlackBerry device, including the upcoming PlayBook. However, a Java license doesn't mean that a company is free to use any of Oracle's virtual machine patents any way it pleases. Those licenses come with clear field-of-use restrictions and compatibility requirements. I strongly doubt that a standard Java license would allow BlackBerry to sell on the same device, besides its certified Java app platform for native BlackBerry apps, an Android emulator that infringes any of Oracle's patents.

RIM's Java license deal with Oracle

I wish RIM's PR agency had responded to my questions so I wouldn't have to speculate here. Without their answers, I can imagine different approaches taken by Oracle. One possibility is that RIM contacted Oracle beforehand and received permission to do this, with or without having to pay a premium royalty for each PlayBook unit. This kind of arrangement would make sense if Oracle considered RIM a valued customer (in terms of a Java licensee) and determined that the emulation of Android apps on the PlayBook isn't going to pose a serious threat to Oracle's control over Java.

Oracle would not want to create a precedent that Google can use against it in their litigation, but it might have structured its agreement with RIM in a way that prevents such negative effects. For example, it's fairly possible that RIM promised to Oracle to respect its control over Java and make any technical changes to its app platform that a possible settlement between Oracle and Google may also impose on Google. Such a promise wouldn't hurt RIM because all they want to be is Android-compatible, so if Android itself has to change, RIM's Android emulator will have to change accordingly at any rate.

I doubt that RIM did this without discussing it with Oracle at least on an informal basis. RIM knows what it's like to be sued for patent infringement and face an impending shutdown of its system. RIM also needs to continue to work with Oracle because of its Java license for native BlackBerry apps. Therefore, I don't think RIM takes any chances of being sued by Oracle over this: if things came to worst, RIM could lose its Java license.

RIM may, however, take its chances in connnection with third-party claims, such as by Gemalto. The BlackBerry company may ultimately find that emulating Android gets more expensive than anticipated. Since RIM presumably views its Android emulator only as a temporary crutch, it's possible that RIM doesn't care today about whether it may lose a lawsuit a few years down the road. By then RIM probably hopes to have enough native PlayBook apps to no longer need its Android emulation. And given market dynamics, it's also possible that RIM will no longer be an independent company at that stage.

Whatever the licensing situation is, it's really absurd that a company like RIM that makes Android apps run on its platform doesn't have to worry about intellectual property rights held by the maker of Android, Google, but must clear those rights with third parties like Oracle and Gemalto. It's yet another indication of intellectual property being Google's number one strategic weakness.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Share with other professionals via LinkedIn: