back to article Microsoft to Moto: We'll give you $1m a year for your patents

Microsoft and Googorola are having a slight difference of opinion when it comes to how much Redmond should pay for Motorola Mobility's video and Wi-Fi patents. Microsoft reckons that no more than $502,000 a year is fair for Moto's H.264 video patent - which is used in Xboxes and other MS gear - and $736,000 a year is a fair …

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Don't make it a standard if you want to charge whatever you want.

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Make it a standard and charge whatever you want. That's a way to make money after all.

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"Don't make it a standard if you want to charge whatever you want."

Someone should have told Microsoft that, some 30 years ago.

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Linux

Sure, just like these parasites extort $5 per handset from the Android manufacturers.

Well, their balance sheet for 2012 has to show *some* revenue from mobile, after all.

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Mushroom

Ya, wasn't that just for using FAT32?

I hope MS gets gutted. What goes around comes around, and moreso if you're the one who sent it around to begin with.

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Anonymous Coward

When does the industry just move away from FAT32 and just let the consumer install a driver? Microsoft can keep FAT32 and either Microsoft will just include the driver or Windows users get inconvenienced. Dumping FAT32 would drop the prices of a lot of electronics or allow bigger profits on them. Either way, anytime Microsoft loses it is a good thing.

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Anonymous Coward

How is WiFi an essential patent?

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Anonymous Coward

What goes around, comes around.

Karma is such a bitch eh, Microsoft?

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It is a requirement for any participant in a formal standardisation process to declare any patents they hold on the technology and agree to FRAND license. In the case of MPEG - so presumably H.264 - there is a patent pool arrangement in place.

The 802.11 standards are also formal standards.

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The $5 per handset is not just for FAT. The licensing terms that Microsoft has is $0.25 per device with a cap of $250,000 per license agreement. $250,000 is 50,000 units. Since every manufacturer is selling more than 50,000 units, they would be paying the cap of $250,000. Technically, Google could be paying for the license and thus Microsoft only sees $250,000 per year and encompasses every Android handset. They may not let a license be transferable though.

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Pint

Wrong I am

Perhaps, but I think this patent circus is getting sicker and sicker each year. Sometimes you have a feeling that judges get more and more "sick" about it too, but then again I am an optimist sometimes. Half full, half empty so to say.

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JDX
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Re: Wrong I am

Except H.264 is actually one example where a patent isn't stupid, is it? It's not a vague nebulous idea, but an actual detailed invention.

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h3
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Re: Wrong I am

H264 is just Maths it shouldn't be patentable.

Dunno why people think because it is software it deserves any special treatment.

(The real invention is the individual bits of Maths which are not patentable for the good of society).

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Re: Wrong I am

Just maths, eh? Well, technically, a gearbox is just that, too. So are computer programs. In fact, when you come right down to it, everything but art is dictated by mathematics. And even then, some art - music, for instance - is bast on equations.

Saying "Applied Maths shouldn't be patentable" is roughly equivalent to "Nothing should be patentable."

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Re: Wrong I am

Inventive in what way, the specific application of fairly well known and unpatented maths kind of way?

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Re: Wrong I am

Then all language should be patentable (insert sark mark tm)

H264 is not based on equations, it is equations...

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Re: Wrong I am

> Just maths, eh? Well, technically, a gearbox is just that, too

No. Wrong. A gearbox is lumps of metal. I don't know if there ever was a patent on 'a gearbox', but there certainly were patents on particular enhancements to it. For example on synchromesh. Gears are normally engaged by dogs. synchromesh ensures that the gear is 'spun up' to speed before attempting to engage the dog. It could be done by first engaging a spring loaded cone clutch. That isn't 'just maths'.

> everything but art is dictated by mathematics.

It may be dictated by natural laws, these laws may be described by mathematics, but that doesn't mean that 'everything _IS_ maths'.

> music, for instance - is bast on equations.

And that is _exactly_ why music cannot be patented (it can be copyrighted).

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Anonymous Coward

Re: Just mathematics

http://xkcd.com/435/

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This post has been deleted by a moderator

Re: Wrong I am

Ah, it's just atoms with their electrons anyway. Manipulate the mass in a certain way and you have a gearbox.

Manipulate atoms in doped silicone to emit photons in a certain way according to specified methods, isn't that much different from that gearbox.

Either your with patents or your against, maybe just maybe you don't care, but as you commented what you commented that's highly unlikely.

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JDX
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Re: Wrong I am

What's wrong with protecting a recipe for a cake?

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Trollface

Re: Microsoft the Patent troll

Not to mention the copying of the hole in the wall sealed with glass.

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WTF?

Re: Microsoft the Patent troll

I'm not sure you understand this case. It will be bad for the whole IT industry if Motorola/Google get their way. Motorola is definitely the more trollish in this particular case. Standards are meant to be 'copied'. It is worse if MS goes off and makes up its own standards. I don't like MS but I want them adopting international standards rather than just doing things differently.

This is about patents essential for industrial standards where Motorola has made commitments to fair, reasonable and non discriminatory pricing. Motorola is asking for 10 times as much as is needed to licence a package of several hundred patents from over twenty companies including Panasonic, Apple and Microsoft for its own patents in H.264/MPEG-4 Part 10 AVC. Google also committed when they accepted this license to license any patents they have in the standard on similar terms.

If they get away with it being reasonable the real patent trolls will be out for as many standards essential patents as possible to try to shake down massive amounts of money from them by trying to capture large parts of the value of the total standard for patents on relatively minor parts of it.

The only reason I can see for anyone outside Google/Motorola to want to want them to win this case is if they plan to abuse standards essential patents themselves OR if they think the deadlock that is likely to be created will be enough to trigger a massive rolling back of patent law (which is a possible but unlikely outcome in my view). I think if Google/Motorola do get their way it will be bad for them in the long term as others will come for them with standards essential patents and it will cost them far more than they stand to gain.

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Re: Microsoft the Patent troll

I'm not even sure Eadon understands the article, let alone the case. MS are not suing, MS *want* to licence the technologies in question, Motorola hold the patents (not Microsoft) but MS want the terms to be fair. Motorola want a percentage on the sale price.

To put it in simpler terms, if there was a chip in an MS product that required the licence and the chip cost $1, Motorola is asking for a licence fee for that chip of $10, MS would rather pay a percentage of the cost of the chip, now you may think that's unfair to Motorola, why should they only get a percentage of the chip rather than the whole product, but consider how many licences MS require to make the Xbox 360, it probably runs in to the hundreds, if each patent holder wanted 2.5%.........

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Alien

Re: Microsoft the Patent troll

Is MicroSoft not the bully that JUST threatened everybody that unless MicroSoft was paid all the ANDROID oems, as well as LINUX crowd would be taken to COURT. Is this NOT the same MicroSoft that is making 500,000,000 per year off of said ANDROID companies. ALONE..

So. Motorola has LONG-STANDING patents, essential for the X-Box that MicroSoft is using. And they MicroSoft wants to determine how Motorola negotiates.. Rubbish.

FURTHER Since BOTH Apple as well as MicroSoft STOLE XEROX IP.... I say PAY XEROX PARC as well.

'NUff said

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Stop

Re: Microsoft the Patent troll @ joseph lord

I'm not sure you understand the MS strategy..

MS have been hawking around some very flimsy patents to frighten off or extort people using Linux asking stupid fees and actually were caught out using prior art:

http://www.wired.com/wiredenterprise/2012/03/ms-patent/

If MS want to use patents as a barrier to entry or deliberately stifle competition then quite frankly they deserve all they get. The same applies to Apple for their ludicrous patents. Hopefully the system will get so bogged down and become unworkable as to require a complete overhaul.

The only people who lose, no matter who wins in court, are us mug punters to have to pay these ridiculous fees in the form of higher prices.

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Boffin

Re: Microsoft the Patent troll @ joseph lord

Flimsy crappy patents should be thrown out or worked around.

MS's patents on 'de facto' standards such as FAT where the method presented is not necessarily even a good way of achieving the general goals of a file system but are essential to be compatible with FAT are especially troubling. I think that if these are valid the competition authorities should force MS to license them on FRAND terms despite them not having entered into a formal agreement to do so with a standards body.

This does NOT mean that it is a good idea to chuck FRAND commitments out of the window. They should be strengthened and required wherever patents are made essential either by co-operation between competitors to make a standard OR they are essential to interoperate with a technology developed by their owner who has a significant power in a market. [Note the section after the OR is not the current law I believe].

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Re: Microsoft the Patent troll

"MS *want* to licence the technologies in question"

Well they do now anyway. I would assume (yes, I know) that if they had intended to license those technologies from the beginning, they wouldn't have started out by infringing said patents.

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MS want the terms to be fair.

No MS want it to be cheap.

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Re: Microsoft the Patent troll

> FURTHER Since BOTH Apple as well as MicroSoft STOLE XEROX IP

Apple did not 'steal', it paid for those Xerox ideas.

http://obamapacman.com/2010/03/myth-copyright-theft-apple-stole-gui-from-xerox-parc-alto/

Microsoft ? It's in their nature.

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Re: Microsoft the Patent troll

"MS want the terms to be fair. "

http://androidandme.com/2011/07/news/microsoft-demands-15-per-android-handset-from-samsung/

http://arstechnica.com/information-technology/2011/10/microsoft-collects-license-fees-on-50-of-android-devices-tells-google-to-wake-up/

http://www.businessinsider.com/htc-pays-microsoft-5-per-android-phone-2011-5

etc

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Linux

Re: Microsoft the Patent troll

Oh, so Apple didn't really head-hunt Xerox's developers?

BTW, didn't notice the bit where it says what you claim it says:

“Jobs and several Apple employees including Jef Raskin visited Xerox PARC in December 1979 to see the Xerox Alto. Xerox granted Apple engineers three days of access to the PARC facilities in return for the option to buy 100,000 shares of Apple at the pre-IPO price of $10 a share.”

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Re: Microsoft the Patent troll

"I'm not sure you understand this case. It will be bad for the whole IT industry if Motorola/Google get their way"

Well, that all depends on how you look at it. Let's ignore Microsoft's own trolling that gains them $5 per Android handset for the moment and take a look at the bigger picture.

It could be argued that the entire US patent system is horribly broken and it will remain so until that fact becomes overtly obvious even to the most dense politicians in Washington.

If we are willing to accept that, then it follows that the best way to make the situation clear to those idiots in DC is for increasingly ludicrous patent spats to occur in full view of the world + dog.

So, no, I don't think this sort of action is going to be bad in the long run.

For the short term, the worst case scenario is that punters may need to pay a coupe of bucks extra for the new phone that they want (but probably don't actually need) .

Oh the horror!

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Anonymous Coward

Re: Microsoft the Patent troll

This is a case of Google getting Microsoft back for the price that Microsoft gets for Android. Google had many reasons for buying Motorola and protecting it's own ass was the main reason. It's business out there people, business.

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Anonymous Coward

Just how much patent does Moto have in H264?

I thought it was created by a whole group of companies (and organisations), not just Moto.

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Anonymous Coward

Re: Microsoft the Patent troll

1. Xerox PARC opened up their tech to visitors. No, espionage/theft/lawsuit involved. Also, the mouse (which i assume you are referring to here) existed earlier than PARC so prior art argument kind of overrides any of that. Learn your history.

2. As, i understand it Eric Schmidt (then CEO of Google) was on the board of directors at Apple while they were developing the iPhone. There is a good reason Steve Jobs wanted to burn Android to the ground. The entire concept was stolen based on boardroom conversations by a director. Learn your history.

3. The patents in question are not essential for the x-box or any service/device for that matter. MS is actually trying to avoid market/tech fragmentation by using a tech that generally accepted by the industry. Judging from MS' history with this type of thing they will likely try to pay/buy for the rights and if that fails they will add their own tech, which will probably do quite well (Microsoft tried to buy Netscape before developing IE).

4. MS and Apple are playing nice with their mobile devices b/c they have a licensing agreement. Thats the way these things are supposed to work. Ideally patents allow companies and tech to cooperate and play nice not act as some kind of artificial barrier based on who thought of some abstract, overly broad concept first; which as an absolute fallacy if you are the kind of person to agree that there is no new thing under the sun.

5. Google is not your friend. Google is the guy in the shady van offering free candy but providing butt-hurt once you turn around. Then again, I guess that could accurately describe at least one of your friends, who am i to say.

6. I'm sorry about point 5, it was just to funny to pass up.

7. What the crap is up with your capitalization scheme?

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Re: Microsoft the Patent troll

Apple paid Xerox in shares.

And the only one stealing was Bill Gates, from Apple. Bill never was invited to Xerox as Steve Jobs was.

Get your history straight.

Bill however made the claim that he also copied Xerox and not Apple in the court. A claim that could not be proven false, even though we all know it was. Considering how he praised the Mac at it's time.

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Re: Microsoft the Patent troll

There is nothing such as you have to check what patent you might infringe, it's all up to the patent holder to protect his IP.

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Re: Microsoft the Patent troll

Yes, so Xerox sold their ideas into the brains of Steve Jobs etc for 100,000 shares.

Xerox did not believe in their own engineers and had no plans to go to market, for them it was like stealing candy form a child, or so the Xerox executives thought, while they actually gave away their candy.

So in a sense Apple bought the ideas from Xerox, and paid in shares.

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Mushroom

Re: Microsoft the Patent troll

@Goat Jam

Killing the patent system is a low probability potential outcome of Google winning in its view of FRAND. But in my view the risk is too high.

> For the short term, the worst case scenario is that punters may need to pay a coupe of bucks extra for the new phone that they want (but probably don't actually need) .

Actually that is very far from the worst case. The worst case is that the various other companies with patents that have not signed up to patent pools come out of the wood working putting $15 on everything with wifi (say 3 companies charging $5 each), another $15 on everything with Bluetooth, $20 on everything with H.264 video encoding and another $30 on anything with a 3G chip and $50 on 4G and another $20 on 2G GSM. So on a phone it could be $150 and the next generation of technology will never be standardised because the fights to get patents into the standards becomes so desperate and even if it is standarised not one will be able to build the thing because the aggregate licensing costs are 80% of the retail price leaving -10% to actually make the thing and pay for other patents after the retailer margin is considered. Actually it probably wouldn't be quite that bad as the patent holders know they get noting if the aggregate cost kills the technology BUT it will always end up that the MOST unreasonable will get the MOST money.

Patent trolls around the world are desperate for Google to win this so that they can get much more from their standards essential patents.

I want Microsoft to lose the FAT patent because it is lame and obvious and like many others I enjoy MS losing for what they did in the 1980's and 1990's. If they don't lose it then I would hope that competition authorities make them license it on FRAND terms (as they were a monopoly the did establish a de facto standard with that monopoly power so competition law should be used to limit their benefit from that.

However in this case, on this issue I hope that Google loses badly, not for Microsoft but for everyone (including Google if they keep actually making things).

Icon for the end of mutually assured destruction and the start of WW3 in patents if Google win.

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Anonymous Coward

Re: Microsoft the Patent troll

Odd, I think you'll find that Bing did the rolling visual search before Google. You'll find that MS did IM before Google, I think you'll find MS did search before Google, I think you'll find MS did maps before Google.....

They all copy each other.

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FAIL

Re: Microsoft the Patent troll

The thing of importance here is ...

Google via its now fully owned proxy is behaving exactly as they have done in every other area (privacy, copyright etc.). If Google doesn't like the legal playing field, they break the law on such a scale as to make the law unworkable. In this case it is a system of patent licensing and in the final end contract, but the idea is the same.

This has been ongoing and Samsung has also tried this on, so far unsuccessfully.

I am not a gamer, so I don't know, but I would have thought that the xBox h.264 implementation would have been hardware accelerated. It's in software? Were h.264 capability included on a chip purchased by MS, then the principles of exhaustion will apply.

This gambit failed so far, but it seems that some lawyers think that they can find a judge to undo how electronics standards patents are done and turn the whole show into the wild west. Imagine how lucrative it will be to get 2.5% of the selling price of an A380 because there is a TV on board?

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Anonymous Coward

Re: Microsoft the Patent troll

The patents Moto are asserting are FRAND encumbered, so the negotiating rights and obligations are clearly defined, and Moto signed the contract agreeing to it when they put their IP in the standard.

"Apple as well as MicroSoft STOLE XEROX IP."

Not sure about MS or what you think they stole, but Apple paid Xerox for what they used, This "Apple stole from Xerox" should die along with the idiots who keep trolling with it.

You're not even a very good troll.

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Anonymous Coward

>I'm not sure you understand this case. It will be bad for the whole IT industry if Motorola/Google get their way.

Maybe the IT industry should just use WebM instead.

>Motorola is asking for 10 times as much as is needed to licence a package of several hundred patents

If you're referring to MPEG-LA, then the requested amount is pretty much on par actually.

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>>I'm not sure you understand this case. It will be bad for the whole IT industry if Motorola/Google get their way.

>Maybe the IT industry should just use WebM instead.

I would be slightly surprised if it really is free of all patents (except those Google owns and freely licenses). Also it requires the content industry to do likewise and cut off all current mobile phones and tablets or double encode all the content. It isn't likely to happen now, H.264 is pretty firmly entrenched until something else comes along with double the efficiency.

>>Motorola is asking for 10 times as much as is needed to licence a package of several hundred patents

>If you're referring to MPEG-LA, then the requested amount is pretty much on par actually.

Apart from anything there is an annual cap in the MPEG-LA license for H.264 which is capped at $6.5M until 2015 so less than 10% of what Google is asking for.

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$6.5million per what - patent?

Its a whole bunch of patents so it may work out even more!

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Anonymous Coward

>H.264 which is capped at $6.5M until 2015

The cap is per AVC product [triple that figure] and per end product [anyone's guess in MS's case] - not per customer.

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