News

Microsoft Inks Two More Android IP Deals

• By Kurt Mackie
• July 01, 2011

On the heels of Monday's licensing agreement with General Dynamics Itronix, Microsoft has inked two more intellectual property (IP) licensing deals relating to use of the Android mobile OS.

Microsoft entered into an IP agreement with Velocity Micro Inc., a computer maker that uses Android on its Cruz tablet devices, on Wednesday. On Thursday, the company reached another deal with Onkyo Corp., which has licensed Microsoft's IP assets associated with the use of Android on Onkyo tablet devices.

"[The Onkyo agreement] and similar agreements recently announced evidence the momentum and success of our licensing program," commented Horacio Gutierrez, Microsoft's corporate vice president and deputy general counsel of intellectual property and licensing, in a released statement from Microsoft.

That success may be more than a little ironic for Microsoft, which has been struggling for years to get a firm toehold in the consumer mobile OS market.

Microsoft currently receives more revenue from the Android mobile OS (developed by Google) than it currently does from Microsoft's own Windows Phone 7 mobile OS, based on Microsoft's IP royalties collected from Android use. At least that's one "back of the envelope"-type calculation made in a blog post by Horace Dediu of Asymco, which is described on LinkedIn as "a company selling software development and consulting services for companies interested in deploying mobile applications."

In a very conservative estimate, Dediu calculated that Microsoft earns "five times more income from Android than Windows Phone."

As for what patents were involved in the recent licensing deals, none of the three companies will say. General Dynamics Itronix, Velocity Micro and Onkyo all indicated that the terms of the deals were not disclosed. 

Clues about the patents can be inferred from the legal proceedings of two companies that are fighting Microsoft's IP claims over Android. Motorola is one of those companies. However, Motorola has had trouble contesting the language of the patents in a court review (see "Microsoft Gets Upper Hand Against Motorola in Android Patent Suit"). That review had attorneys arguing over patent language associated with file allocation table technologies, long file names, client-server synchronization, a scheduler, physical sector address locations, context menus associated with object classes and other matters.

Barnes & Noble is also fighting Microsoft over IP claims associated with the Barnes & Noble Nook electronic reader devices, which use Android (see "Barnes & Noble Shoots Down Microsoft's Patent Infringement Claims"). In a legal brief, Barnes & Noble attorneys identified patents Nos. '372, '780, '522, '551, and '233 as the ones being at stake in that case. The patents, they said, were for "five insubstantial and trivial features."

Florian Mueller, who describes himself as an "intellectual property activist," noted in a recent blog post that licensing deals that avoid litigation can be a good thing. However, he added that Google can't be happy that its free smartphone OS concept has been "reduced to absurdity on a daily basis" by these legal intellectual property licensing deals.

"Every device maker who feels forced to take a patent license on Android disagrees with Google's claims in the sincerest form: by putting his money where his mouth is," Mueller stated in his blog. "That is exactly what Google fails to do: it doesn't indemnify device makers because it's aware of Android's infringement."

Roger Kay, founder and president of Endpoint Technologies Associates, wondered why Google hasn't directly engaged to help OEMs using Android, since they are making the business case and bringing in the money. In response to a question, he didn't feel that Microsoft's litigation will "doom" the OS, but it does add costs.

"Android is not by any means doomed, but, by making its case stick, MSFT is adding cost to the bill of materials in Android devices, leveling the playing field somewhat for Windows Phone," Kay stated via e-mail. "In effect, Microsoft is saying, as Bill Gates first said in 1976, software is not free. Someone has to build it and get paid for it. Google's trick is, of course, they give the software away and get paid for delivering the eyeballs to advertisers."

Meanwhile, Android use has started to flatten among U.S. consumers in recent months, according to a May Nielsen poll. Android still holds the lead at 38 percent use among U.S. smartphone consumers. However, Apple iPhone OS use, at a 27 percent market share, has shown the most growth among the mobile OS platforms in the past few months, according to Nielsen. The poll lists Microsoft's Windows Mobile at 9 percent use, with Windows Phone 7 at just 1 percent use.