A Solid Foundation for Patent Peace

Posted by Brad Smith & Horacio Gutierrez
Executive Vice President & General Counsel and Corporate Vice President & Deputy General Counsel, Microsoft

July 18 marked the effective date for the International Trade Commission’s order excluding from the U.S. market Motorola’s Android devices that implement Microsoft’s ActiveSync technology. In addition, Microsoft has secured two injunctions against Motorola devices in Germany for its infringement of other Microsoft patents.

Over the last few weeks, with the imminence of the ITC exclusion order, Google mounted a public relations and lobbying campaign deflecting attention from its refusal to honor its promise to standards bodies to license standards-essential patents on fair, reasonable and non-discriminatory (FRAND) terms, a practice that has prompted regulators on both sides of the Atlantic to investigate its conduct. Unfortunately, we have no reason to believe that Google’s diversionary tactics will cease any time soon, and in fact expect more of them in the future.

Microsoft has always been, and remains open to, a settlement of our patent litigation with Motorola. As we have said before, we are seeking solely the same level of reasonable compensation for our patented intellectual property that numerous other Android distributors – both large and small – have already agreed to recognize in our negotiations with them. And we stand ready to pay reasonable compensation for Motorola’s patented intellectual property as well.

But a lasting solution of these disputes will not be reached by leaking settlement positions through the press. In fact, this type of conduct is far more likely to hinder rather than facilitate a resolution. Ultimately, patent peace will be found through good faith engagement that is based on two simple, common sense principles:

First, any agreement must be comprehensive. Any approach that does not lead to the cessation of all the pending litigation will be short lived. Motorola’s public proposal to take a license for only a small sub-set of the large number of Microsoft patents used in its products will not result in durable patent peace. That proposal was cleverly designed by Motorola to sidestep the ITC exclusion order by “cherry picking” the ActiveSync proprietary technology that gave rise to that order, while continuing the remaining lawsuits against Microsoft in the U.S. and Germany. This is not a recipe for patent peace, but only for selectively disarming an opponent.

Second, any agreement must be based on market rates. There are good objective benchmarks to value the patents involved in our disputes. For example, Motorola has asserted patents that it claims are essential to the H.264 industry standard, a video codec standard that is used to encode and decode more than 80 percent of the video on the Internet. Twenty-nine companies owning more than 2,400 patents essential to the standard license them via a patent pool, and more than 1,100 companies (including Google) are licensees. Clearly, this pool provides a widely accepted market rate for H.264 patents. Likewise, Microsoft has licensing agreements with makers of a majority of Android handsets sold in the U.S. These agreements show broad industry acceptance of our licensing rates. These and other well-established market rates, along with appropriate safeguards to ensure Google lives up to its FRAND commitments in the future, provide the basis for a durable settlement between the parties of their existing patent disputes.

This particular litigation now stands at a crossroads. With its phones and tablets now subject to injunctions in the U.S. and Germany, Google can no longer doubt the relevance of Microsoft’s patent portfolio to Motorola’s products. Google can take one of two paths: it can choose either to engage in serious discussions to search for patent peace or persevere in its diversionary tactics. We hope it will choose the first course, and we stand ready to engage in good faith if it does.

Comments (13)

  1. __hAl__ says:

    Software patents are an indefensible joke that stifle innovation and consumer choice. They are, however, great for the legions of slimy lawyers.

  2. G.T. says:

    The vampire wants blood sucking agreement with Android, nice 🙂

    Microsoft reputation, software, and services is way down, bulling Android will make it worse.

    go invent something, compete, make a product that will make the people stay in lines for days.

  3. G.T. says:

    I went to the bathroom and i felt good, patent that!

    software patents is one of the stupidest thing ever created, good job

  4. richardo says:

    You started all this mess with your Android OEM patent extortions and secret NDA's. I say good on Google and Motorola. I hope they invalidate all the patents you like to troll and spread FUD with (such as FAT).

    It's high time software patents were abolished, especially with companies like Microsoft and Apple using them for anti-competitive behaviour.  

  5. Mike S. says:

    Software patents are the root of evil software–and tend to only benefit those that hold the most software patents or those that do little more than horde patents. I look forward to the day when software patents are worth just a little more than the paper they're written on.

  6. Blog says:

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  7. Charbax says:

    You are lying. Samsung, HTC, Huawei, are NOT paying an Android licence! They ship Windows devices! They are making Windows Phone and Windows 8 devices!!! You are liars!

    Android device makers should pay $0 to Microsoft to ship Android devices. You own absolutely no valid patent over Android and Linux. You should be ashamed of yourselves to suggest that Microsoft needs to be paid for every Android and Linux device that is shipped in the world.

    You are disgusting. It's quite frankly ridiculous that in 2012, that Microsoft's strategy is to make people think that Microsoft deserves to get paid for when companies use free open source Linux Android software on their devices.

  8. abc4 says:

    Microsoft phone is not selling, as it looks like the phone is better in every aspect than Android and iPhone, still, Microsoft Phone is not selling.

    Maybe it is not the phone this time, maybe it is Microsoft this time, it is called reputation, you lose it, and you lose many customers, regardless of the product.

    People buy overpriced and way overpriced luxury items, not because of the product, it is because of the name behind it.

    There were days when I only installed Microsoft products on my machine, today I look twice for an alternative before I install something from that garbage.

  9. Jon says:

    Mmm, someone on here really loves Android (and doesn't have a clue what patents are for). Please, please you android lovers look into the implications of Google's attempted use of standards essential patents to block competitor device sales, then extrapolate what this means if it is allowed to stand… yes, every single electronics device will increase in costs, there will be a huge disincentive to create technical standards, HUGE amounts of new litigation… yes, the one that you love is really the one that has the potential to do the most damage if its FRAND litigation is allowed to stand.

  10. abc4 says:


    Software patents are there to slowdown everyone else from inventing things, Microsoft patented "when a mouse hovers over a moving text, the text must stop moving" nice work 🙂

    it was ssssssooooooo hard to figure out, this is why they maybe hired 20 people with a fake budget of millions of dollars to figure out that.

    patents are very badly abused by everyone.

  11. anonymous says:

    tired of this patent talks over the software industry, go innovate!

  12. Dave says:

    Wow the comments on here are frankly absurd. Have you even read this or understand what is the issue. You seem to be talking about Microsoft FRAND agreements as if they invented them whilst completing ignoring the fact the dispute is with Google/Motorola and its FRAND claims.

    Google it would seem are not the only people deflecting around here.

  13. pennyauction says:

    yes, they should have a solid foundation for their patents. As long as its used wisely then this can be of great use to people.