Barnes & Noble “exposes” Microsoft’s Android patent fees and strategy

By Tom Warren, on 14th Nov 11 6:53 pm with 71 Comments

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 HTCWistronGeneral Dynamics Itronix,Velocity MicroOnkyoAcerViewsonicQuanta 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.

  • Anonymous

    U MAD B&N??

  • Tim

    B&N is fighting an uphill battle. The licenses Microsoft has already obtained from large companies such as HTC, Acer and Samsung will work against B&N. Microsoft isn’t in a position to push companies like that around without having actual valid and valuable patents in their portfolio.

    • Tom

      My goodness, the titles on WinRumors are getting more and more sensationalistic.

      Barnes & Noble certainly did not “[expose] Microsoft’s Android patent fees and strategy.”  I’d be surprised if any of the licensees companies settled for even 1/4 of what Microsoft was demanding. The bit about controlling design elements can only be a negotiating tactic.

      Barnes & Noble exposed only Microsoft’s “tactics” against an *uncooperative* Android user like B&N.  Once Microsoft’s lawyers figured out that there was no possibility of amicable negotiations, they play hardball with the licensing demands.

    • http://www.winrumors.com Tom W

      What’s “sensationalistic” about the title? Did you not see the part where it says “exposes” in quotes?

    • Anonymous

      ah…i missed the quotes too :P sry…

    • Tom

      Indeed you’re right.  For “title,” read “lede.”  No quotation marks in the first sentence of the article.  Word choice carries certain ominous connotations: “laid … bare”, “exposed.”

      I don’t know, maybe this is all a cultural misunderstanding.  Maybe a British reader wouldn’t find anything sensationalistic about it.  There was that “faces probe” article recently, and that may have put me in a more skeptical frame of mind.

  • http://voguishtech.com Wemberg Carlo Estil

    You are using a stolen product, therefore you are part of the problem. Microsoft is doing the right thing to protect its intelectual property that google created mainly to crush microsoft, too bad they did not think this though. B&N Microsoft is not the problem, but google. if you need not to pay those patent royalty fee buy WebOS or create your own OS.

    • http://twitter.com/lightfoot256 Chris

      Creating your own OS is also completely out of the question; too many different companies own the patents for “trivial” things that we all now take for granted; You’d have to create a drastically different OS that you could prove behaved outside of the things they have patented (booting, file management, executables, memory management, graphics displays, keyboard input, etc etc)

    • Brandon

      It is about time somebody stood up to the BS microsoft is pushing.  Their patents are total bunk–go read them.  They didn’t innovate anything, it is just trivial things like how to name files and spinning an icon.  Hate to break it to you, but people have been naming files in an OS since long before microsoft even existed, and icons spun before microsoft patent lawyers were involved.  This is a great move, and helps competition.  Google didn’t “Steal” anything, microsoft is just scared of losing their monopoly, and has resorted to chicago style tactics to try and protect it, even in the face of totally fair competition.  More power to B&N!

    • Anonymous

      It’s irrelevant what you think. All that matters is what the courts say. Yes we know you hate Microsoft with every fiber of your being. Not innovative? What do you call MinWin, Kinect, XBox Live, Surface, Ribbon, Metro UI?

    • Bjg

       None of these technologies you cite are part of what they are going against B&N and other android users for licensing, so it becomes immaterial. That is what I am referring to by not innovating–to be clear, the cited patents Microsoft gave were not innovative.  What would be interesting is to find out how many technologies Microsoft pulled from Linux and rolled into their own tech. XBox Live is an online service.  I worked on the internet’s first GUI multiplayer game in 1991 (netrek), live online gaming isn’t anything new nor innovative. Surface is just a multi-touch screen on a large scale.  Cool, but unfortunately, just, a natural evolution of single-touch screens on a large scale.  MinWin is just a tight collection of the windows OS, nothing unique here. There are many cool kernel and OS technologies out there, dating back many years. Metro UI is about as cool and unique as ‘Aqua’ was–nothing really different, just microsoft trying to reskin things and claim they invented it (and I must note, Metro UI is as painful as the latest iterations of GNOME3 and KDE4).  The RIbbon is about the worst thing Microsoft has inflicted on the world since clippy.  Kinect.. that actually is cool, so gold-star to Microsoft.

    • Anonymous

       Ok now I know you’re trolling. You can point to everything Apple has come out with the last 10 years are just tweaks on others’ inventions.

    • Bjg

       B&N has posted a comprehensive list of prior art, obviating Microsoft’s patent claims.  http://www.groklaw.net/pdf3/BNobleITC-676372-464213.pdf

  • http://www.TheGuruReview.net TGR

    Well, nothing is free.    So B&N must pay.

    • Test1ngi23

      “Well, nothing is free.”

      I feel sorry for your sex life.

    • http://www.TheGuruReview.net TGR

      Don’t hate, feel sorry for yourself. Silly comments such as yours are very immature. However, its expected.

    • Xledger

      Well, my sex life isn’t free either. 
      While it SEEMS like it’s free, there are lots of hidden costs associated with it, the most obvious being being nagged at. Other costs include buying presents, dinners, movies, etc…

  • http://pulse.yahoo.com/_2WNLCWLJUCZ3WEHQUXJOVWISBA Wizard

    B&N soon to be Bare & Nude

    • Simplycani

      LOL

    • Jh

      LOL!!

    • Guest

      Bankrupt and non-operational.

    • Anonymous

      wow  how much bull can b&n spill? the go on about microsoft sizing a monopoly on mobile OS, how would that happen? there are plenty of players out there. It’s pathetic if you ask me, so sorry b&n, you are just sounding desperate.

    • Bjg

      Guys, you have been sucking from the microsoft coolaid bucket too long.  Microsoft is using effectively common-knowledge “patents” they obtained–remember, you can patent ANYTHING, including the process of how to swing on a swingset sideways–it is not the patent offices job to determine if a patent is valid or not, it is the court’s job.  Microsoft is relying upon this because they have a very LARGE legal team.  They take a list of effectively common-knowledge patents, then they seal them under NDA and go threaten to sue somebody if they don’t license from this secret list of patents you cannot read until after you sign the NDA.  This is unadulterated extortion, and it is anti-competitive and frankly about time somebody stood up to the gorilla that is microsoft.

      But don’t trust me in this–go read the patents yourself.  Make your own decision.  Truth will win out.

    • Guest

      I think for all of the companies involved, it is good to see someone fighting some of these less then appropriate issues.  

  • Guest

    Old news. B&N is desperate.

    • http://www.TheGuruReview.net TGR

      yes…

  • http://www.timacheson.com/ Tim Acheson

    I think Google is pulling the strings.

    • http://www.TheGuruReview.net TGR

      Didn’t Google promise to assit these companies? I guess they are assiting from the sideline. 

    • Guest

      MS’s subsequent submission to the ITC says that they have on “information and belief” that Google helped B&N put this together. This whole thread was covered last week. I don’t know why Tom is posting it again.

    • Tom

      Which is why Microsoft is going all-out on this.  Otherwise, Barnes & Noble would be too small to bother with.

      But if you can enforce your patents in court against a company that got into bed with Google, then that’ll quickly dissuade other companies from doing the same.

    • http://www.timacheson.com/ Tim Acheson

      Good points.

    • Anonymous

      I think the mutliple references in B&N’s statement concerning open source pretty much gives that away.

      I don’t quite remember B&N ever being a die hard open source advocate. Google however, is a different story.

    • Guest

      “A Google hand in Barnes & Noble’s antitrust claims?

      On page 10 of the PDF document, footnote 2 says this:

      Moreover, upon information and belief, Google has provided assistance to
      Barnes & Noble in defending against Microsoft’s Complaint. If that is the
      case, Google cannot help develop Barnes & Noble’s patent misuse claims
      behind the scenes, and then refuse to produce documents related to those claims
      in this Investigation.

      The expression “upon information and belief” suggests that Microsoft may not
      have hard evidence of Google’s assistance to Barnes & Noble, but appears to
      strongly suspect this to be the case.”

    • Tom

      Well, it’s actually plausible that Barnes & Noble hired a bunch of Linux fanatics who urged this course of action on them.

      Remember, they used to be just another bookstore.  The Nook was their first real foray into consumer electronics.  They basically hired a team from scratch — a team that chose to build their e-reader on Android.

    • http://www.timacheson.com/ Tim Acheson

      Exactly. B&N is moving its mouth but the voice that comes out is blatantly Google’s.

  • Guest

    You can imagine this is the last option for B&N… the hail mary if you will.

    • Guest

      More like intentional grounding. 10 yard penalty for B&N. Play continues.

  • http://www.facebook.com/people/Pedro-Roque/100000194503830 Pedro Roque

    “… on the basis of patents covering only trivial design choices…”

    If that’s trivial, why doesn’t B&N simply redesign that “trivial” stuff?

    • Guest

      Or eliminate the “trivial” stuff from their product. I guess them not doing so demonstrates the importance of the IP they stole. If B&N can take MS’s IP and then dictate exactly how much they’ll pay MS for it… then I should be able to shoplift a $39.99 book from B&N and when they catch me at the door successfully argue that since the price is too high, I will pay $7. Not!

    • Bjg

      I don’t mean to rain on your parade, but try reading the alleged infringing patents before making wild accusations about companies “stealing” technology and then trying to rationalize this unfactual accusation for your own actions. It is difficult to infringe on something everybody already does. If Microsoft took a patent out for walking down the right side of the street, yet people still continued to do so, would it make them right to sue each and every person who did it?  This is similar to the tactics they are pulling.  Educate yourself before making these claims.  http://www.groklaw.net/article.php?story=20111116222255905

    • Guest

      absolutely, its funny that you can so closely compare the open source community to a bunch of freegans. wanting everything in life for free and dont want to have to work for it. Sad to hear the courts are backing the hippies.

  • Anonymous

    Barnes and Noble can’t afford it, they are just putting up the only fight they can. They will most likely be bankrupt within a year regardless, which is sad.. Always loved their stores, although it has been years since I have been to one.

    • Anonymous

      I love their stores. I browse the books and then buy them in amazon :)

    • Tom

      The Android patent lawsuits are not B&N’s worst problem.

      Their worst problem is that Amazon is planning to razor-and-blade them to death.  If you’ve ever looked at an Amazon annual report, you’ll know that Amazon’s margins are insanely low — basically Wal-Mart low.  They’re pricing their e-readers at or below cost — and this is with economies of scale driving down their costs vs. B&N.

      It’s sort of like a poker game on the deck of the Titanic.  Even if you win, you don’t get to use the money.  And even if B&N wins the patent suit, it won’t get to enjoy the benefits of not paying royalty on those patents.

  • Johnboy

    Google, B&N, Samsung, Acer, etc are giant companies.  Together, they should be able to pony up enough money to dispute the pantent infringement in court.  But none seem to dispute the infringement.  They just complain about the fees.

    If I steal a book from a B and N bookstore, is that trivial?  Is it anticompetitive for B&N to make me pay.

    • Guest

      Google already beat you to the stealing books option ;-)

  • Anonymous

    “Microsoft is attempting to monopolize the mobile operating systems market ”

    Pathetic. Google has 50% of the U.S. market and still bought Motorola. Who wants a monopoly?

    • http://twitter.com/furdworetzky Fur Dworetzky

      It appears B&N is trying to make MS look worse by throwing around the “monopoly” word and seeing if it sticks with regulators.

  • Anonymous

    BN’s brick and mortar store model is a dying model. this is their last death throw. if they cared to survive they would sidestep the issue by just using meego or license web-os on their tables. heck just use a standard linux distro then. if MSFT beef is with google’s theft of IP, the smartest thing to do is to just dump android. in any case, BN has nothing invested in the success of android and given recent moves by amazon, they should care more about that then this trivial fight with msft.

    • Anonymous

      That’s kind of a shame though. I’ve always enjoyed going to a book store.

  • Anonymous

    B&N – haven’t been in one of their stores in ages.

    • Guest

      The library at the sanatorium must be well stocked. Or maybe you don’t have time to read anymore now that you troll full time.

    • Test1ngi23

      ArrowSmith doesn’t believe in reading.

    • Guest

      You two know each other well, do you? Is there a shill convention or something?

    • Guest

      Now you refer to yourself in the third person? Get help.

  • Adam

    i didn’t know b&n existed untill this

    • Anonymous

      Wait a while, and they may no longer.

  • http://twitter.com/efjay01 Ef Jay

    What is interesting to note is that B&N isnt claiming the claims are invalid because they are not infringing them but because they are trivial and the fees are to them, excessive. Seems they know they are using patented tech but just dont want to pay up (at the behest of google, perhaps?).

    • http://pulse.yahoo.com/_NZRPL7DK7DFQQO44J5TM4PQLGU Harvey

      Yep, I caught that too.  Not invalid, but too expensive.  Wow!

    • Anonymous

      That’s not actually true. While they do point out that Microsoft is in their opinion charging significantly higher fees for what they [B&N] consider trivial and insignificant features than an entire OS in wp per se, they do in every claim state they did not infringe in their opinion and go on to explain why. Their defense for not infringing is based on the existstance of prior art, which would invalidate microsofts claims in the first place if the gov finds their arguments convincing.

      What is google’s involvement in is and how will it impact the outcome is the key question. Barnes and Noble does not have the financial means to fight this battle to the end. Without a strong financial backing from someone with skin in the game there is no way any legal team would advise them to duke it out with Microsoft.

    • Tom

      I dunno, the legal advice that Microsoft got during the antitrust case was pretty bad.  Lawyers have a way of telling their clients what they want to think — and I stated earlier, it’s just within the realm of possibility that B&N hired a Trojan horse full of open-source advocates when they decided to enter the world of consumer electronics.

  • Anonymous

    It seems B&N has hired Google’s lawyers to write their opinions.

    • Anonymous

       Honestly the legal brief sounds like something out of the fever swamps of internet forums! Very embarrassing for B&N.

  • Anonymous

    The issue is simple. Pay for the Microsoft technologies that exist in Android. This isn’t news and B&N surely knew of the problem before launching its first Android product.

    If B&N thinks Microsoft should simply release its technology to Android OEMs for free, then they should walk the walk and open up their proprietary Nook eBook format to open source and allow others to resell Nook books outside of B&N’s walled garden.

    I won’t hold my breath. B&N’s selectivity on IP belies its broken business model.

  • Anonymous

    B&N’s claim is that Microsoft has no leg to stand on because of prior art. This is a weak defense. I can’t imagine Microsoft’s IP team not looking into the prior art and the disclosures around similar arts that they’re trying to assert against these OEMs including B&N.

    If B&N is hoping to confuse the ITC and the DOJ, then it better hope really hard. If Microsoft really did snooz at the wheel and filed BS patents they will come crumbling down soon.
    For some reason I can’t see myself betting on the B&N side in this battle however. I see this as a way to stretch the process and delay the inevitable.

    • Tom

      I do wonder about that.  It’s plausible that Microsoft chose patents that weren’t the strongest in its arsenal.

      Because in the weird world of patent litigation, you do not want to put your most valuable patents at risk.  Only if you lose the lawsuit do you try again with a different set of patents.

  • Biased

    In a different but ironic story, in the U-village in Seattle… A Barnes and Nobles closes and a Microsoft Store opens…

  • Anonymous

    That’s was a lot of word to say MS is being mean. It’s simple, if the patents are questionable, got to court and fight them. Why are you asking the government to do your dirty work? Last I hea Are they saynrd, MS was charging around $5 per device. Are they sayng MS charges $5 for WP7 licenses? If the design choices are trivial, remove them. Android is supposedly open source. B&N can change the design choices to avoid MS patents.

  • Anonymous

    It’s really simple if you think a function or an product is to expensive don’t use IT!

    Just WOW!

  • Anonymous

    Tom, are you fishing for clicks here? First, nothing B&N wrote exposes or lays bare anything of Microsoft’s strategy on Android that we don’t already know. Second, this isn’t the first time B&N has written to DOJ about Microsoft. I sincerely doubt their letters will trigger any type of investigation. The case is in the adjudication process already. B&N seems increasingly desperate to circumvent that. Third, if anything of substance was revealed in B&N’s document, it was that they don’t dispute that Micrsoft’s claims are legitimate, only that MS seeks “excessive” payment for “trivial” issues. That seems the exact type of thing the administrative and court processes were set up to resolve, certainly not the kind of thing DOJ typically “investigates.”

  • John

    I usually don’t buy anything from B&N just very few times I buy book from them.

    But from today there is no way I buy even one single thing (book and etc.) from B&N anymore if that’s how it is with B&N.

    I prefer to pay overnight shipping to Amazon to get my book that buy it from B&N. Even in this case it will be cheaper than B&N.

    But B&N will not get my money anymore.

    Plus it’s funny that they talk about monopoly but they just bought Borders to have monopoly for selling books and stuff to people. So the monopoly here is actually B&N itself!