

Google Responds To Microsoft’s "Gotcha": They’re Diverting Attention - profitbaron
http://techcrunch.com/2011/08/04/the-greatest-trick-microsoft-never-pulled/

======
kenjackson
I'm glad Google finally just came out and said it, rather than trying to say,
what they said previously, which was that MS and Apple were trying to keep the
patents from them. A tip for Google, the truth works better, even if it
requires a few more sentences to tell it.

On the actual merits though, Google seems to be completely lost in the world
of IP tactics. They should have worked to remove all of these patents off the
table as cheaply as possible. The available cash that MS+Apple simply dwarfs
what Google has. Head to head, if MS+Apple want the patents they'll win them.
Trying to win them outright as defensive patents was a stupid attempt.

The fact that their current IP strategy seems to be to buy IP is absurd.
Google really needs to start producing significant IP in the mobile space.
Their current IP strategy is naive, and likely costly. The fact that they
didn't think about this three years ago, when Jobs was on stage talking about
patenting everything, up and down, is a firing offense, IMO.

~~~
joebadmo
Maybe I'm being naively optimistic, but if we take Google to be both unafraid
to take risks and long-term in its thinking, we can interpret all of its
actions as spending as little as possible on patents while getting opponents
to spend as much as possible and simultaneously undermining software patents
at large.

Seems to me like Google is taking advantage of a growing anti-patent sentiment
in the tech community that's beginning to spill over into the mainstream and
capitalizing on the idea that the innovation-stifling patent regime is
contributing to a stagnating economy.

Exhibit A: [http://www.bloomberg.com/news/2011-08-02/google-hires-
federa...](http://www.bloomberg.com/news/2011-08-02/google-hires-federal-
trade-commission-intellectual-property-expert-michel.html)

Exhibit B:
[http://www.economist.com/blogs/democracyinamerica/2011/08/in...](http://www.economist.com/blogs/democracyinamerica/2011/08/intellectual-
property)

Exhibit C: [http://www.thisamericanlife.org/radio-
archives/episode/441/w...](http://www.thisamericanlife.org/radio-
archives/episode/441/when-patents-attack)
[http://www.npr.org/blogs/money/2011/08/04/138934689/the-
tues...](http://www.npr.org/blogs/money/2011/08/04/138934689/the-tuesday-
podcast-the-patent-war)

~~~
kenjackson
Probably naively optimistic. ;-)

The public generally doesn't care. The courts won't change course without
congress. Congress won't make a big change. Minor reform at best (I doubt
we'll see much more than what is already in the oven).

The problem is that Android isn't viewed as innovative by most consumers. I
think in a PR battle between Apple saying Google copies, and Google saying
that Apple is blocking them from innovating -- Apple wins.

And the other issue is that a lot of the patents at stake are HW patents.
Undermining HW patents is a much harder sell.

~~~
rbanffy
> Congress won't make a big change.

Every dollar Microsoft spends on patents cannot be spent on lobbies. And the
other way around applies to Google: every dollar not spent chasing patents can
be spent lobbying for patent reform.

And, while that leaves hardware patents untouched, they are not the problem.
Microsoft is extorting Google partners using bogus software patents, not
hardware ones.

~~~
kenjackson
_Every dollar Microsoft spends on patents cannot be spent on lobbies. And the
other way around applies to Google: every dollar not spent chasing patents can
be spent lobbying for patent reform_

This isn't a matter of lobbyist, rather that congress already has a big piece
of legislation they're moving now on patent reform. First-to-file is years in
the making. And for 95% of patents its a total no-op. Congress just will not
move quickly on this. And I think Google is going to focus its lobby efforts
trying to keep people away from serious antitrust investigations against them,
more than patent reform.

 _And, while that leaves hardware patents untouched, they are not the problem.
Microsoft is extorting Google partners using bogus software patents, not
hardware ones._

Google wants to make this anti-MS, because MS has a worse rep. Their real
concern though is Apple. For example, notice who's not shown interest in the
InterDigital patents? Microsoft. Who has? Apple, Google, Samsung.

Apple doesn't want to get $10/handset for Android. They want to block Android
from shipping, period. And Apple IS using HW patents to block Android. For
example, they've used HW design patents such as #D618,677. Or even this patent
on volume rockers: #7,863,533.

MS is happy to just collect some revenue, and try to slow Android down so they
can get their phones up to speed with Mango/Tango. MS will never make a lot of
money directly from the cell phone market. 100M units sold is about $1.5B in
direct revenue for them. Not chump change, but not a lot of money (on par with
about how much money Visual Studio makes). For Apple this is almost their
complete business now. They make $250/unit. $10 royalty from Samsung doesn't
offset the fact that someone bought an Android machine rather than iOS.

Plus the Nortel patents give them a bunch of HW patents that Apple will likely
assert, especially if Android begins to make another push.

~~~
patrickaljord
HW patents are useless against Android. Android is just software. If Apple
want to attack OEM on hardware patents, good luck to them. Samsung, Motorola
and even HTC (with S3 and even their own) have tons of HW patents, this is a
game Apple cannot win as all OEM could block Apple from shipping their
devices, remember, only only one patent from these OEM has to be valid to
block Apple from shipping. Actually, the same can be said about software
patents too...

~~~
kenjackson
_HW patents are useless against Android. Android is just software._

It's HW patents against devices running Android.

 _If Apple want to attack OEM on hardware patents, good luck to them._

If? Those patents I shown are part of actual lawsuits against Samsung/Motorola
in court now. This isn't a hypothetical -- I'm telling you what is happening.

 _Samsung, Motorola and even HTC (with S3 and even their own) have tons of HW
patents, this is a game Apple cannot win as all OEM could block Apple from
shipping their devices, remember, only only one patents from these OEM has to
be valid to block Apple from shipping._

Apple has taken that plunge already. Again, this isn't a hypothetical. All
three companies you note are in court already. All three have countersued.

I'm not saying this might happen. I'm saying it is happening. Apple has
already asked, and in at least one country received, injunctions on devices.

Apple isn't sitting around saying, "Lets just use SW patents to stop Android
the operating system proper". They're using HW and SW patents and trade dress,
and trademark to go after Android (indirectly by targeting OEMs and devices
running the SW).

Google supporters seem to think this is a fight against the evil empire of
Microsoft, and want to ignore Apple exists. It would be convenient if they
didn't, but the fact of the matter is that Apple is likely to be the real fly
in the ointment. MS might slow Android down, but it'll be Apple who crushes
it.

~~~
joebadmo
You're right. I never liked when Apple started waging war on Android over IP,
especially in light of their wholesale copying of Android's notification
system, for example, but it didn't seem particularly out of character, and it
seemed in line with Steve Jobs being offended by Android.

But Apple teaming up with Microsoft is what made the issue cross some
threshold for me. Individual corporations acting in independent self-interest
is one thing, but industry incumbents forming a cartel to shut out
competition, even if it still counts as self-interest, for me crosses a line.

------
sriramk
Here's the response to this response :)
[http://techcrunch.com/2011/08/04/gentlemen-take-this-
outside...](http://techcrunch.com/2011/08/04/gentlemen-take-this-outside/)

On an unrelated note, this is a very different kind of MSFT PR, and almost
completely brought about by Frank Shaw. In the old days, MSFT would have put
out a boring press release filled with corporate speak. Frank has brought a
real-time, plain-speak, slightly aggressive approach to dealing with crises
like this one and the earlier Bing/Google toolbar spat. Interesting shift in
PR strategy.

~~~
sek
But he doesn't make a good impression, soon he has to explain why Microsoft is
attacking android with patents. There was no "gotcha" and these people on
Techcrunch see this whole thing as a reality show. It is sad because this is
serious stuff, Microsoft is fighting Google with unfair methods.

~~~
sriramk
Unfair is all relative - people think it is unfair Google is giving away
Android for free by funding it with its search revenue. I don't agree with
what MSFT is doing with Android patents but they have a stock answer which I'm
sure they'll repeat.

~~~
sek
What are you doing on Hacker news? This is all about disrupting industries
trough a better product. Android is free so this is obviously an improvement
to something you have to pay for, or do you call Linux unfair? When Microsoft
can't build a product that justifies a higher price that is their problem,
Apple figured that out so it isn't impossible. Unfair (or use another word) is
in my eyes trying to beat Google in anything other than the Product itself,
for example forcing Android producers into paying extra with a broken patent
system.

~~~
sriramk
First, minor nitpick - Apple is going after Android with various lawsuits as
well. But let's keep that aside.

Contrast these arguments - back in the 90s, MSFT was accused of killing off
Netscape by essentially giving away a browser for free using the revenue from
Windows and Office. One could argue that Google is doing the same thing,
funding Android with its revenues from ads.

Let's forget Android for a second -look at turn-by-turn navigation. That's an
expensive product to build but Google, by giving it away for free (again,
subsidized by its other revenues) and is causing serious trouble to other
companies which have the misfortune of not having an alternative revenue
source.

Is it 'fair' that Google can basically disrupt industries by giving away
things for free just because it gets money through another source? You can see
how that argument could be made, whether it is right or wrong.

I personally don't think any of this is either 'right' or 'wrong'. It's all
business between corporate behemoths.

~~~
joebadmo
But Google's products aren't artificially free the way IE was, they just have
different revenue sources. Android turns a profit for Google, so it's not
really subsidized by its other revenues.

And another important part of the MS antitrust lawsuits were that they were
bundled with the OS, which they had a monopoly on in the market. Google's
closest thing to a monopoly is in search, and you can use search without using
Android.

The two cases are only superficially similar.

I notice, though, that you don't seem to actually advocate any position; you
merely attribute accusations of unfairness to "people." If these positions
aren't yours or you don't agree with them, why bring them up? If they are your
positions, why not state that clearly? Your slippery lack of position just
makes me trust your arguments less.

~~~
recoiledsnake
>But Google's products aren't artificially free the way IE was, they just
different revenue sources. Android turns a profit for Google, so it's not
really subsidized by its other revenues.

<http://techcrunch.com/2011/03/25/search-googles-castle-moat/>

>And another important part of the MS antitrust lawsuits were that they were
bundled with the OS, which they had a monopoly on in the market. Google's
closest thing to a monopoly is in search, and you can use search without using
Android. >The two cases are only superficially similar.

What about this then? [http://www.webanalyticsworld.net/2008/01/mapquest-vs-
google-...](http://www.webanalyticsworld.net/2008/01/mapquest-vs-google-maps-
google-closing.html)

Or Google finance and other Google services?

~~~
joebadmo
re moat: That's certainly an interesting way to look at it, but it doesn't
change the fact that Android _does_ make money, both for Google and for
carriers/manufacturers. So, again, it's not an artificially lowered price, and
while it certainly augments search, it's not subsidized by search.

Your argument for maps and finance is stronger, but the analogy isn't great.
For one, Google doesn't have close to the monopoly that MS had. For another,
it's really hard to draw the line between the products, and equally hard to
say whether Google's use of its search engine to point to its own services is
unfair, if it really believes its own products are better. I would
characterize their position on this issue as still some distance from MS + IE
on the 'fair' to 'unfair' spectrum, but still in 'fair' territory. Of course,
I never found the bundling line of argument against IE to be particularly
compelling.

~~~
recoiledsnake
Thanks for the downvotes, HN!

>That's certainly an interesting way to look at it, but it doesn't change the
fact that Android does make money, both for Google and for
carriers/manufacturers. So, again, it's not an artificially lowered price, and
while it certainly augments search, it's not subsidized by search.

Google's revenue sources from Android are mostly mobile searches that would
happen anyway. I bet they make as much if not more from iOS devices.

<http://techcrunch.com/2010/10/15/google-android-money/>

[http://www.mobilespoon.net/2011/07/can-microsoft-generate-
mo...](http://www.mobilespoon.net/2011/07/can-microsoft-generate-more-
revenues.html)

It's a moat because Google was afraid that it might get locked out of mobile
search default (eg. WP7) and while iOS uses Google, what if Apple changes the
default to iSearch or Bing? Remember how Apple didn't approve Google voice for
iOS for a whole year? Google would be screwed out of mobile search revenue in
a big way, esp. if Bing/iSearch/xyz are close enough to Google.

>Your argument for maps and finance is stronger, but the analogy isn't great.
For one, Google doesn't have close to the monopoly that MS had. For another,
it's really hard to draw the line between the products, and equally hard to
say whether Google's use of its search engine to point to its own services is
unfair, if it really believes its own products are better. I would
characterize their position on this issue as still some distance from MS + IE
on the 'fair' to 'unfair' spectrum, but still in 'fair' territory. Of course,
I never found the bundling line of argument against IE to be particularly
compelling.

Google has a LOT of marketshare, esp in many non US regions. Eg 91% in UK.

[http://www.chandlernguyen.com/2011/03/search-engine-
market-s...](http://www.chandlernguyen.com/2011/03/search-engine-market-share-
by-country-mar-2011.html)

IE was actually better than Netscape in the late 90s, early 2000s. Netscape
screwed itself by not releasing a new version during the dotcom boom between
1997 and 2007. <http://www.joelonsoftware.com/articles/fog0000000069.html>

So the point about Google really believing that it's product was superior
doesn't matter. A maps startup would need to be 10x better than Google maps
out the game to even get funding since searching on Google for the name of a
city doesn't even mention MapQuest, Bing Maps or Yahoo Maps. Would you support
a forced default map choice on Google like the one for browsers in EU on
Windows?

~~~
joebadmo
re moat: I don't see how your points here speak to your argument that Android
is uncompetitive. It's an attempt not to get locked out of the mobile search
market. If anything, it promotes competitiveness.

A LOT of marketshare isn't a monopoly and I'm not sure what bearing regional
marketshare has on your argument. A search for "Portland Or" gives me mapquest
on the second page. "Portland Or Map" gives me mapquest as the second search
result.

"IE was actually better than Netscape in the late 90s, early 2000s. Netscape
screwed itself by not releasing a new version during the dotcom boom between
1997 and 2007."

So, are you arguing that MS was being perfectly fair and shouldn't have been
convicted? At this point, I'm really not sure what you're arguing. I think my
position is pretty clear. Are you arguing:

1\. MS was wrong and now Google is similarly wrong. 2\. MS was not wrong, but
Google now is. 3\. MS was perceived as wrong by the public, and so Google will
be too because of similarities.

It's starting to sound like you're representing 3, which isn't very
interesting to me.

------
shabble
_The Nortel patent purse had over 6,000 patents, but InterDigital has over
8,800. If the winning bid on Nortel was $4.5 billion, InterDigital should be
well north of $5 billion._

Not quite sure where this logic comes from. Surely they're only valuable if
they're relevant and strategically useful?

~~~
kenjackson
[http://www.bloomberg.com/news/2011-08-03/samsung-is-said-
to-...](http://www.bloomberg.com/news/2011-08-03/samsung-is-said-to-examine-
interdigital-s-patents-after-approach-for-bid.html)

 _InterDigital’s engineers invented some of the technology for high-speed
mobile phone networks now used by the world’s biggest handset makers._

This is a link on some of their "breakthroughs" covered in their patent
portfolio:

[http://www.interdigital.com/patents/category/patent_portfoli...](http://www.interdigital.com/patents/category/patent_portfolio)

"North" is the key word here. This could get crazy. I bet Nathan Myrvhold is
laughing to the bank right now.

~~~
corin_
The issue is that, rather than making judgements like you have done, reporters
have been finding it easy to base suggestions on the numbers, suggesting the
reason they would be worth more is that there are more of them.

------
redthrowaway
>The Nortel patent purse had over 6,000 patents, but InterDigital has over
8,800. If the winning bid on Nortel was $4.5 billion, InterDigital should be
well north of $5 billion.

That's $5BB that won't be used to create new products and technologies. It's
$5BB that won't be used to hire new employees, and it's $5BB taken out of the
pockets of shareholders. At least taxes go back into the economy. They might
as well throw the money in a pile and set it alight.

------
wuster
I'm getting really sick of MG's sensationalist writing. He's the reason I've
unsubscribed from TC.

~~~
f7u12
TC in general seems to have been very sensationalist lately. I now take them
about as seriously as I do Daily Mail.

------
badclient
Can someone translate this? What exactly is google arguing in their response
to MS?

It sounded to me that google's response was that they didn't partner because
then they could not keep those patents _just_ to themselves. Somehow I feel
I'm misunderstanding it? That sounds too dumb of a response to be accurate.

~~~
ZeroGravitas
Google claimed that Android was being attacked with patents.

Microsoft responded that they invited Google to jointly buy patents.

Microsoft is currently threatening Android hardware partners with their
existing patents to extract fees. Patents jointly owned by Google and
Microsoft would not affect this, patents owned only by Google could force
Microsoft to back down.

------
palish
Offtopic: What movie is that screenshot from? (
[http://tctechcrunch2011.files.wordpress.com/2011/08/f1.jpeg?...](http://tctechcrunch2011.files.wordpress.com/2011/08/f1.jpeg?w=288)
)

~~~
dhugiaskmak
Face/Off

<http://www.imdb.com/title/tt0119094/>

~~~
palish
Aw. Was hoping to discover a decent older movie.

EDIT: That's more like it... the next TechCrunch article uses a screenshot
from Reservoir Dogs, which was a pretty awesome movie IMO. (
[http://tctechcrunch2011.files.wordpress.com/2011/08/reservoi...](http://tctechcrunch2011.files.wordpress.com/2011/08/reservoir-
dogs-fig-5.jpeg?w=288) )

------
giberson
Wait wait wait wait.

 _A joint acquisition of the Novell patents that gave all parties a license
would have eliminated any protection these patents could offer to Android
against attacks from Microsoft and its bidding partners._

Having the license to the patent means you get to use the patented technology
--no one can come after you. That's the protection, you get to use it. This is
bullshit, Google didn't decline the offer because it didn't give them
protection, they declined the offer because it didn't give them an ability use
those patents against Microsoft.

~~~
joebadmo
You need to learn how defensive patents work.

<http://en.wikipedia.org/wiki/Defensive_patent_aggregation>

It's not just to stop from being sued over that particular patent, but to be
able to use that patent to counter-sue when litigated for other patents.

Google has yet to use any of its patents offensively.

~~~
eridius
Google didn't argue that this patent purchase was for defensive reasons. They
argued that it was for offensive reasons, that these patents could then be
used to attack Google and force licensing fees onto Android. That entire
argument is negated by the fact that Google had the option of bidding jointly
on the patents and, therefore, having a license to them.

~~~
juiceandjuice
Google wanted the patents to fight back against Microsoft, since Microsoft is
the one probably leveraging the greatest patent tax against Android devices. A
joint ownership of the patents would be useless against Microsof. They could
leverage them against Apple, or Oracle, or other parties that didn't own them,
however, but even that could be to Microsoft's benefit.

Keep your friends close, keep your enemies closer, and the enemy of my enemy
is my friend.

~~~
cube13
>Google wanted the patents to fight back against Microsoft, since Microsoft is
the one probably leveraging the greatest patent tax against Android devices. A
joint ownership of the patents would be useless against Microsof. They could
leverage them against Apple, or Oracle, or other parties that didn't own them,
however, but even that could be to Microsoft's benefit.

Here's the problem: Even if Google won the Novell bid, they would not be able
to use the patents as a defense against MS. MS is licensing the patents from
Novell, and I think that if any other party bought the patent pool, they would
continue to license them from whomever bought the pool. So Google couldn't use
them in a defensive manner. They could make life annoying for MS by increasing
the fees, but that's about it, especially because if they increased the fees
too high, they'd doing the exact same thing that MS is.

Plus, I think that the DoJ's decision to put the patents under GPLv2 and the
OIN patent license would have been made regardless of who actually bought the
pool, considering that a lot of the patents apply to Linux. So even if Google
had won, it's not clear if it would have actually helped them in the end.

~~~
juiceandjuice
I can't believe Microsoft is licensing _all_ of them, otherwise they wouldn't
care about them as much. In fact, they probably wouldn't have even bothered to
buy them, especially if they thought the DoJ would rule in the way that they
did.

The DoJ ruling merely means they can't really leverage those patents against
Google to stifle them more, which I'm sure the legal departments of Apple,
Microsoft, and Oracle would have loved to do. It means those patents are less
of a threat, but it wasn't a win for Google either.

I don't agree that the DoJ would have made the same decision in the case that
Google had exclusively won the patents. I think the litigious nature of Apple,
Oracle, and Microsoft, especially towards Android, had quite a bit to do with
that decision.

I feel like Google is pulling the same thing they pulled with the FCC's 700Mhz
Spectrum auction: Highlighting the faults of the system, advocating for
consumers, getting some help from the government and trying to get their way
without actually paying for it.

~~~
cube13
>The DoJ ruling merely means they can't really leverage those patents against
Google to stifle them more, which I'm sure the legal departments of Apple,
Microsoft, and Oracle would have loved to do. It means those patents are less
of a threat, but it wasn't a win for Google either.

No. The DoJ ruling means that they can't leverage the patents against Linux.
The OIN patent license only applies to Linux code. That doesn't necessarily
apply to the Android UI, for example.

That's the primary reason that I think the DoJ would have made the same
ruling. It gives the Linux code the same protections that they had with
Novell.

------
shareme
Folks, the longer this goes on more startups lose.. TC should know better than
to get involved in one-upmanship that hurts startups..

Whose startup among HN readers can afford patent lawsuits say if either MSFT
or Google come knocking?

So where is the coverage of how dismal the current patent reform legislation
at TC?

~~~
polyfractal
There was a Stanford Entrepeneural Thought Leader Seminar where the speaker (I
forget who) said:

"The day big corporations come knocking at your door threatening
lawsuits...that is the day you know you've made it".

No startup will have to worry about patent litigation from giants, unless they
are perceived a threat. And if they are perceived a threat, they are
significant enough to combat or negotiate their way out of it.

