Last week Microsoft couldn’t resist taunting Google over its licensing deal with LG, and it looks like the patent gravy train isn’t set to stop rolling any time soon. Accroding to Korean news outlet Yonhap, Pantech is currently in negotiations with the American software giant to pay indeterminate licensing fees for the priveledge of running Android (a free and open-source operating system) on its phones. Along with LG and a handful of other major manufacturers like Samsung and HTC, Microsoft now claims it collects fees for more than 70% of Android phones sold in the United States.
Motorola and Barnes & Noble are the only notable companies that have stood up to Microsoft’s heavy-handed tactics. The later will almost certainly fight it out thanks to backing from recent buyer Google, which has still not been directly sued by Microsoft. Barnes & Noble seems to be resisting Microsoft’s civil suite out of sheer determination, protecting its forward-looking business model built on the Nook series of Android-powered ereaders. The bookseller published Microsoft’s Android-related patents in detail for the first time back in November.
As opposed to Apple, which has so far gone with an all or nothing approach to its legal bullying, Microsoft seems intent on making actual revenue out of its existing patents. Estimates of licensing fees are in the hundreds of millions of dollars per year… which is still far less than Microsoft might be making if its paid Windows Phone 7 operating system could get more than 2% market share. Many speculate that the real motive behind the lawsuits and settlements is to force manufacturers into making and selling Windows phones, which seems appropriate in the case of Samsung, HTC and others.
Google isn’t happy about Microsoft’s Android tax, but there isn’t much they can do about it. Since Microsoft has so far refused to sue Google directly over the software, instead aiming for smaller and ostensibly weaker manufacturers, its patents are unlikely to be overturned in the United States. Oh well – if you can’t innovate, litigate.