Why Microsoft Is Playing Hardball with Motorola

Right now there are so many lawsuits flying over the Android mobile operating system - involving Apple, HTC, Motorola, Oracle, Google and Microsoft - that you’d think Google had cobbled it together out of code stolen from every major technology company on the planet.

The latest is particularly bold - Microsoft is suing Motorola over a portfolio of 9 patents that, it says, Motorola is infringing by using Android on its popular Droid handsets.

In the past this kind of behavior has caused Microsoft’s rivals to call the company a “patent troll” and worse. “They’re basically the alley thugs,” said Salesforce.com CEO Marc Benioff, in a recent earnings call. “Every thriving economy has alley thugs and we do too. And that’s fine.”

Everyone has their theory about why Microsoft is doing this. Perhaps it wants to scare handset manufacturers away from Android (Motorola used to build Windows-based phones, but no more), or perhaps it thinks that getting a nickel in licensing fees every time one of these phones is sold will have a material effect on the company’s bottom line.

According to intellectual property lawyer Spyros Lazaris, who has handled litigation on technology IP for Samsung, Deutsche Bank and others, the situation is probably a lot simpler.

In his opinion, the spat is likely to be the end result of ongoing, and now failed, licensing negotiations between Microsoft and Motorola - the sort of thing he’s seen a lot of in his time as a litigator.

“Licensing negotiations go on in the background every day, all the time,” says Lazaris. “When those talks break down, the next recourse is a patent lawsuit.”

The good news is that these kinds of cases rarely go to trial. “When they can’t come to agreement, one files a lawsuit and usually there’s a counter claim,” he says. “Then they get together after a few million dollars have been spent; eventually they’re forced into an agreement.”

The bad news for Motorola is that Microsoft’s choice of venue indicates that the company is ready to play hardball: one of Microsoft’s suits was filed in district court in Washington, but the second was filed with the International Trade Commission.

“The ITC tends to move very quickly - so fees get high very fast,” says Lazaris. “They really have forced the issue in this instance.”

Microsoft’s ultimate goal probably isn’t to keep Motorola from using Android at all, but merely to add a cost component to Android, which is currently free for handset makers to use, whereas Microsoft’s Windows alternative carries a licensing fee.

As Microsoft CEO Steve Ballmer told the Wall Street Journal, “Android has a patent fee. It’s not like Android’s free. You do have to license patents. HTC’s signed a license with us and you’re going to see license fees clearly for Android as well as for Windows.”

What Ballmer means is that the licensing fee for Android will be paid to Microsoft, which had nothing to do with the construction of Android, and not Google, which is responsible for the OS. I think we’re about to find out whether Google, the only player in this psychodrama who has yet to sue anyone, will continue to embrace pacifism, or whether the mantra “don’t be evil” includes an allowance for self-defense.

original kickboxing image cc Claudio Gennari

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