Showing posts with label Sony. Show all posts
Showing posts with label Sony. Show all posts

Friday, January 4, 2013

NPE asserts foundational British Telecom patent against Apple, RIM, Android companies, carriers

BT (British Telecommunications) continues to aggressively monetize its wireless patent portfolio through direct and indirect litigation against other industry players. Today a non-practicing entity named Steelhead Licensing LLC filed a host of simultaneous lawsuits in the District of Delaware over a foundational wireless patent that belonged to BT until very recently, and I'd be very surprised if BT wasn't going to get a large cut of any licensing income Steelhead is now going to generate. The complaints were filed against nine handset makers (Apple, HTC, Kyocera, LG, Motorola Mobility, NEC, Pantech, RIM, Sony, ZTE) and five carriers (AT&T, MetroPCS, Sprint Nextel, T-Mobile).

The patent-in-suit is U.S. Patent No. 5,491,834 on a "mobile radio handover initiation determination". The complaints allege that devices implementing the 3G (UMTS) or 4G (LTE) cellular standards infringe this patent when performing a handover from one cell to the next -- it's hard to think of a more basic element of cellular wireless networks. It's unclear whether this patent is subject to any FRAND pledge made by BT with respect to standard-essential patents.

As of the time of publication of this post, the official assignment record for the patent still has only one entry: the original assignment by the inventor to British Telecommunications (presumably his then-employer) back in 1993. Steelhead Licensing now claims to own all substantial rights, so I'm sure an assignment by BT to Steelhead will soon be recorded in the USPTO assignments database. The reason for which the assignment doesn't appear in that database yet is presumably just a minor administrative delay.

Two months ago Google complained about BT using a patent troll as a front. BT is also suing Google directly over a number of patents.

I'm not going to follow Steelhead's lawsuits in detail unless any exceptionally interesting issues concerning post-transfer assertions of FRAND-pledged patents (if the patent-in-suit is an SEP, which is at least a possibility based on how the complaints are worded) come up as litigation unfolds.

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Thursday, December 13, 2012

Nokia-Sony-MPEG LA entity wins jury verdict against Apple over three patents

A U.S. jury has rendered a verdict finding Apple to infringe three patents held by MobileMedia Ideas, a patent monetization entity set up by Nokia, Sony and MPEG LA. MobileMedia Ideas' CEO is also the CEO of MPEG LA.

Here's the public redacted version of the jury verdict:

MobileMedia Ideas v Apple Verdict (Redacted)

These are the three patents-in-suit (in the order in which they appear in the verdict form), all of which were considered valid by the jury:

Apple can try to fight this verdict, but an infringement verdict based on six claims from three different patents suggests that Apple will soon have to take a license from MobileMedia Ideas, which means that Nokia, which is already receiving royalties from Apple under a settlement, is going to get even more money from Cupertino.

But this is not just about Apple. Other companies are now also going to be more willing to pay for a license to MobileMedia Ideas' portfolio. When MobileMedia Ideas sued Apple in 2010, it simultaneously sued HTC and RIM in the Eastern District of Texas.

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Friday, August 3, 2012

Judge Koh once again bars Samsung from making the 'Apple imitated Sony' argument

Judge Koh shows no signs of bowing to public pressure from Samsung. She stands firmly behind her own and Magistrate Judge Grewal's decisions to exclude certain claims and materials, while trying to conceal her annoyance at Samsung's repeated attempts to justify the use of certain arguments and documents with new legal theories. While it's understandable that Samsung's lawyers wish to preserve the record for an appeal, Samsung keeps banging its head against a brick wall with motions that are creative in terms of presenting a diversity of legal theories but very repetitive as far as the relevant facts are concerned.

After confirming that Samsung won't be allowed to use such "evidence" as pictures from the 2001: A Space Odyssey movie and the Tomorrow People TV series, Judge Koh also ruled on an Apple motion necessitated by Samsung's use of arguments and references to evidence concerning a "Sony style" design project at Apple in its trial brief. Apple didn't ask for a new ruling: it merely brought a motion to enforce a previous order by Judge Grewal.

Samsung's "Sony style" theory is that Apple "derived" the iPhone design "from the designs of a competitor--Sony". Steve Jobs apparently told some designer that he'd like a Sony-style design for the iPhone. But the relevant question for the admissibility of Samsung's related argument and evidence is not whether this is an interesting anecdote or exposes Apple as a hypocrite who lets himself be inspired by another company's designs but sues those who imitate his products. Those aren't legal concepts that make an argument or a piece of evidence admissible in a jury trial. Judge Koh notes that "[i]If this evidence were relevant at trial, it would be to prove that Apple's patents are obvious in light of Sony prior art, but Judge Grewal has already excluded this theory from the case".

At some point -- but too late -- a Samsung expert argued that some of Apple's design patents were obvious over the designs of two Sony products, the Sony Ericsson W950 Walkman Phone and the Sony K800i phone. Whether or not this kind of argument would have merit is a different question (I don't see particularly striking similarities between those devices), the problem is that Samsung disclosed it too late and Apple did not have a chance to conduct discovery.

In Judge Koh's summary, Samsung wanted to use the "Sony style" evidence for the following purposes: "(1) [to] rebut Apple's creation theory that the iPhone was 'revolutionary'; (2) to rebut allegations of copying; (3) to establish that the industry at large was moving toward the basic design concepts; (4) to prove design functionality; and (5) to rebut allegations of willfulness."

Judge Koh has now clarified once more that Samsung is barred from using the "Sony style" evidence for purposes 1, 2, 3 and 5. Apple's motion did not relate to purpose 4. Samsung will be allowed to use an Apple-internal email concerning the functionality of the iPhone design and portions of an expert report that presents Sony's designs as evidence of the functional nature of the iPhone design.

Judge Koh did not consider it a viable option to tell the jury that the Sony designs Samsung claims Apple copied "show that Apple was inspired by Sony to create the iPhone design, but that they may not consider this evidence to find Apple's design patents invalid". Realistically, the presentation of such evidence could lead to jurors voting in favor of invalidation regardless of what the court says. This potential prejudice to Apple outweighs the anecdotal relevance of Apple's "Sony-style" design project.

The same field-of-use restrictions (purposes 1, 2, 3 and 5 excluded, but purpose 4 allowed) apply to the testimony of Shin Nishibori, an Apple designer involved in Apple's Sony-style design project.

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Friday, May 13, 2011

Next smartphone patent suit: MyPort IP vs. HTC, LG, Nokia, RIM, Samsung, Sharp, and Sony

Earlier today I reported on patent threats that a company named Lodsys sent to various iOS app developers, but there's also an actual smartphone patent lawsuit that was filed today: Texas-based MyPort IP, Inc. filed a patent infringement suit with the U.S. District Court for the Eastern District of Texas against HTC, LG, Nokia, RIM, Samsng, Sharp, and Sony.

All defendants are accused of infringing U.S. Patent No. 7,778,440 on an "apparatus and method for embedding searchable information into a file for transmission, storage and retrieval" by capturing, geotagging and transmitting information on a cell phone as described and claimed in that patent.

Geotagging is a functionality that's already at issue in other smartphone patent suits including Tierravision's lawsuit against Google, Microsoft and RIM, Nokia's second ITC complaint against Apple (investigation no. 337-TA-771), and Skyhook's patent infringement suit against Google (which is also a response to Google's alleged bullying of Android device makers). While not smartphone-related, it's worth noting that GeoTag Inc. has already sued hundreds of companies over geotagging functionality.

The accused devices run different operating systems. Most of the accused HTC products are Android-based; so are the Galaxy S, one of the accused Samsung products, and the Xperia x8, one of the accused Sony devices. The accused products also include a few products based on Windows Mobile, which became obsolete when Microsoft introduced Windows Phone 7. The accusations are phrased in a way that other products than the ones specifically named are also included.

Even though this lawsuit is not Android-specific, it is in no small part Android-related. By my count, this takes the number of Android-related patent infringement suits filed since March 2010 to 42. Five of those were filed during the last six weeks, so there's no slowing down just yet...

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Tuesday, May 3, 2011

LG subsidiary Zenith files new ITC complaint and lawsuit against Sony in wider dispute involving 50 patents

Compared to Apple's huge patent wars with Nokia and more recently with Samsung, the ever-widening Korean-Japanese dispute between LG and Sony gets less attention except on a few occasions such as Sony's ITC complaint over a host of LG smartphones, LG's ITC complaint over the PlayStation 3, and the temporary seizure of 300,000 PS3s by Dutch authorities. More recently, Sony made headline news mostly with PlayStation Network security issues.

The patent dispute between LG and Sony is nevertheless a huge conflict in which the parties have brought against each other more than a dozen complaints and asserted a total of 50 US patents (31 from LG including its Zenith Electronics subsidiary, and 19 from Sony) plus the European counterparts of some of those. The products at issue are diverse: they include Blu-ray Disc players, digital television sets, smartphones, and video game consoles.

The latest development is that Zenith Electronics, a wholly-owned LG subsidiary, filed two parallel complaints against Sony on Friday (April 29, 2011). Both relate to Sony Bravia HTDV (high-definition television) sets implementing the ATSC digital television standard, but relate to different patents. One complaint over three patents (previously asserted against Sony in the Eastern District of Texas) was lodged with the ITC, requesting an import ban of the accused products, while the other complaint, over two patents (not previously asserted against Sony), was filed with the US District Court for the Northern District of Illinois.

The ATSC digital television standard for HDTV

The short version is that the ATSC digital TV standard is now synonymous with HDTV in the US market. Another important set of digital TV specifications was developed by the EBU (European Broadcasting Union).

The Federal Communications Commission (FCC) of the United States encouraged a group of US-based TV companies to form in 1993 the so-called Grand Alliance (GA) in order to develop a US standard for digital television. According to Wikipedia, the GA "consisted of AT&T, General Instrument Corporation [Motorola], Massachusetts Institute of Technology, Philips Consumer Electronics, David Sarnoff Research Center, Thomson Consumer Electronics, and Zenith Electronics Corporation [the LG subsidiary that brought the two complaints discussed in this post]."

The Advanced Television Systems Committee (ATSC) website lists the ATSC digital television standard on this page. You can find different revisions of the standard there. Since a 2008 revision, the AVC/H.264 codec is also supported; previously, ATSC only supported its predecessor, MPEG 2.

The new ITC complaint

There are already three ongoing ITC investigations of four complaints the parties lodged against each other (investigations no. 337-TA-758, no. 337-TA-764, and no. 337-TA-765). Two of those investigations (no. 337-TA-758 and no. 337-TA-765) relate to complaints lodged by Sony. The third one of those ITC investigations (no. 337-TA-764) simultaneously looks into two LG complaints, one over the PS3 and one over the Bravia TV sets. While the products and patents at issue in those two complaints are unrelated, the ITC decided to combine them because they involve basically the same parties.

If the latest complaint also gives rise to an investigation (which I would except to happen), there will either be a fourth investigation or, since the aforementioned one just started about two months ago, the ITC might order consolidation of the new complaint into that existing investigation (no. 337-TA-764). The fact that the latest complaint is brought by Zenith, not LG itself, may represent an impediment to consolidation because LG and Zenith are formally different legal entities.

The patents asserted in the ITC complaint are:

Zenith previously asserted those three patents -- and seven others -- against Sony in a complaint filed with the US District Court of the Eastern District of Texas on October 29, 2010 (case no. 5:10-cv-00184). That one was the first lawsuit between LG and Sony at least in recent memory. On April 25, 2011 the Texas court agreed with Sony that the Northern District of California was a more convenient location (and equally in the interest of justice). For instance, San Francisco is closer to Korea and Japan in terms of air travel time than Texas. Assuming the ITC now votes to investigate Zenith's complaint over three of those ten patents, the California court will likely stay the related claims in that federal lawsuit but continue with respect to the other seven patents.

Interestingly, Zenith mentions in its ITC complaint that it previously sued various other companies over those three patents and, according to its own representations, succeeded either in the form of settlements (such as with Thomson, Philips, TTE and Pioneer, all of whom took a license) or favorable rulings. Zenith furthermore says that Sony used to have a license to "certain Zenith patents", which has however expired according to the complaint.

The new federal lawsuit

The case no. for the new federal lawsuit is 1:11-cv-02885, Northern District of Illinois. Previously, Zenith sued in Eastern Texas (as mentioned in the previous section), and its parent company LG Electronics filed two suits against Sony in the Southern District of California as well as in the Netherlands. Sony filed two infringement lawsuits and a declaratory judgment action (seeking the invalidation of certain patents) against LG in the Central District of California.

Zenith asserts the following patents in its federal complaint:

The federal complaint is less detailed than the ITC complaint, but it's possible that Sony also had a license to those patents in the past.

Since Zenith is based in Illinois (as is Motorola, which was also involved with the creation of that standard), the LG subsidiary may be able to keep that lawsuit in that state, unlike the one in Texas that was ordered to be transferred to California. Zenith might even try to finally move the original Texas suit to Illinois instead of California.

Next steps

This dispute started last fall and has resulted in a number of complaints especially during the last three months. The fact that LG has asserted more patents so far doesn't necessarily mean that LG is more aggressive in all respects. For example, Sony was the first of the two litigants to involve the ITC, which got LG so worked up that they tried to disrupt Sony's European PlayStation 3 sales.

While the dispute already relates to a variety of product categories, which is reflective of the level of diversification of these two consumer electronics giants, further escalation is still a possibility. For example, while Sony has asserted patents against a number of LG smartphones, LG might own patents in that field that it could assert against Sony as well. Both companies are Android adopters, which is another aspect under which this conflict could get very interesting going forward.

There's no question that this dispute will end with a cross-license deal, and so far LG appears to be very confident that Sony will end up being the net payer and that LG will generate significant income from this on the bottom line. But Sony also has a strong patent portfolio and may actually aim for a cross-license with no or very little money changing hands. There's no doubt that they both have a hard time agreeing on a deal, and this dispute may take a while.

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Thursday, March 10, 2011

LG achieved seizure of 300,000 PlayStations, wants $150-180 million for Sony's past infringement of Blu-ray patents, but ORDER IS LIFTED!

Today's court session in The Hague, Netherlands over the PlayStation 3 dispute between LG and Sony has revealed some mind-boggling facts and figures and produced a major surprise. [Update] According to InsideGamer.nl as well as Dutch newspaper De Telegraaf and an independent source I have talked to, Sony has won this round and the court has lifted the prejudgment seizure order. InsideGamer.nl reports that all seized PlayStations will have to be released, no more seizures will take place, and LG has to pay legal fees amounting to €130,000 (approximately US$180,000). For each day that LG fails to comply, it will be fined at a rate of €200,000 (approximately US$275,000).

I have learned that the key reason for the court to lift the seizure order was that this kind of measure didn't seem fair given the history of negotiations between the parties. The ruling didn't only overturn the prejudgment seizure order but also told LG to inform the Dutch customs authority and ensure that no further confiscations would happen.

This is only related to the prejudgment seizure order: Sony can resume the distribution of PlayStations across Europe for now, but there will still be a full-fledged legal proceeding to determine whether there is an infringement (and if so, how much money Sony owes LG). But Sony's most pressing problem has been solved.

Knowing that the dispute will continue, some numbers are interesting to look at. They were previously reported by Dutch websites gamer.nl and insidegamer.nl, and I have double-checked on everything with an independent source who is in telephone contact with people attending the court hearing. These are the key data points:

  • Approximately 300,000 PlayStation 3s were seized in the Netherlands. The estimated value (for customs purposes) is €43 million (approximately US$60 million at today's exchange rate).

  • Nine more shipments of 15,000 to 20,000 units each -- a total of up to 180,000 more units -- are on their way to the Netherlands. Those shipments would also have been seized if the court hadn't lifted the seizure order.

  • LG wants to receive a patent royalty between $2.50 and $2.55 for each Blu-ray device sold by Sony. Sony has already sold more than 47 million PS3s, and there are other Sony products implementing the Blu-ray Disc standard. In the total of PS3 and other Blu-ray product sales, LG estimated that Sony already owes it patent royalties amounting to $150-180 million for past infringement, plus more money for future sales. Reportedly, LG wants a bank guarantee over a total of $350 million to cover the aforementioned amount as well as estimated payments to be made in the future.

  • As I reported in my previous post, it seems that LG's focus is on getting paid for its Blu-ray patents while Sony wants a comprehensive settlement of all disputes between the parties. In addition to lawsuits between Sony and LG there is also a lawsuit in the Eastern District of Texas that was brought by Zenith, an LG subsidiary, against Sony over eight digital TV patents. Apparently Sony wants all disputes with LG, including the Zenith case, settled at the same time. This includes Sony's own claims against LG. In particular, it claims many LG smartphones infringe some of Sony's patents.

  • Gamer.nl also says that Sony's lawyer said they are willing to negotiate "but not with a knife at the throat", apparently a reference to the situation in which Sony found itself after the prejudgment seizure order.

  • Today's court session was just an emergency hearing following Sony's appeal against the prejudgment seizure order obtained by LG. After this there will be lengthier full-fledged proceeding to determine whether Sony infringes valid patents held by LG. The first court session in that proceeding has apparently been scheduled for November 18.

Sony's winning lawyer was Mr. Bart van den Broek of the Hoyng Monegier firm.

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Wednesday, March 9, 2011

Showdown between LG and Sony over PlayStation 3 seizures to take place tomorrow in a court in The Hague, Netherlands

From a Brussels-based intellectual property lawyer I have received a copy of a Dutch court order obtained by LG against Sony on February 28, 2011. That court order -- which is an additional legal instrument not to be confused with the customs action apparently requested by LG two weeks ago under EC Regulation 1383/2003 -- was issued by the court of Breda, Netherlands, in whose district Sony's European logistics center in the nearby city of Tilburg is based, and enabled LG to request the seizure of any PlayStation 3 units stored there. The first seizure had to take place on March 3, 2011, and up to two more seizures were authorized until March 10, 2011. The quantities seized there may be quite substantial considering that all of Sony's European PlayStation shipments used to go through the Netherlands at least until recently.

Sony had until yesterday afternoon to tell the court whether it wants to appeal this prejudgment seizure order. According to a Reuters report, Sony elected to appeal, so pursuant to the court order there will be a hearing tomorrow, March 10, 2011, in The Hague (where the higher instance court is based) at 2 PM Central European Time.

Sony was not heard before the court issued its order because the judge agreed with LG that any advance notice would have given Sony the opportunity to move its PlayStations out of that warehouse ahead of confiscation.

I have also heard from a credible source that three shipments were seized by Dutch customs officers, apparently at or near Schiphol, Amsterdam's airport. But again, it's important not to mix up the two different legal approaches. Under EU Regulation 1383/2003, products suspected of patent infringement can be seized by customs officer when they are being imported into the EU's Single Market. That's one request LG has made. But the court order I'm discussing here is strictly under Dutch patent law, and it's a preliminary injunction and seizure order, and it's specific to Sony's Tilburg warehouse.

Let me show you the court order (in Dutch) and then explain what it says. There's interesting information in it concerning the failure of negotiations between Sony and LG. This is the 48-page document -- in Dutch and with plenty of pictures:

2011 RK 11-0510 LG - Sony

On February 25, 2011, LG's lawyers (led by Armand Killan of the Bird & Bird firm) requested a prejudgment seizure order under the Dutch Patents Act of 1995.

The complaint relates to patents on the Blu-ray Disc standard and specifically asserts the following three patents:

  • European Patent 1676275 on a "recording medium having data structure for managing reproduction of text subtitle and recording and reproducing methods and apparatuses"; this patent was applied for in the US (publication no. 2005/078948) and various other countries

  • European Patent 1730730 on a "recording medium and method and apparatus for reproducing text subtitle stream recorded on the recording medium; the corresponding US Patent No. 7,756,398 is one of the four patents asserted by LG in its ITC complaint over the PlayStation 3

  • European Patent 1884934 on a "recording medium having data structure for managing reproduction of data streams recorded thereon and recording and reproducing methods and apparatuses"; the corresponding US Patent No. 7,701,835 is also among the four patents asserted in LG's ITC complaint over the PS3

LG explains that those patents are essential to the Blu-ray Disc standard, and therefore, in LG's opinion, necessarily infringed by the PlayStation 3 since it comes with a Blu-ray player. LG claims that it was willing to grant Sony a license on FRAND (fair, reasonable and non-discriminatory) terms in accordance with the rules of the Blu-ray Disc Association (BDA), but LG says "Sony wants to [take a license] only if LGE and Sony also reach agreement on royalties in entirely different and unrelated technology areas (such as TVs, monitors and mobile phones)."

LG expresses doubts about whether that position is in line with competition law, but at any rate, LG wants to receive royalties on Sony's PlayStation 3 sales. LG says that negotiations between the parties failed in December (apparently because Sony wanted a broadbased agreement while LG wanted to treat the Blu-ray license separately from everything else), and "almost immediately thereafter" Sony lodged a complaint with the USITC to obtain an import ban against mobile phones sold by LG. LG's request for the Dutch seizure order mentions that there are several lawsuits going on between the two parties in the US.

Under the circumstances, LG believes that Sony should be treated like any other patent infringer and not be allowed to sell the PS3 in the Netherlands until it has taken a license to LG's Blu-ray patents. LG therefore asked the court for a relief that is a specialty of Dutch law: a prejudgment seizure order. LG's complaint stresses that if Sony later proved (in a full-fledged proceeding) that there isn't any infringement of valid LG patents, Sony could still collect damages from LG on the grounds of an "unjustified" seizure. In light of that, LG asked the court not to hear Sony before issuing a decision because if LG is wrong, Sony will be reimbursed later, but by involving Sony in the proceedings there would be a risk of the allegedly infringing goods being moved out of the warehouse before they can be seized.

The judge concluded that LG had substantiated its infringement assertions sufficiently well and agreed that Sony should not be heard before the decision was issued. Then the judge ordered the prejudgment seizure I explained, with LG being responsible for the cost of warehousing the seized goods, and laid out the possibility of an appeal by Sony.

So tomorrow afternoon in The Hague there will be a major showdown between LG's and Sony's lawyers. It's imperative for Sony to fight those infringement assertions because otherwise LG will be in a strong position to obtain additional injunctions in the Netherlands -- through which Sony used to route all of its European PlayStation shipments, although it may now already be going through other countries -- as well as in other countries throughout and beyond Europe.

[Update] Meanwhile the court has ruled and I have reported on the decision. Sony got the prejudgment seizure order overturned, but the case isn't over.

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Friday, March 4, 2011

ITC votes to investigate LG's complaints against Sony over the PlayStation 3 game console and certain Bravia digital TV products

On February 4, 2011, LG filed two simultaneous complaints against Sony with the US International Trade Commission ("USITC", or just "ITC"), a US federal government agency with quasi-judicial powers. The two complaints asserted four different sets of four patents: the PS3 complaint alleged the infringement of four patents related to the Blu-ray Disc format, while the patents asserted in the digital TV complaint (which specifically accused various Sony "Bravia" devices) cover Web TV, HDTV and similar technologies.

The complaints asked for import bans that would effectively preclude Sony from selling those products into the all-important US market, with disastrous consequences not only for its sales production but also for its longer-term market position. Such a decision could come within 16-18 months.

The ITC just announced that it voted to look into both complaints in one consolidated investigation. The new investigation number is 337-TA-764. As the ITC pointed out, this is just the launch of an investigation -- not a decision on the merits of the complaints. The ITC previously also voted to investigate a Sony complaint against LG, as I reported a month ago. I haven't seen any case in which a complaint lodged by one major company against another would have been dismissed at this early stage.

The ITC's announcement doesn't state the reasons for a consolidated investigation of both complaints, but I can see why the ITC chose to combine them. Even though the asserted patents and accused products in both complaints don't have any overlap, both were filed on the same day, were filed by the same complainant (LG Electronics, Inc. of Korea), and named three entities as respondents (Sony Corporation of Japan, New York City-based Sony Corporation of America, and Sony Electronics, Inc. of San Diego, California). The PS3 complaint additionally named Sony Computer Entertainment, Inc. ("SCE") of Japan and Sony Computer Entertainment America, LLC ("SCEA") of Foster City, California as respondents, but the ITC has already launched other investigations in which one or more of the respondents are accused of infringing only some of the asserted patents.

For example, ITC investigation no. 337-TA-710 is another consolidated investigation: in that one, HTC and Nokia have to defend themselves against patent infringement allegations by Apple. Four of the nine patents were asserted only against HTC but not Nokia; Nokia, however, faces infringement allegations over four other Apple patents in a different investigation (no. 337-TA-704). (In December I published an overview of smartphone-related ITC investigations.)

I mentioned Sony's complaint with the ITC over various LG smartphones. That one was filed in late December 2010. Previously the two parties were already litigating against each other in US federal courts. LG's ITC complaints appeared to come in retaliation for Sony's ITC complaint, and LG brought about further escalation by requesting customs action and, apparently, a preliminary injunction against Sony in the Netherlands, the key entry point for all PS3 shipments into Europe. I commented on this a few days ago (the post was also published on The Guardian's Technology Blog) and said I expected Sony to look for ways to take advantage of Europe's fragmented patent system by shipping into the EU via other member states.

Meanwhile a Reuters report quotes an unnamed person familiar with the matter as confirming that Sony "does not expect its regional sales to be badly affected by the temporary ban." As Reuters and Bloomberg report, Sony is also evaluating its options to have the Dutch decision overturned.

In other words, no signs of giving up. At some point they'll negotiate a settlement, I'm sure -- but it may take a while.

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Tuesday, March 1, 2011

How Sony can still ship PlayStations into Europe

The Guardian reported on LG's latest patent strike against Sony in a wider patent battle over Blu-ray Discs, smartphones and video game consoles:

"European customs officers have been ordered to seize shipments of Playstation 3s after LG won a preliminary injunction against Sony [...] The ruling by the civil court of justice in the Hague means that all new PS3s have to be confiscated as they are imported into the UK and the rest of Europe for at least 10 days."

In how much trouble is Sony now? Is Europe about to run out of PS3s?

LG made a bold move that definitely ups the pressure on Sony. But it's important to understand that patent enforcement in Europe is still a country-by-country affair -- even though there is a European Patent Office -- and Sony can work around the Dutch decision by going through entry points outside of the Netherlands. That's a logistical nightmare, but it is a possibility. Sony is most likely already exploring such alternative routes.

In order to cause greater disruption to European PlayStation sales, LG would have to obtain injunctions in more EU member states than just the Netherlands, a country that accounts for only three percent of Europe's total population size.

While LG hasn't confirmed anything and Sony's official statement doesn't say much, there's every indication that LG requested customs action against goods suspected of patent infringement in accordance with EU Council Regulation No 1383/2003 and additionally obtained a prejudgment seizure decision from a court in The Hague, Netherlands. The combination of those two measures means Sony has a serious problem in the Dutch market, but it's not the end of the world for the PlayStation in the whole of Europe.

As The Guardian reports, "Rotterdam [a Dutch seaport] and Schiphol [Amsterdam airport] are the main import points for PS3s for both the UK and continental Europe". But Sony could change that.

Other high-tech companies will be watching this with interest, and with concern. For example, Apple and Nokia are also battling each other in Europe, and other litigants can never know when their adversaries are going to seek European customs action as a way to increase the pressure on them.

Customs action against goods suspected of infringing certain intellectual property rights
(Council Regulation (EC) No. 1383/2003)

In 1994 the European Community (nowadays known as the European Union, or "EU") passed a law for the seizure of counterfeit and pirated goods, amended it in 1999, and replaced it in 2003 with Council Regulation (EC) No. 1383/2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights.

Over time, the regulation had evolved from an anti-counterfeiting measure into a broader protection of right holders. In particular, patents were not within the scope of the regulation at the outset: while many counterfeit goods infringe patents, most patent infringers aren't pirates.

Customs authorities are usually not equipped to make the technically and legally complicated determination of infringement that usually requires multi-year lawsuits. The regulation provides the possibility that customs offices may act at their own initiative (ex officio) if they suspect infringement, but its Section 2 sets out the practically more relevant scenario of a right holder applying for customs action in writing. In that case, a right holder doesn't bear the burden of proof that there is an actual infringement. It is merely sufficient that "goods are suspected of infringing an intellectual property right", such as a patent under the law of the EU member state in which the application is filed.

Yes, being "suspected" of infringement is all it takes. Looks lopsided, doesn't it?

But right holders seeking to harm competitors must be careful. A right holder whose infringement allegations aren't confirmed by a court of law may be liable for the damage inflicted under the law of the EU member state in which the application was made.

Also, seized goods will be released after 10 days if the relevant customs office hasn't been notified of judicial proceedings under national law. Even if a lawsuit has been filed, there is still a potential way out: "the declarant, owner, importer, holder or consignee of the goods shall be able to obtain the release of the goods or an end to their detention on provision of a security" pursuant to Article 14.

"The security [...] must be sufficient to protect the interests of the right-holder", which means that Sony would have to deposit the amount of damages LG might be awarded if it prevailed in court. But in the Netherlands this doesn't seem to be an option for Sony because LG appears to have obtained a preliminary injunction by a court in The Hague, ordering prejudgment seizure. As a result, the PlayStations detained there won't be released against LG's will until the end of the lawsuit.

Courts hand down such injunctions only based on a summary judgment standard: it's a quick procedure, but the party requesting the injunction must show that it has a reasonable chance to prevail. By contrast, the application for customs action under the said EU regulation merely has to meet formal requirements without proving the infringement allegations by any standard at all.

The fragmentation of the European patent system may come in handy for Sony

While the European Patent Office (EPO) performs the centralized examination of European patent applications, EPO patents are just bundles of national patents, each of which is assigned a national patent number and can be enforced only in the one country in which it is valid. This is going to change: the EU is in the process of creating a single EU patent and patent judiciary, but this will take years to come to fruition.

The aforementioned European regulation requires a patent holder to claim an infringement only of a national patent. LG holds some Dutch patents that it apparently claims are infringed by the PS3, and didn't have to allege the infringement of patents in any other EU member state.

But the prejudgment seizure order issued by the court in The Hague is valid only in the Netherlands. Therefore, if Sony ships PlayStations directly into other EU member states, the local customs authorities there will not take that seizure order into account. They may pay attention to LG's application for customs action, but in that case Sony could bail out the detained goods on security after a maximum of ten days. Any further detention would require an injunction in the relevant country.

Prejudgment seizure appears to be a particularly Dutch phenomenon. It is also mentioned in a very interesting Managing Intellectual Property article on how customs can help patent owners.

While other European countries may not provide prejudgment seizure, it would be possible to seek preliminary injunctions against the sale of allegedly infringing goods. This is an option in many European countries. In Germany, the largest EU member state (and home to the major seaports of Hamburg and Bremen as well as Frankfurt Airport, one of the world's 10 largest cargo hubs), it is possible to obtain preliminary injunctions in a relatively rapid procedure, but alleged infringers are usually given an opportunity to defend themselves prior to a preliminary injunction. Also, if a preliminary injunction is granted but fails to be upheld in a subsequent main proceeding, there is a considerable liability risk involved.

In order not to give LG any clues, Sony will likely not announce which alternative routes into Europe it is exploring for the PS3. This is a major logistical challenge, but Sony will probably go to extreme lengths to avoid the loss of market share in Europe. In that case, LG will have to chase the PS3 down across the EU, or at least in the largest markets. It will take much more than the surprise effect of the Dutch decision -- however impressive it may be per se -- to bring Sony to its knees.

That said, it seems that the patent wars between major industry players are ever more bitterly contested, and Europe increasingly becomes a battlefield.

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Tuesday, February 8, 2011

LG wants the PlayStation 3 banned from entry into the US market, files ITC complaint against Sony over Blu-ray patents

Yesterday LG Electronics announced that it lodged a patent infringement complaint against Sony with the US International Trade Commission on Friday (February 4, 2011). LG asks the ITC, a US government agency with quasi-judicial authority, to permanently exclude the PlayStation 3 video game console from entry into the US market because of the alleged infringement of four LG patents related to the playback of Blu-ray Discs.

The complaint broadly relates to "certain electronic devices having a Blu-Ray Disc player and components thereof", but the PlayStation 3 (Model No. CECH-2501A) is the only Sony product to be specifically named in the main document of the complaint. According to a Bloomberg report, LG simultaneously filed another complaint against Sony over its Bravia television sets. The ITC Law Blog has details on that one. I will focus on the PS3-related complaint here.

What we're seeing here is retaliation. At the end of December, Sony filed an ITC complaint against LG, seeking an import ban for a list of mobile phones. On January 27, 2011, the ITC voted to investigate that complaint, as I mentioned in my previous post. Now LG -- which boasts in its complaint that it owns 90,000 patents and patent applications on a worldwide basis -- is striking back at the PlayStation 3.

It's like "you touch my smartphones and I bomb your game console."

This pattern has a precedent: after Microsoft sued Motorola in October over its Android-based phones, Motorola filed an ITC complaint over the Xbox 360 in November, and in a new suit filed shortly before Christmas, Motorola also attacked the Kinect controller. I recently produced a visualization of the battlelines between those two companies.

Concerning retaliation, there's some confusion as to whether Sony has previously sued LG over Blu-ray Disc patents. When Sony lodged its complaint in December, several reports (all of which may have echoed the same original article) stated that Sony's complaint also tackled LG's Blu-ray Disc players. However, that claim was made before the complaint became publicly available. I looked at it later, and its paragraph 13 states that "[t]he products at issue in this investigation are certain mobile telephones and modems manufactured by [LG]." I suppose it was just someone's speculation that LG's Blu-ray Disc players were also targeted. But now that LG has opened the Blu-ray can of worms, who knows how Sony may feel compelled to respond. From what I hear, the patent situation surrounding Blu-ray is a constant challenge for the consumer electronics industry.

The video game console market is large enough on its own that a certain level of patent assertion activity is just normal. Nintendo's Wii was also the subject of an ITC investigation a couple of years ago. Hillcrest Labs complained in 2008, and the matter was settled in September 2009. But LG's action against the PlayStation 3 and Motorola's attacks on the Xbox 360 and the Kinect controller appear to have been triggered by previous suits over smartphones. In those disputes, video game consoles seem to be drawn into wider conflicts as a secondary theater of war.

[Update 1] I have now obtained a copy of a complaint filed on the same day (Friday, February 4, 2011) by LG against Sony with the US District Court of the Southern District of California. The case number is 3:11-cv-00247. In that suit, LG asserts six patents (different ones than the ones asserted in the ITC complaint). The accused products include but go well beyond the PlayStation 3. They furthermore include computers such as the Sony VAIO EA, EB and/or X series PCs; digital cameras such as the Sony Model Numbers A55 and TX9; camcorders such as the Sony HDR-XR550; and Blu-ray Discs, such as a PS3 game named "Hot Shots Golf Out of Bounds".

[Update 2] A second, parallel, complaint filed with the same court in Southern California relates to HDTV (high-definition television) products, particularly the Bravia TV sets and some Sony digital cameras. The case number is 3:11-cv-00248. As a starting point for any research into that one, I recommend the related Priorsmart page.

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Wednesday, January 19, 2011

Google is patently too weak to protect Android

About a week ago, IFI CLAIMS Patent Services published its new ranking of the 50 companies awarded the most US patents in 2010. Microsoft is still the number three patentee with 3,094 new patents, Apple is a rising star with 563 new patents (+94%, a greater gain over the previous year than anyone else on the list), but Google isn't even on that list.

I ran a couple of queries on the USPTO's patent database. Last year, Google was granted 282 US patents and -- at the time of posting this -- owns 576 in total.

While Google has ramped up its patenting activity in recent years, the gap in portfolio strength between the Android developer and its mobile operating system competitors actually appears to be widening.

Quite often I talk to people who vastly "misoverestimate" :-) the power of Google's portfolio. There's a popular belief that all major high tech companies own tons of patents, and many consider Google fairly innovative. But its patent portfolio is dwarved by those of its competitors. Microsoft's portfolio, for instance, is 25 to 30 times larger (and, as I'll explain further below, much more diversified).

When I point out those facts, many people are just as surprised as I was when I learned a long time ago that Australia has almost the size of the "lower 48" states of the United States but only about 5% the number of inhabitants. Counterintuitive facts are nevertheless facts.

Android is a "suit magnet"

The number one patent-related trend in 2010 was, beyond all doubt, the flood of infringement suits that swept over the smartphone industry and that I expect to further intensify this year. Prior to 2010, there were a few cases, most notably NTP vs. RIM, which had the US BlackBerry service on the verge of a shutdown and resulted in a $612.5 million settlement, and Qualcomm's fights with Nokia and Broadcom, which also raised antitrust questions. But what's going on now is far bigger, and potentially far more devastating.

The operating system that is the target of more infringement action than any other is Google's Android. When one of those many suits was filed, I already quoted Maureen O'Gara, who noted that "[t]he freebie operating system is proving to be quite a little suit magnet." That's a funny metaphor, and by now it would be an understatement.

Here's a list of Android-related disputes that started in 2010 (in chronological order):

  1. Apple vs. HTC (see this overview of "Apple vs. Android")

  2. Oracle vs. Google (five months later, Google still hasn't been able to countersue Oracle)

  3. Interval Licensing vs. Google and others (analysis of amended complaint)

  4. Microsoft vs. Motorola (overview of state of affairs at end of 2010)

  5. Apple vs. Motorola (see this overview of "Apple vs. Android")

  6. Gemalto vs. Google, Samsung, Motorola and HTC (analysis)

  7. Vertical Computer Systems vs. Samsung and LG (analysis)

  8. Helferich Patent Licensing vs. Huawei (the mid-November complaint listed 24 licensees including Apple, Microsoft and HTC, but Chinese device maker Huawei apparently refused to pay)

  9. Multimedia Patent Trust (Alcatel-Lucent) vs. LG and others (analysis)

  10. Hybrid Audio vs. HTC, Dell and others (analysis)

  11. Hopewell Culture & Design vs. Motorola, Samsung, HTC, LG and others (analysis)

  12. Sony vs. LG (complaint; this is the first such suit of one Android adopter against another)

That's a dozen already, and I have no doubt there will be more. Ten of the disputes listed above started just last quarter. Some of those suits also target Apple (which has a clash of titans going on with Nokia), but fewer than Android although it would be economically more attractive; a small number of cases involve BlackBerry or other platforms. I'm not aware of any suit accusing a Windows Phone 7 device at this stage, although Microsoft is frequently sought out by patent holders.

Google can't solve Android's problems through cross-licensing

There is indeed a connection between the rampant enforcement of patents against Android and Google's weak patent portfolio. Only a few of the litigants are non-practicing entities while most of the plaintiffs, especially the ones asserting large numbers of relatively strong patents, sell products of their own. Those who actually have products on the market would have to think (at least) twice before attacking Android if they might need access to some of Google's patents.

Cross-licenses are the way most patent disputes between large companies are resolved. If there is parity in terms of how much each party needs the other company's patents, the deal may be done without money changing hands. In most cases, however, one company will have the upper hand and make a payment to compensate for the difference in portfolio value. Still, such payments tend to be much lower than the cost incurred by a "have-not" who needs a license from a powerhouse. In a price-sensitive, highly competitive market such as smartphones, the cost of patent licensing is eminently important.

No matter how influential Google may be on the World Wide Web, its patents apparently didn't deter Oracle from suing. I'm sure Oracle took a close look at Google's portfolio and determined that there was no risk of a serious counterstrike, or of any at all. If you look at my visualizations of other smartphone patent disputes involving major players on both sides (Apple vs. Nokia, Apple vs. Android, Microsoft vs. Motorola), you can see how they escalate and involve ever larger numbers of patents. By contrast, Oracle still doesn't face any infringement allegations.

If Google could countersue, it might already have a favorable settlement with Oracle in its hands. Since it can't, it will either have to fend off all seven patents asserted by Oracle (plus any others that Oracle could assert in a second suit), in each case by taking the patent down or proving that there's no infringement, or it will have to come up with some theory that it was entitled to a license of some sort. Otherwise, Oracle will prevail and the vast majority of Android applications would presumably have to be rewritten. So chances are this will cost Google (and possibly the Android ecosystem at large) dearly.

Even the 576 patents Google owns are a significant number and set it apart from many others who have even less. But when you're competing in a highly litigious environment in which a diversity of patents is required to build a solid product, that's too little. In Google's case, it's not just weakness in numbers. There's also a lack of diversification. I've looked at a random sample of Google patents, and most of them relate either directly to search or to closely related technologies such as location-based services.

Such a narrowly focused portfolio just can't frighten players like Apple, Microsoft or Oracle, all of whom innovate in a variety of fields of technology. I'm not saying that Google isn't innovative. It's just not innovative in the way that gets rewarded by the patent system with a sizable and diversified portfolio.

Google leaves its partners in the lurch

It's quite possible that even some device makers who adopted Android overrated Google's ability to defend Android against patent threats. Now they see that many patent holders seek royalty payments from makers of Android-based devices, and roughly a dozen have already gone to court with infringement allegations directed at Android.

Google probably doesn't have any contractual obligations. It puts out Android on open source terms. If things work out well, Google reaps most of the rewards. If things go wrong, others bear the brunt of the patent litigation (only three of the twelve suits I listed name Google among the defendants).

Obviously, those device makers knew all along that Google could benefit from Android, but they felt they could still benefit from selling the hardware. Patent issues may turn Android-based devices into an unprofitable business at some point, regardless of consumer demand, and at that point it will be hard for anyone other than Google to make any money with Android.

I also think that Sony vs. LG may only be the first of a number of suits in which one maker of an Android-based device tries to get rid of a competitor. I don't want to name names but I could see some Android device makers trying the same kind of cannibalization.

The Android patent situation would definitely be different -- fundamentally different -- if Google had a stronger portfolio and could show some authority. At a rate of a couple hundred new patents per year, and without much diversification, Google won't become a major force in this game anytime soon.

The patent weakness I described is also going to be a serious problem for Google's WebM codec. That's a slightly different but related subject that I've covered separately and plan to address again.

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Monday, May 31, 2010

Open Invention Network (OIN) demystified

An organization that was founded in 2005 and pompously claims in a press release to be "the company formed to enable and protect Linux" is the Open Invention Network (OIN). But at a closer look it's not nearly as useful as its backers would like to make us all believe. There's absolutely no evidence it has ever helped any FOSS company.

What's beyond doubt is that the OIN's structure is fundamentally flawed and unbalanced.

Above all, the OIN is under the exclusive control of half a dozen companies who have funded it with (presumably) hundreds of millions of dollars and who just use it for their own purposes rather than advancing the cause of software freedom. Therefore, I believe company-independent defense initiatives such as the Defensive Patent License are a fairer, more transparent and more reliable approach than the OIN.

Only six companies call the shots

The OIN's name starts with an utterly misleading term: "open".

In reality, the organization is owned and run by a closed circle of six companies, some of whom have a terrible background concerning software patents:
  • IBM (the world's largest patent holder and one of the most ruthless ones, recently in the news for betraying its own "patent pledge" by infringement assertions made against open-source startup TurboHercules)

  • Philips (a company that once benefited from the temporary abolition of patents in its country but later lobbied extremely aggressively for software patents, left the World Wide Web Consortium because of the latter's royalty-free patent policy, and threatened politicians with killing software development jobs in Europe if they weren't going to allow software patents, even though patents are always related to a target market in which they're valid and 100% independent from where in the world the patented invention is made)

  • NEC (a large patent holder)

  • Sony (a large patent holder)

  • Novell (which never supported any serious push against software patents and instead told EU officials in 2004 that it liked software patents a lot except that a proposed EU law on them appeared to limit "customer choice" a bit too much)

  • Red Hat (which lobbied to keep the aforementioned EU bill alive when we had already formed a majority for its rejection, and which partners with IBM on a number of initiatives that appear to protect FOSS but are either ineffectual or even potentially harmful)
When it comes to patents, would you buy a used car from those fellows?

Everyone else may join as a second-class citizen who won't have a say

The six-pack that controls the OIN invites everyone else to become a mere "licensee". There's only one benefit for a licensee: OIN licensees can't use some patents against each other in some context. If "some patents [...] in some context" sounds strange to you, then that's because the whole OIN is based on an arbitrary definition of the "Linux System". If an OIN member has patents that are infringed by that arbitrary definition of the "Linux System", then it can't use those particular patents against other members as far as those use or distribute the "Linux System" (in whole or in part). If those other members use or distribute software that's not part of the "Linux System", then even those patents could be used against them in that context.

The wording used by the OIN on its About page is:
"Patents owned by Open Invention Network are available royalty-free to any company, institution or individual that agrees not to assert its patents against the Linux System."
Unfortunately, the OIN's six owners decide in a completely intransparent process what is and what isn't part of that "Linux System". The OIN publishes that list, which can and does change from time to time, on its website. The OIN's License Agreement doesn't provide any definition or criteria other than pointing to that list. That list contains not only Linux but also some applications (not all Linux applications), and once again, there's no transparent basis on which the OIN makes or modifies that list at its whim. That's what they mislabel as "open".

[Update] In the meantime I've published this detailed explanation of the arbitrarily-changing definition of "the Linux System" and its implications, and in that posting I have also outlined four alternative ways to address the problem identified. [/Update]

This combination of intransparency and arbitrariness puts licensees into a weak take-it-or-leave-it position. If the OIN changes the list based on the strategic goals of its six owners, all others can stay or leave but they have no basis on which to require the OIN to include certain components in that list or to exclude some from it.

That's not the only important way in which licensees are disadvantaged as compared to owners.

Owners can use the OIN as a patent troll -- but the retaliatory strength of licensees remains unchanged

There are two fundamentally different approaches to patent defense: non-aggression pacts related to a certain range of patents, which is what the OIN's licensees get (with the serious flaws and limitations previously described), and the concept of mutually assured damage (deterrent/retaliatory potential). The latter is much more powerful. While nothing really helps against a "troll" (non-producing entity), a retaliatory arsenal can indeed deter a strategic patent holder from attacking, provided that the attacked entity disposes of patents that the would-be aggressor also needs for his own products/services.

Unfortunately, the OIN doesn't add anything to the retaliatory strength of its licensees. They don't get access to any additional patents that they could assert against an aggressor. But the OIN's six owners could use the OIN as a "troll" that would attack third parties because the OIN itself acquires patents (currently owns a few hundred) for that purposes. OIN licensees can use those patents in connection with Linux; OIN members can use their influence to make the OIN assert those patents against others.

There are no obligations on the OIN or its owners concerning how they would have to strike back against an aggressor. Just like the definition of the "Linux System", it's a backroom process without any transparency or published and binding criteria. They could use those patents for purposes that have nothing at all to do with Linux or other FOSS, and no third party, such as a mere OIN licensee, would have any basis to either get them to help or to make them refrain from a harmful way to use those patents.

They make vague statements on the OIN website as to what they plan to do and that they don't plan to build licensing revenue. None of that is legally binding. If you then look at the patent-related positions and history of that group of companies, you better be careful. The most frightening example is IBM, which never apologized for its assertion of patents against TurboHercules.

A look at the list of OIN licensees

The OIN lists its licensees (starting with the six owners, but that changes nothing about the privileges those have). There are two large players among those licensees: Google and Oracle.

Google provided an official reasoning for becoming a licensee that's fundamentally wrong:
"OIN members can focus their energy on writing and releasing software rather than vetting their code for intellectual property issues."
This is incorrect in two ways at the same time:
  1. The use of those patents is tied to that "Linux System" definition, so the OIN's members still have to be equally careful for all software they develop that isn't part of that definition (which only the OIN's six owners determine and modify, and that definition is always related to particular program versions, so even a contributor to Linux wouldn't have any guarantees if upgrading an existing component).

  2. No one who might want to assert his patents against OIN members will join, and since the OIN controls only a small portion of all patents worldwide, the reasoning of not having to perform patent clearance anymore makes no sense whatsoever, at least for the foreseeable future and probably for all eternity.
It's more likely that Google, the world's largest-scale Linux user, thought that any measure to reduce -- even if just marginally -- the risk of being sued for infringement of patents on hundreds of thousands or even millions of computers was worth trying. But that's their specific situation and doesn't validate the OIN as a whole.

One of OIN's medium-sized licensees is TomTom. That maker of navigation systems became an OIN licensee at a time when it had a dispute with Microsoft. That one was actually settled very quickly at any rate, and part of the agreement was that TomTom would have to stop the infringement of certain Microsoft patents within two years. Apparently, TomTom also agreed to pay royalties. So TomTom recognized it had a problem that the OIN couldn't solve.

What happened later is that some propagandists close to IBM and other OIN owners tried to fool the FOSS community into believing that the OIN played any role in that settlement. That's downright absurd because TomTom only became an OIN licensee, not an owner. By becoming a licensee, TomTom changed its patent licensing situation vis-à-vis other OIN members but nothing changed for the siuation between Microsoft and TomTom.

If the OIN were the kind of magic wand that would do the trick, then why would Amazon and HTC and many others have agreed to pay Microsoft royalties on patents that are considered to read on Linux? They could have joined the OIN, but quite apparently they found out the truth, which is that it doesn't strengthen them at all in their dealings with companies outside the OIN.

So what is the OIN good for?

The fact of the matter is that today, almost five years after its foundation, the OIN still hasn't proven its ability to help any Linux (or other FOSS) company in any meaningful way. Totally unsubstantiated and illogical claims by propagandists aren't a substitute for a single convincing success story. That success story would have to consist in some company potentially hostile to open source (and with a dangerous patent arsenal) accepting the OIN's licensing terms. That hasn't happened and I have serious doubt that it ever will.

The OIN continues to buy patents at auctions that might otherwise be acquired by regular trolls. At first sight, that may sound good. But given the intransparent and arbitrary structure of the OIN, it's not clear whether that's actually the lesser or the greater evil than a conventional troll. In the end, the OIN is under the control of those six companies who could decide to use some of those patents against competitors, including FOSS competitors. By controlling the definition of what the OIN calls the "Linux System", they can always ensure that their competitors don't benefit from it, even if they were or became OIN licensees.

Buying those patents at auctions is really expensive. So far the OIN has spent hundreds of millions of dollars. Given the way businesses operate, that's not the amount of money that one would spend unselfishly. Instead, that level of investment, intransparency and unbalanced rights suggests ulterior motives, if not a long-term hidden agenda.

In closing I can only repeat what I said further above: company-independent defense initiatives such as the Defensive Patent License are a fairer, more transparent and more reliable approach than the OIN. And with the Fair Troll business model, that reliability can be fully preserved while sharpening the DPL's teeth. By contrast, a small group of companies can turn the OIN into an unfair troll anytime, and the rest of the world -- including the FOSS community -- wouldn't find out until it's too late.

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