Barnes & Noble has laid Microsoft’s proposed Android licensing agreements bare after several exhibits attached to an ITC complaint letter exposed Microsoft’s tactics and fees.
The software giant is currently facing the prospect of a potential investigation into its Android patent agreements following a complaint from Barnes & Noble. The company, who manufacturers a number of Android based ereaders, has asked U.S. regulators to investigate Microsoft’s Android patent agreements. Barnes & Noble wrote to the U.S. justice department last week claiming that Microsoft is attempting to raise rival’s costs to drive out competition.
The complaint follows Microsoft’s legal action against Barnes & Noble earlier this year. The software giant filed legal actions in the International Trade Commission and the U.S. District Court of the Western District of Washington against Barnes & Noble, and its device manufacturers, Foxconn and Inventec, for patent infringement by their Android-based e-reader and tablet devices that are marketed under the Barnes & Noble brand. Microsoft is seeking to block imports of the Nook e-reader according to documents the company filed earlier this year. Microsoft says the patents cover a range of functionality embodied in Android devices that are key to the user experience.
Growlaw has put together a detailed post on Barnes & Nobles claims and letters to the ITC and U.S. justice department. In it the site reveals that Barnes & Noble claims that Microsoft is demanding “prohibitively expensive licensing fees”, in effect asserting “veto power” over Android’s features. Barnes & Nobles says that Microsoft is demanding to control design elements in order to obtain an Android patent license. Barnes & Noble calls the process “oppressive and anticompetitive”:
In addition to the oppressive restrictions and prohibitions in Microsoft’s proposed licensing agreement, Microsoft is also demanding exorbitant licensing fees for the use of Android. Indeed, shortly after Microsoft sent Barnes & Noble a proposed licensing agreement on or about January 6, 2011, Microsoft confirmed to Barnes & Noble that it was demanding licensing fees [redacted] for each NookTM and [redacted] for each Nook ColorTM. It is Barnes & Noble’s understanding that these licensing fees that Microsoft demands for the use of the Android are the same, or higher, than the licensing fees that Microsoft charges for its own Windows Phone 7 — despite the fact that Microsoft only claims ownership of only trivial and non-essential design elements in Android-based devices, as opposed to an entire operating system.
Simply put, Microsoft is attempting to monopolize the mobile operating systems market and suppress competition by Android and other open source operating systems by, inter alia, demanding oppressive licensing terms directed to the entirety of Android, asserting this dominant position over Android on the basis of patents covering only trivial design choices and entering into a horizontal offensive patent agreement with Nokia….
Instead of focusing on innovation and the development of new products for consumers, Microsoft has decided to invest its efforts into driving open source developers from the mobile operating systems market. Through the use of offensive licensing agreements and the demand for unreasonable licensing fees, Microsoft is hindering creativity in the mobile operating systems market…. Through the use of oppressive licensing terms that amount to a veto power over a wide variety of innovative features in Android devices of all kinds, as well as its prohibitively expensive licensing fees, Microsoft is attempting to push open source software developers out of the market altogether.
Microsoft confirmed the Barnes & Noble complaint in a statement issued last week. “All modern operating systems include many patented technologies,” said a Microsoft spokesperson. “Microsoft has taken licenses to patents for Windows and we make our patents available on reasonable terms for other operating systems, like Android. We would be pleased to extend a license to Barnes & Noble.”
Microsoft is attempting to secure royalty payments from a variety of Android manufacturers. Microsoft has previously inked patent protection deals with HTC, Wistron, General Dynamics Itronix,Velocity Micro, Onkyo, Acer, Viewsonic, Quanta and Samsung. The deals reflect Microsoft’s efforts developing new products, according to the company. Microsoft is also chasing Motorola and Huawei for similar Android patent deals.