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How Patent Law Could Radically Change The Mobile Landscape

Since yesterday, I have been biting my tongue a bit….trying my best to not comment on something that occurred yesterday.  Unfortunately, it’s been nagging so much that I just can’t stop myself from writing this missive.  I’ve been trying to hold off because it’s not 100% DIRECTLY related to enterprise mobility and how organizations should best be deploying mobile solutions in the workplace….but when it comes down to it, I feel as if the ramifications of what I am thinking about ARE in fact directly related to enterprise mobility.  So today, I will ask you to kindly bear with me as I go on a complete stream of consciousness.

You may have heard yesterday that courts in both the United States and Canada have approved the sale of over 6,000 patents previously held by Nortel to a consortium of companies including Apple, EMC, Research in Motion, Microsoft, Sony and Ericsson (not SonyEricsson).  There’s a fascinating article at TechCrunch that shares how the auction went down.  It’s a great read that is very much worth your while.

Maybe I’m an alarmist….maybe I’m completely off my rocker (wouldn’t be the first time someone told me that)….but this deal could radically change the mobile operating system landscape where Android would be relegated to a 3rd or 4th position in terms of marketshare.

There…I said it.  And no….I’m not taking any mind altering substances (other than my normal voluminous amount of morning coffee).

Let’s take a quick step back.  There are already a number of lawsuits going on in mobile patent world.

  • Apple is suing Samsung.
  • Apple is now filing a patent complaint against HTC.
  • Apple is said to be considering no longer buying parts from Samsung.
  • Microsoft is suing Motorola.
  • Microsoft has a licensing deal with HTC for their Android devices.
  • Microsoft has also signed recently a number of deals with other Android OEMs/ODMs.
  • Microsoft is said to be looking for $15 from Samsung for every Android device they sell.
  • Oh ya….and there’s Oracle suing Google over Android.  By the way, when was the last time Oracle lost a major lawsuit?  Think about it.  Larry Ellison is as smart as he is arrogant….and don’t forget who his BFF is.  That’s right. Steve Jobs.

The net net?  Everyone is after Android.

Now….let’s add the 6,000+ patents “The Group Of Six” just acquired.  Where does that leave Google?  In a most unenviable position from an IP standpoint.  Add to this the fact that, given the open source licensing that Google has put in place, it will not indemnify any vendor who chooses to use the Android platform.

So what’s to say that “The Group of Six” choose to play a little game known as “My enemy’s enemy is my friend?”

They all gang up on the Android partners – offer egregiously and uncompromisingly unfriendly licensing terms – and create enough headaches that the major OEMs and ODMs throw their hands up in the air and say that it’s just not worth to go with Android.

  • Apple still remains #1 in North America and with a strong position in other parts of the world.
  • The OEMs/ODMs will have to do one of two things.  Either they will recommit themselves to the Windows Phone platform, or if you believe HP, license webOS.  I find the latter doubtful.  So, Windows Phone becomes a legitimate #2.
  • What about our dear friends in Waterloo?  Well, for now, there are no signs of them licensing the BlackBerry OS to anyone else, so by shear numbers, they would probably be #3.

Where does that leave Google?  Fighting to be in the #3 position against BlackBerry.  But let’s not forget, RIM is in on that game of the 6,000+ patents.  They know how to play the legal battles and could very well also do a squeeze play on the remaining OEMs/ODMs who want to play in the Android space.

Now mind you – I am by NO means an expert in patent law.  I don’t even know if this scenario would get review for anti-trust based upon collusionary practices.  I also vehemently believe that the magic eight ball that tells us what the future holds for mobility has run out of batteries.  What I do know is that this is a plausible scenario in the space time continuum….and while almost two and a half years ago I said that the legal system hinders innovation, it’s obvious to me that no one really cares about that right now.

9 Comments

  1. Posted July 12, 2011 at 13:34 | Permalink

    MS will abuse this well to help grab market share, but it will not enable a leapfrog to #1 or #2. Economics certainly play a role in the consideration of ODM’s, but 1) the ODM “new winners” have achieved their success with Android; 2) they’re unsure if MS will succeed and if they do, remember how MS is like to deal with when achieving gorilla status; and 3) OS’s win because of critical mass in Apps.

    Android is #1 today and it will continue to succeed with unit shipments (market share) and Apps for quite some time. The likes of MS can only use economics to hamper that trajectory – not destroy it. Moreover, players like Oracle might want to make some extra bucks, but not to the point of killing the future cash cow.

    Google and friends goofed up big time on patents and their use as weaponry in this new market battle. The impact might not have been obvious before, but I’m sure it is now. They will get very good at this and very fast (I’d be surprised if otherwise). Moreover, Google has natural allies that will join their cause. Expensive lesson to be sure, but it’s by no means “the end of Android’s lead”. Lots and lots of things need to happen before anyone can proclaim that.

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    • Posted July 12, 2011 at 18:26 | Permalink

      So Nick….$15 to Oracle plus $15 to MSFT plus whatever “The Group of Six” can get…call it $5. That’s $35 on a BOM….which is pretty expensive. Now that said, I agree with you re: MSFT behavior when in gorilla mode. If they think they are there yet…they’re nuts. They should be acting like the underdog IMO. I’m also curious to get your sense as to who Google’s “natural allies” are. I can’t help but think that any company should partner with Google with a grain of salt. I’m sorry, but any company that feels compelled to remind us how they are here to do “good” is suspect in my book. Maybe the URL should be Google.org then. ;-)

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  2. Posted July 13, 2011 at 09:08 | Permalink

    And so it begins: http://wapo.st/ndFxr4

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  3. Posted July 14, 2011 at 12:30 | Permalink
  4. Posted July 16, 2011 at 16:57 | Permalink

    At the kernel (pun intended) of MSFT’s claims to fees from Android device makers is the original allegation that the Linux kernel infringes on MSFT’s patents.

    If there was any solid legitimacy to those allegations, don’t you think Linux would have been consigned to oblivion long time ago?

    Expect fight and resistance, not acquiescence, from Samsung, who uses Linux-inside OSs for a wide variety of their phones– not just Android smartphones.

    HTC will ride on the coat-tails of Samsung and refuse to continue to be suckers to pay fees.

    On the whole the article is somewhat sensationalist, and not-too-subliminally (anti-google) propagandist in tone.

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  5. Posted July 18, 2011 at 15:34 | Permalink

    I did not know about the MSFT-Nortel deal covering Linux issues. What then is the basis of MSFT’s patent fee claims against Android device makers?

    At any rate, I found the title of this blog (How Patent Law Could Radically Change The Mobile Landscape) a trifle misleading. We are discussing the implications of te recent Nrotel patent auction. The title led me to believe, though, that it had to do with the more fundamental reforms to the patent law that Obama is said to be on the verge of passing (first major patent law reforms in the US since 1952): Look at http://money.cnn.com/2011/06/24/technology/patent_reform_bill/index.htm
    and many other similar sources.

    I am keep on a discussion of implications of this reform on the mobile marketplace, in particular, on:
    - whether the proposed encourages or stifles innovation (by little startups)
    - whether it arms the big gorilla companies with further strength to use law as a means of stifling competition from the more innovative small companies/startups
    etc.

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    • Posted July 18, 2011 at 17:23 | Permalink

      Sorry you found the title misleading. The point of the title was that the current state of IP law is having profound effects on how companies are developing the competitive strategies in the mobile landscape. It’s already messy and is only going to get more so in the near term. The implications are far reaching and the outcomes are anything but clear in my opinion.

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