Monday, October 8, 2012

Google's Motorola Mobility pulls all Android devices from German market after patent rulings

The company that Google bought for $12.5 billion to protect Android from patent threats cannot even protect itself.

Areamobile, a high-quality German news website focused on wireless communications devices, reports today (in an article that also mentions last Friday's ruling) that German customers face a "heavily-shrunk" choice of Android-based Motorola smartphones. I had previously heard something similar from a news agency reporter who is following some of the German Android-related lawsuits. Areamobile noted that Motorola Mobility's German website lists only three smartphones -- and no tablet computer. I ran a search there, and indeed, the list is down to the Motorola Razr i, Motorola Razr MHD, and Motorola GLEAM offerings in the "Mobiltelefone" section, and the "Android tablets" page delivers "no results".

The Razr i and Razr HD aren't even available yet in Germany according to leading German IT news site, which describes the only actually available device promoted on that page, the Motorola GLEAM, as a "simple" phone. According to a CNET review, the Gleam has a proprietary operating system (thanks to Jon Fingas for informing me of this fact on Twitter). This means Motorola Mobility is currently selling no Android devices in Germany. Zero.

Some additional devices, including the XOOM 2 tablet, are shown on the start page of Motorola Mobility's German-language website. I clicked on the XOOM 2 and was directed to a page that says: "devices not available in Germany -- updated devices [to become] available at the end of July". Here's a screenshot of the relevant part of the page (click o the image to enlarge):

Well, the end of July was more than two months -- and a few patent rulings -- back...

Areamobile contacted a Motorola Mobility PR agency or spokesman (not clear from the article) who said that the operating software of older Razr smartphones and Xoom tablets was being "reworked at the moment" and would soon become available again in this country.

Let there be no doubt: in the age of over-the-air updates and Internet downloads, companies continue to sell their devices if all they plan to do is a routine update. If a company identified a huge security issue in its operating software, it would fix that one quickly (a matter of days or weeks) and then resume its sales. But Motorola Mobility's website shows that the company announced months ago that it would again offer the devices it pulled at the moment, and it still hasn't been able to do so. Much to the contrary, it appears to have pulled even more gadgets from its German catalog.

The original announcement to put those devices back at the end of July was too optimistic. But just when Motorola apparently wanted to resume its German sales (end of July), Microsoft won a second German patent injunction against the Google subsidiary, and last month it won a third, which I consider to be its most powerful one to date. The first one had already come down in May (a week after Microsoft also won a U.S. import ban). Apple previously won injunctions against Motorola Mobility in Germany in February and March, and a third one in September.

It appears that Google as a whole is struggling to keep up with the fast-growing number of Android-related patent infringements identified by courts in the United States, Europe and Asia. Google engineers probably have to spend a significant part of their time now on workarounds. And in some cases, workarounds would result in incompatibilities with many (or even all) existing Android apps. In order to keep selling in Germany, where patent enforcement is fast and furious, Motorola Mobility would probably have to ask third-party Android app developers to create special German versions of their apps to avoid the infringements that the courts in Munich (five injunctions) and Mannheim (one injunction) decided to end.

But to be clear, now-Google-owned Motorola Mobility is not a victim. It was Motorola Mobility's choice in the spring of 2011 to sue Apple in Mannheim before Apple filed any lawsuit against it outside the United States, and to sue Microsoft in Mannheim in the summer of 2011, also before Microsoft filed any non-U.S. lawsuit against it. Motorola Mobility was trying to take advantage of the fact that injunctions are routinely granted in Germany -- and of German case law relating to standard-essential patents. For the same reason, Samsung also sued Apple in Germany before Apple brought any German litigation against Samsung. And Samsung has not won anything against Apple in this country to date.

Motorola Mobility won a few German rulings before it started to taste its own medicine. Even if one doesn't count a default judgment that was entered in November 2011 after a no-show by Apple's lawyers, Motorola won the first non-preliminary injunction in the current wave of smartphone patent disputes (in Mannheim in early December 2011 over a standard-essential cellular patent), and a second injunction against Apple in early February over a push notification patent. It enforced both injunctions at the earliest opportunity, resulting in the temporary removal (for about a day) of several Apple products from Apple's German online store. As we speak, German Apple customers still don't get push notifications when they receive new emails via the iCloud. And in early May, Motorola Mobility won a couple of Mannheim injunctions over H.264-related patents against Microsoft, targeting Windows and the Xbox. But Motorola had to backtrack against Apple with respect to wireless standard-essential patents and never got to enforce anything against Microsoft. In a September 28 post I explained that the entire Android camp is presently enforcing only one patent against Apple (the push notification patent) and none against Microsoft. Later that day, a U.S. appeals court affirmed a district court's decision to bar Motorola from enforcing those Mannheim H.264 injunctions against Microsoft. That said, Motorola Mobility started it all as far as litigation in Germany is concerned. Motorola won the race to the courthouse against Apple in the U.S. as well. Motorola was hoping to do serious damage to Apple and Microsoft in Germany, but while Apple and Microsoft are still selling all of their products in this market, Motorola Mobility has nothing to offer but a vague promise to resume its sales. It already promised to do so by late July, as its German website proves.

Not only did Motorola fire the first German shot at Apple as well as at Microsoft. It's also the only major Android device maker to have refused to take a royalty-bearing Android patent license from Microsoft. Every time Microsoft wins a German case, or even when it doesn't win, it reiterates its desire to grant Motorola Mobility a patent license of the kind that Samsung, HTC, LG (reportedly Google's next Nexus partner) and many others already have signed up to.

Motorola Mobility never had a huge market share in Germany, but this is a major market in which Android is very popular. I'm sure that Motorola Mobility wouldn't be doing what it's doing if it was an independent company. In that case, its course of action would certainly be criticized by shareholders. But today Motorola Mobility has only one shareholder, Google. And Google apparently prefers to limit choice for German consumers over a settlement on commercially reasonable terms that most of the industry has already validated. I doubt that this is the best choice for the Android ecosystem, for German consumers, for Google, and for Motorola Mobility (which is, I regret to mention, in the process of laying off even more workers).

Google should also ask itself whether a withdrawal from the German market is the best way to win the confidence of third-party Android OEMs in the intellectual property situation surrounding that platform. Apparently all of the prior art Google chairman Eric Schmidt recently mentioned in Korea isn't as good as Google thinks. German courts don't order injunctions if they see a high probability (80% or more) of a patent being invalidated in a parallel nullity action.

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