Microsoft, Google Tussle Over Android Phone Patents

The Galaxy S II is a Samsung smartphone that runs on Android. Analysts say Microsoft could be getting as much as $15 for each phone Samsung sells.

MELISSA BLOCK, host: Google claims that Microsoft is unfairly raising the price of some cell phones. Both Samsung and HTC make phones with Google's Android operating system and both agreed to pay Microsoft, not Google, for the privilege.

As NPR's Laura Sydell reports, that's because Microsoft claims Android steps on its patents.

LAURA SYDELL: Though Apple's iPhone may be the most talked about smartphone on the market, there are way more cell phones using Google's Android operating system, 40 percent in the U.S. market. Microsoft Windows for Mobile is near last with around 5 percent.

But Microsoft deputy general counsel Horacia Gutierrez believes that the Android steps all over Microsoft's patents.

HORACIA GUTIERREZ: Microsoft has invested for decades billions of dollars. In fact, this year alone we are investing over $9 billion in research and development in creating innovations in the software space for these types of devices.

SYDELL: So, Microsoft has told cell phone makers using the Android operating system that they need to pay up, because Android is built on software that is patented by Microsoft.

Samsung, the largest maker of Android phones, isn't saying what it's paying, but analysts believe Microsoft could be getting as much as 15 bucks for each cell phone Samsung phone.

Julie Samuels, a patent attorney with the nonprofit Electronic Frontier Foundation, is a skeptical of Microsoft's motives. She says in the past, companies that aren't winning with consumers often assert their patents.

JULIE SAMUELS: When faxes started to go out of style, all of a sudden you saw this crazy uptick in litigation among fax companies. And it's because when a party isn't making as much money selling their product, they realize they can maybe monetize their patents instead.

SYDELL: Not all companies have agreed to pay Microsoft licensing fees on Android. Microsoft is suing Motorola, though that company was recently acquired by Google. And Microsoft is facing off against Barnes and Noble in court because it using the Android system for its Nook eReader.

Kent Walker, Google's general counsel, says Microsoft hasn't proven that Android steps on any of their patents. And he thinks a lot of Microsoft patents are probably pretty crummy.

KENT WALKER: Many software patents are simply overbroad and vague. In fact, when they've been re-examined by the Patent Office, they're either invalidated or cut back, roughly 80 percent of the time.

SYDELL: Microsoft and Samsung won't say which Android patents are part of their licensing deal. But you can get a hint of what's behind the deal by looking at the cases that have gone to court.

Take Patent Number 5889522. It was filed in 1994, way before the days of smartphones and eReaders. It's a patent bringing up different windows in a browser. David Martin, an expert who evaluates the value of patents, says not only is that patent broad, it wasn't even Microsoft's novel idea.

DAVID MARTIN: They were not only not alone in the universe, but they were very clearly in heavy company in what they were doing.

SYDELL: Martin says in the 1990s, the U.S. Patent Office was bombarded with requests for software patents and there was a lot of confusion. Often patents were granted to many companies for the same thing. Now, it's easier to settle than it is to sort it all out.

MARTIN: It becomes expedient for parties to settle, because it allows the secrecy that is the secrecy that protects the absence of quality in both portfolios from ever having to be confronted.

SYDELL: Of course, not every one agrees that Microsoft is holding a portfolio of lousy patents. Florian Mueller is an intellectual property consultant.

FLORIAN MUELLER: Maybe not all of them are valid. Maybe not all of them would be found to be infringed based on a detailed analysis. But chances really are if they asserted everything in court, if they went to court over their whole patent portfolio, that probably Android would infringe hundreds of them.

SYDELL: Perhaps Microsoft has some good patents and maybe Android is stepping on them. We may get a chance to find out. If Google's acquisition of Motorola is approved, then it will be Google facing off directly against Microsoft in court its Android operating system.

But, in the meantime, Android phones may cost more because the makers have to pay to Microsoft. That might make Microsoft's operating system more appealing to the people who make phones and the people who buy them.

Laura Sydell, NPR News.

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