On the eve of the fifth anniversary of the first Microsoft v. Motorola lawsuit, Google and Microsoft issued the following joint statement to the press:
"Microsoft and Google are pleased to announce an agreement on patent issues. As part of the agreement, the companies will dismiss all pending patent infringement litigation between them, including cases related to Motorola Mobility. Separately, Google and Microsoft have agreed to collaborate on certain patent matters and anticipate working together in other areas in the future to benefit our customers."
There's nothing in it that would suggest Microsoft made any headway in five years of suing. This one is structurally reminiscent of the second-class settlement Google reached with Apple last year from a position of mutual weakness: neither do Android's enemies hold patents that would represent a serious threat to the world's most widely-distributed mobile operating system nor are the patents for which Google bought Motorola powerful enough to force Apple or Microsoft into a cross-license covering the entire Android ecosystem.
In boxing, the champion retains the title if a bout ends in a draw. Considering the facts surrounding this litigation, there can be no doubt that this is great for Google and disappointing for Microsoft (though things could always be worse). The biggest winners in this are the Quinn Emanuel lawyers who represented Google/Motorola against Microsoft in the U.S. (led by Charles Verhoeven) and Germany (Dr. Marcus Grosch).
Android is and remains the new Windows:
You will find more statistics at Statista
In 2010, Google's market capitalization was $180 billion, while Microsoft's was approximately $250 billion. Now, Microsoft's market cap is $350 billion (an increase by 40%, mostly the "Nadella effect"), while Google's (now "Alphabet's") market cap is almost $420 billion (an increase by 130%).
Microsoft has the industry's best IP licensing team and is generating billions of dollars per year in Android patent licenses. The patent stalemate between Microsoft and Google won't entitle any of Google's partners to a refund. But Google always discouraged Android OEMs from paying Microsoft. Google told them: defend yourselves, we'll help you. If some companies were just too small to pick a fight with Microsoft, they don't matter to Google anyway. If some of the bigger ones backed down, maybe in part because they had longstanding partnerships with Microsoft, they can't blame Google. If it had been up to Google, everyone would have "done a Motorola."
I absolutely agree with analysts who view this agreement between Microsoft and Google as a sign of Microsoft's attitude toward competitors being fundamentally different under its new CEO than under Steve Ballmer and, previously, Bill Gates. Microsoft is now happy to operate cloud services that power Apple's iCloud as well as numerous iOS and Android apps (including some of the most significant ones), and Azure is great based on everything I hear from competent sources. Microsoft now also contents itself with being a third-party ISV (independent software vendor) for Android and iOS. And, who knows, maybe Microsoft will be increasingly patent reform-friendly, now that its senior management has experienced in the fight with Google that patents are not the answer.
Microsoft's most noteworthy achievement in the patent dispute with Google was that it gave meaning to FRAND (contradicting positions it had still communicated to the FTC almost a year after the first Motorola lawsuit). That's a victory for reasonableness, but not a strategic win for Microsoft over Google: by now, Google is just as interested in low SEP royalties as Microsoft. There was a time when Motorola and its acquirer Google thought they needed to get leverage from SEPs, but after half a decade it's clear that Google would have had a sufficiently strong defense even without a SEP offense.
Five years ago to the day, when Microsoft sued Motorola after Apple had sued HTC and Oracle had sued Google, I thought that the smartphone patent wars were going to last 12-18, if not 24 months, and through this blog I strategically occupied the niche of smartphone patent litigation coverage. By now, I'm no longer really interested in smartphone patents. A year ago I published statistics that show the negligible impact of those cases.
The only smartphone patent case that still matters is actually, by now, a copyright case: Oracle v. Google. I'll keep an eye on that one until the end because it's about an issue that I as a software developer care about a great deal. And after a lot of idiotic, unjustified bashing that I took in a 2012 shitstorm following an erroneous court decision that the Federal Circuit overruled and the Supreme Court declined to reinstate, that case has also become a personal matter for me. It's the only context right now in which I fundamentally disagree with Google.
I'll do only a very limited amount of patent litigation blogging this quarter, and won't do any of that next year, no matter who sues whom or who settles with whom. Again, Oracle v. Google is a copyright case by now and a different story.
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