MICROSOFT LAWYER DEFENDS ANDROID LICENSING ARRANGEMENTS

Speaking with The San Francisco Chronicle recently, the deputy general counsel of Microsoft’s intellectual property group, Horacio Gutiérrez, discussed his company’s decisions to chase down other firms for Android-licensing agreements and the current state of patent wars. Gutiérrez doesn’t think Microsoft should be viewed as a “patent troll” for its recent agreements with Samsung, HTC, ViewSonic and Acer (among others) and its ongoing lawsuit with Foxconn and Barnes & Noble over the Nook. He also does not think the current patent system is broken. “Every time there are these technologies that are really disruptive, there are patent cases,” Guitiérrez explained. “Licensing is not some nefarious thing that people should be worried about. Licensing is, in fact, the solution to the patent problem that people are reactive so negatively about.”

Guitiérrez says that Microsoft invented a number of functions used in Android, including the “ability to synchronize the content that you have in your phone with the information in the server of your company or in your computer at home,” and the “efficiency of operating systems” as a whole. “I think the most important part here is that a lot of the innovation that is happening today is really happening in the software space,” Gutiérrez noted. “So the question of whether software should be patentable is, in a sense, the same as asking whether a significant part of the technological innovation happening nowadays should receive patent protection.”

SAMSUNG AND MICROSOFT SIGN HUGE PATENT DEAL

Microsoft is announcing today the biggest Android-related patent deal to date, signing a broad cross-licensing agreement with Samsung.
With the deal, Microsoft will get royalty revenue on every Android smartphone and tablet that Samsung sells. Redmond already has a deal with another major handset maker — HTC — that sells both Android and Windows Phone devices.

“Together with the license agreement signed last year with HTC, today’s agreement with Samsung means that the top two Android handset manufacturers in the United States have now acquired licenses to Microsoft’s patent portfolio,” Microsoft general counsel Brad Smith and top IP lawyer Horacio Gutierrez said in a blog post. “These two companies together accounted for more than half of all Android phones sold in the U.S. over the past year.”

Microsoft currently earns more money of licensing to Android handset manufacturers than it does from its own Windows Phone OS.

APPLE, NOKIA SPAT ENDS; APPLE PAYING NOKIA

On Tuesday Nokia announced that it has reached an agreement with Apple that “will result in settlement of all patent litigation between the companies,” and that both firms will withdraw all complaints against one another from the U.S. International Trade Commission. The two firms have been fighting over patents for the past few years, filing counter suit after counter suit. The battle was thought to have had some closure when the U.S. ITC ruled that Apple did not infringe on Nokia’s patents, but then last month the government group said it would continue its investigation. Nokia said Tuesday that the agreement “consists of a one-time payment payable by Apple,” and that the Cupertino-based company will continue to pay royalties to Nokia for the remainder of the agreement. “We are very pleased to have Apple join the growing number of Nokia licensees,” said Stephen Elop, Nokia’s president and CEO. “This settlement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market.”

MICROSOFT MAKES MORE MONEY FROM ANDROID THAN ITS OWN WINDOWS PHONE

According to a report by Citi analyst Walter Pritchard, Microsoft may be making more money off Google’s Android operating system than it makes off its own Windows Phone platform, five times more, in fact. Pritchard states that as a result of a patent settlement, HTC is required to pay Microsoft $5 for every Android phone sold.

Analyst Horace Dediu estimates that HTC has sold 30 million Android smartphones to date, which adds up to $150 million in the bank for Microsoft. Dediu notes that Microsoft has reported Windows Phone sales totaling 2 million licenses to date, and he estimates the company’s license fee to be $15 for a total of just $30 million.

Pritchart notes that Microsoft is currently suing other Android phone makers for infringements on the company’s intellectual property, and is seeking between $7.50 and $12.50 per device sold. As much money as the company is making on sales of HTC’s Android phones, it’s easy to see why Microsoft is pursuing other cell phone makers with similar suits.