Barnes & Noble Could Bring the End of Microsoft’s Extortion Tactics

November 9, 2011
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B&N surprises me more and more these days. They were the first to show the potential of an inexpensive $250 Android tablet with the original Nook Color, and continuing to do it with the upcoming Nook Tablet. This is surprising by itself because they could figure out what a regular Android manufacturer couldn’t – that there may be a market for quality low-end tablets.

But what’s even more surprising is that they are among the very few (alongside Motorola) to actually stand-up to Microsoft when they know Microsoft is wrong charging everyone for their patents as much as they do for their mobile OS – patents that haven’t even been validated in a Court.

Remember, these are all “alleged patent infringements”, which is why it’s so sad to see companies like Samsung and HTC simply agree to pay Microsoft, even though they know most of their patents are bogus. I mean, come on Samsung and HTC – you’ve benefited so much from Android, and you’re just letting Microsoft walk all over you like that?

In the mean time, B&N, a book store chain company, which has been using Android for only a year, decided to see if Microsoft’s so called patent infringements can actually pass the validity test in a Court. Obviously, they think they don’t, otherwise they wouldn’t have gone to Court.

But they aren’t stopping there, and they are even asking the US regulators to intervene and stop Microsoft from monopolizing the market with their patents and drive out the competition.

“Microsoft is embarking on a campaign of asserting trivial and outmoded patents against manufacturers of Android devices,” Barnes & Noble said in an Oct. 17 letter to Gene Kimmelman, the Justice Department’s chief counsel for competition policy.

“Microsoft is attempting to raise its rivals’ costs in order to drive out competition and to deter innovation in mobile devices.”

Once again, I find it ridiculous that they even dare to charge for a bunch of patents as much as they do for their whole mobile OS. How is that even possible? Well, it’s possible because, unfortunately, that’s how the current patent system works. It gives companies legal monopolies over a piece of technology, and not just for a year or two – but for as much as 17 years, which might as well be a century in smartphone years, the way technology moves these days. By the time those patents expire, they usually don’t even make sense anymore. Plus, they are used by the old companies owning them, to stop competition from entering the market.

Can new smartphone companies, actually enter the smartphone market now without owning thousands and thousands of patents, and even if they invent the phones themselves? No, I don’t think they can. They’d all have to pay a “rent” to Microsoft for simply being in the market, and not using Microsoft’s OS, like in the case of Android manufacturers. Heck, some of them are even using their OS, and Microsoft still demands them to pay the rent for using Android.

I honestly don’t know how companies like Samsung or HTC can just accept this. It’s like they think they get a privilege for using WP7. No – it’s actually Microsoft who needs these companies badly, not the other way around. It’s Microsoft who desperately needs to enter the mobile game.

Still, don’t think that Microsoft is “just fine” getting money from Android, and they “don’t really need WP7″. That’s completely false. Making money from Android rather than their own OS means that they don’t control the dominating platform of the future. Sure they can make some money off it (so far only a few tens of millions – peanuts compared to the $18 billion/year they get from desktop Windows), but they will be missing a ton of opportunities by not leading the game, like they do with Windows in the PC market.

Plus, getting money from Android is a very unstable and unpredictable “business”. Google will keep replacing the patents that Microsoft asserts against the manufacturers. Android 4.0 was probably already built with that in mind, and I can only imagine they’ll try doing that even more in the future. And one day, maybe a couple of years from now, the manufacturers will just say:

“Hey, you know what, we’re not infringing most of your patents anymore (or at least not the ones that would hold up in a Court), so we’re going to stop paying you. If you want to take us to Court, fine – bring it. But we’re also going to stop using WP7 – for good.”

When that day comes, Microsoft will be left with no share in the mobile market, and no royalty money from Android, either. It could happen even sooner than expected if B&N gets their way and the US regulators start probing Microsoft over this. They could actually manage to stop Microsoft from extorting all the Android manufacturers over trivial and ridiculous patents, especially if they win the lawsuit with them, too. If they win it, others might start going to Court with Microsoft, too.

[Source: Bloomberg]

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