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Microsoft To Charge Phone Makers a Licensing Fee 225

Posted by Soulskill
from the how-magnanimous-of-you dept.
angry tapir writes "Microsoft may be one of the only remaining mobile operating-system providers that charges handset makers a licensing fee, but in exchange vendors get at least one important benefit: protection from intellectual property worries. 'Microsoft indemnifies its Windows Phone 7 licensees against patent infringement claims,' the company said. 'We stand behind our product, and step up to our responsibility to clear the necessary IP rights.'" In related news, Windows Phone 7 will be exclusive to AT&T at launch, and it seems Microsoft is counting on Xbox Live integration to be the "hook" that gets people interested in the new devices.
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Microsoft To Charge Phone Makers a Licensing Fee

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  • by LostCluster (625375) * on Friday October 01, 2010 @01:33PM (#33761950)

    One of the reasons why big business loves Windows and isn't that interested in Linux other than maybe Red Hat is because if things go horribly wrong, there's somebody with deep pockets to sue. What Microsoft is offering here is a classic part of their business plan... if somebody comes up with a submarine patent they'll take the legal pain so their customers don't have to.

    Remember the lesson of SCO and Darl McBride.... even though the claims had no legal merit, they still were messy enough that it was cheaper to pay the settlement price than fight them and win the case. When faced with such a problem, any sane business man will take the less expensive option even if it's not the one that's good for the world.

    So, this license fee can be seen as an insurance policy against such patent claims that could bite the handset maker for a mistake the software writers made.

    • Re: (Score:3, Insightful)

      by mcmonkey (96054)

      One of the reasons why big business loves Windows and isn't that interested in Linux other than maybe Red Hat is because if things go horribly wrong, there's somebody with deep pockets to sue.

      Yes, because Microsoft came to dominate its industry by paying out on lawsuits. Those deep pockets are more likely to go for paying for lawyers to fight your lawsuit.

      As for protection from IP claims, this is the textbook definition of FUD. And it's a lie. Weren't customers of MS subject to lawsuits a few years ago ba

      • by arivanov (12034) on Friday October 01, 2010 @03:08PM (#33763576) Homepage

        Exactly.

        There has not been a single case when someone has successfully sued Microsoft for "something going wrong". I have not heard of a single case of it settling either.

        That is not the reason businesses like Microsoft. Microsoft is extremely good at catering to Joe Average Middle Manager needs. It may be a resource hog, it may be unstable, it may be utterly non-scalable, but it is what the middle management needs and wants. From there on, it does not matter what the top brass want or what the grunts want. There is no way to turn a company around to want something different from powerpoint, microsoft word and most importantly excel and project.

    • Re: (Score:2, Insightful)

      How does that protect you from patent trolls who force you to stop sales of your handset until the patent dispute is resolved with MS? Never underestimate the deviousness of patent trolls to cause maximum pain and suffering for their own profit.
      • Re: (Score:3, Funny)

        by LostCluster (625375) *
        Microsoft will provide their army of lawyers to argue against that injunction. Sure, it's not a foolproof solution, but it's the best one money can buy.
        • Re: (Score:3, Insightful)

          by mlts (1038732) *

          And RedHat doesn't have legal representation? I'm sure if a patent troll started hammering RedHat, other people in the supply chain whose futures are tied to the OS will join the fray, such as IBM.

          Personally, I'd worry about other factors such as if the OS and platform are up to the task at hand. This generally is far more important than worrying about patent trolls as the primary reason to choose an application stack.

          • Re: (Score:3, Interesting)

            by LostCluster (625375) *

            You misread. Red Hat is a business built around giving the Microsoft-like treatment to Linux. They'll train, support, and give you somebody to complain to when it's not working.

    • by SmallFurryCreature (593017) on Friday October 01, 2010 @01:48PM (#33762272) Journal

      This argument keeps coming up. That somehow, when you pay MS for their "software" you get Bill Gates at your beg and call, ready to deliver an emergency patch at your request.

      For normal business, this is far from the case. MS doesn't even know you exist, HP or Dell is your point of contact. You would have to buy MS software worth millions of dollars to get them to notice you and even then, support is far from snappy. With open source I have had routine contact with the lead developers over the years.

      And as for sane business men just buying off SCO and the like. Eh, no. That is exactly what did NOT happen. A hint to this might have been that SCO went bankrupt. There were a handful of payoffs and they could all be traced back to MS backing. And even that wasn't enough.

      A SANE business man knows that if you start paying of left and right you will soon be out of business.

      In fact a sane business man will look at this license and stay the FUCK away from it unless he was paying payed to get close to it. Why? Because apparantly, MS is willing to SUE people who it thinks don't pay it enough. So if next year you decide to dumb MS as your tech partner, will they then turn around and sue?

      Go ahead, come into my house. I promise you that if you come into my house, I won't kill you... why are you running away?

    • You missed the part where every major WinMo manufacturer of significance already ships more Linux based (Android) phones. If they were that desperate for indemnification, they would have avoided Android completely rather than releasing on both platforms.

    • Re: (Score:2, Interesting)

      by poetmatt (793785)

      bwahahahaha what a troll. What a deliberate, obvious troll. You should have used republican talking points.

      SCO/Darl Mcbride never won any case. Nobody has settled with SCO either, in fact SCO is in bankruptcy. Why again? Because of all that stuff they "owned"? Is that where the "people will settle" BS comes from? Because patent trolls rarely win, as recent studies have shown. [techdirt.com] So there is a reason to not settle: you can save more money by going through the courts, because the more you cost the competitor (mi

    • I haven't seen any patent lawsuits in recent memory for smartphone software.

      I have seen lots of patent lawsuits in recent memory for smartphone hardware. And somehow, I don't see Microsoft coming to your rescue when Apple sues you for abusing a touch screen patent, or NTP sues you because you use the wrong chip in you phone.

      • I haven't seen any patent lawsuits in recent memory for smartphone software.

        Less than a year is beyond recent memory? Apple v. HTC [slashdot.org]

        • I guess I thought that whole lawsuit was mostly about the hardware of capacitive touchscreens- I didn't realize there were like 13 patents listed in the lawsuit.

          And while many were hardware patents, you are right in that some were entirely software.

    • Re: (Score:3, Insightful)

      by migla (1099771)

      So, this license fee can be seen as an insurance policy against such patent claims that could bite the handset maker for a mistake the software writers made.

      In other words: "Nice handset you got there, it would be a shame if it burnt down..."

    • the main reason big business loves MS is lack of choice. Business loves having no choice, ie no risk. My brother works in IT for a very large firm, and was recently on a kinda tricky remoting/virtualization project. His main wish ? that "MS had decimated the market, so that I wouldn't have to choose something".

      big business would not sue MS, their lawyers know it''s a lost cause. they may sue their consultants (including MS if MS is doing the consulting), but not the hardware/software suppliers.

      • Re: (Score:3, Informative)

        by poetmatt (793785)

        eh, I hate to agree with this, but it's pretty true.

        MS is known for buying out an issue if necessary, and that includes lawsuits. I mean how many people were originally parties to the samba case, and how many were bought out? All but 1. It's not the first time, either.

    • "One of the reasons why big business loves Windows and isn't that interested in Linux other than maybe Red Hat is because if things go horribly wrong, there's somebody with deep pockets to sue. "

      That cannot possibly be one of the reasons, since your claim is ridiculous and untrue. The bigger businesses that tolerate Microsoft do so because they recognize that they have long since fallen victim to lock-in, and even they are trying their best to make the transition. Smaller businesses like Microsoft, but on

    • by DrXym (126579)
      One of the reasons why big business loves Windows and isn't that interested in Linux other than maybe Red Hat is because if things go horribly wrong, there's somebody with deep pockets to sue. What Microsoft is offering here is a classic part of their business plan... if somebody comes up with a submarine patent they'll take the legal pain so their customers don't have to.

      Are you saying Google, HP, Nokia or Apple who all have their own phone operating systems don't have deep pockets? In two cases the Linu

    • Re: (Score:3, Insightful)

      by schon (31600)

      One of the reasons why big business loves Windows and isn't that interested in Linux other than maybe Red Hat is because if things go horribly wrong, there's somebody with deep pockets to sue.

      Yup, that's why the London Stock Exchange sued MS after the entire fscking exchange went down in flames, right?

      Oh, wait - no they didn't. They licked their wounds and switched to Linux.

      Methinks your premise is flawed.

    • by _Sprocket_ (42527)

      Remember the lesson of SCO and Darl McBride.... even though the claims had no legal merit, they still were messy enough that it was cheaper to pay the settlement price than fight them and win the case. When faced with such a problem, any sane business man will take the less expensive option even if it's not the one that's good for the world.

      Yet oddly enough, the very few businesses who did actually see legal action from SCO did fight and win. And those few cases were less about Linux (despite all the noise in the press) and more about actions of specific companies. SCO vs. IBM was about breach of contract and didn't even touch on Linux until much later in the course of the case. SCO vs. Autozone was about alleged re-use of specific SCO libraries when migrating applications to Linux. SCO vs DaimlerChrysler was about Chrysler's a stipulation

  • This is nothing new (Score:5, Interesting)

    by BadAnalogyGuy (945258) <BadAnalogyGuy@gmail.com> on Friday October 01, 2010 @01:36PM (#33762014)

    Microsoft has never not charged a license fee. It's pretty steep too.

    But they keep pushing this indemnification clause as if it provides some kind of true advantage. It does not. First, it only covers the technology in the OS which MS would necessarily have to protect itself from anyway. Second, if a handset maker were to get sued and lose, they would in turn sue MS for damages. And finally, no one has successfully sued a handset maker for infringed patents in operating systems like Linux.

    What this tells me is that they haven't changed their selling strategy one bit, and they haven't got the slightest idea how to change it. Whoever is in charge of their mobile division needs to be replaced. They have a technology that is late to the game and a selling strategy that is worthless to anyone with any experience with other operating systems.

    • Re: (Score:3, Interesting)

      by UnknowingFool (672806)

      MS is trying to go after their true competitor in the space which is Android. While everyone talks about Apple being their biggest threat, it's really Android because Microsoft's partners and former partners might choose a free and configurable OS over their licensed and increasingly restrictive one. Also considering how MS has screwed over their partners in recent years, some of them might be wary to stay in a partnership with MS. If more and more partners abandon the Windows Mobile framework, there isn

      • by Sir_Sri (199544)

        For of it's faults the MS does a decent job of providing the tools to make a platform anyone can write for, linux does too, and in the mobile space that's going to become more an more an issue. Too much porn on phones and someone is going to step in to regulate business (and apple has done a good job trying to keep under the radar here) but eventually the restrictive nature of apples store should be trumped by a more open Windows/Android set of stores. Those two can compete on who makes the better tools,

      • by Trelane (16124)

        there isn't a lot that MS can do except develop their own hardware.

        And extort patent protection money from Android vendors, e.g. HTC.http://www.engadget.com/2010/04/28/microsoft-says-android-infringes-on-its-patents-licenses-htc/

    • Microsoft has never not charged a license fee.

      Almost true, but not completely: when Bill G. asked from Jack Tramiel (of Commodore), for a per-unit royalty fee, he was told to get bent (not necessarily with those words). A few days later Bill G accepted the lump sum and that was that.

    • by canajin56 (660655)

      And finally, no one has successfully sued a handset maker for infringed patents in operating systems like Linux.

      If you read TFA, Microsoft has been threatening Android makers, saying Android, being Linux, violates Microsoft patents, and telling them they need to buy licenses to MS patents or their customers will be sued. HTC has already folded for an undisclosed retroactive royalty on all of their Android phones. Verizon forces users to use Bing by forcefully blocking Google and Yahoo on their Samsung A

  • by PlanetX 00 (623339) on Friday October 01, 2010 @01:36PM (#33762016)
    A quick search revealed that at least one embedded Linux vendor offers this too without per-phone royalties:

    "Meanwhile, MontaVista added that it protects its customers from technical and legal risks through warranties on all editions of MontaVista Linux and indemnification against claims involving the code it creates and delivers."

    Just more FUD IMHO
    • by LostCluster (625375) * on Friday October 01, 2010 @01:40PM (#33762118)
      In Microsoft's bank accounts we trust.... and just who is MontaVista?
      • I'm sure there were people who said the same thing about investing with big banks rather than smaller credit unions a couple years ago...
      • If you believe Microsoft doesn't have a backdoor in that protection clause, you haven't seen them in court.

        Microsoft isn't going to stand up for you or me or anyone else. They'll drop you like they dropped the PlaysForSure suckers.

    • by Grond (15515)

      "Meanwhile, MontaVista added that it protects its customers from technical and legal risks through warranties on all editions of MontaVista Linux and indemnification against claims involving the code it creates and delivers."

      You're comparing apples and oranges. As best I can tell, MontaVista's indemnification only extends as far as GPL disputes in which MontaVista is at fault, not software patent claims or even GPL disputes in which an upstream contributor screwed up. From this page [mvista.com]:

      Legal risk - reduces le

  • by Dan667 (564390) on Friday October 01, 2010 @01:36PM (#33762026)
    and charging a fee is grasping at a branch on the way down.
    • Re: (Score:3, Insightful)

      by LostCluster (625375) *

      Yep. That damn Windows desktop license fee will surely lead to Linux on the desktop right about... uh, okay, give it time.. uh, keep waiting. It'll finally be this year..... uhm.

      • by Dan667 (564390)
        maybe you missed the part that this is about microsoft moble os.
    • by alen (225700)

      almost every iPhone and Android device sold you pay the Microsoft tax. it's called activesync. just like the old DOS days

    • You are aware that Android also "kinda" has a licensing fee? The Google app stack (including the Marketplace) is only accessible if you pay Google and extend a branch for them as they keep fall- wait, what?

  • Great. Now I don't even have to consider Windows Phone 7 based on its merits against android devices.

    AT&T is crap, and they already have IPhone locked in.

    Who in their right mind at Microsoft thinks this is a good idea?

    • I'm confused by this as well... So the release is initially with GSM radios and one of their manufacturer's is HTC. Why not include T-Mobile in the release?

      Message to Microsoft: I feel left out. I was looking forward to the release, to update my ageing WM 6.1 phone and maybe try porting some of my code. If you think I'll change network, to AT&T, just to buy that Windows Phone 7 device, you've lost your mind.

  • ...demands $1000 per phone and a Federal judge says she will start issuing permanent injunctions in 30 days Microsoft will pay?

    • by AusIV (950840)
      That was my thought. Microsoft can't very well indemnify against injunctive relief. If Windows mobile violates a patent, and the patent owner is granted an injunction, the manufacturers would still find themselves unable to ship phones with the OS.
    • by Nikker (749551)
      If a company the size of MS is going to pull a move like this they will already have their bases covered. A major part of their business is not only writing software but filing and buying patents, this is the reason MS hasn't had lawsuits against them for their OS's. If a patent troll had anything on them they would be all over them as we speak cause I can guarantee they would be able to get more out of them then RIM and all the other combined could pony up. Companies that size look at patents the same way
  • by UnknowingFool (672806) on Friday October 01, 2010 @01:41PM (#33762160)

    First MS hints that Linux [slashdot.org] infringes on patents. [theinquirer.net]. Then it says it loves Open Source [networkworld.com]. Now it levels a thinly veiled patent threat against open source Android. Translation: MS loves open source as long as it doesn't compete with them. All we are missing is the horse's head.

    • Patent threats (no matter how subtle) are pretty much all they have left. They've already indicated that their product won't be able to compete on merit. Sure, they've got gimmicks and branding (Zune and XBox), but there's nothing backing those up anytime soon (Zune is just a fancy name for media player, and I sincerely doubt that XBox Live has nearly as many playable-on-the-phone games as Android and iPhone has at this time).

      Long story short, Microsoft is in the hole insofar as mobile goes, it's their own

    • Re: (Score:3, Insightful)

      by jpmorgan (517966)

      You're misplacing your anger. Microsoft's not the one that sued HTC for patent infringement over Android.

      • Apple has sued 1 maker. That's one. Looking at the patents, I don't think they have much of a case but that's for a court to decide. MS on the other hand is thinly threatening all makers especially those that use both Windows and Android. "If you don't stay with us, *ahem*, there might be patent issues later." Which is worse in your opinion, suing someone for what you've think they've done or threatening to sue someone because they won't use your products anymore?
  • We bet the other mobile OSes violate some of our patents. Our OS is the only way to be sure you're not in violation.

    • by KarmaMB84 (743001)
      or...
      Apple is suing HTC, HTC is suing Apple
      Nokia is suing Apple, Apple is suing Nokia
      Kodak has sued Apple and RIM
      RIM has sued Motorola, Motorola has sued RIM
      NTP has sued everyone
      Oracle is suing Google


      Maybe they're just offering indemnification because the mobile space is overflowing with litigation.
  • Android is free, and companies like RIM probably will license for less... so what benefit does Microsoft have in terms of actual technology? Probably little to none.

    So they decide they're going to go patent-troll [enterprise...etoday.com] on manufacturers like HTC who produce both WinMo and Android phones, claiming the Android infringes on their IP... notice they didn't do this with any other manufacturer like Motorola, just HTC (who created the Nexus One). Funny that.

    I see this working out really well for them (not).

  • the android OS code is free to use, but to put google apps on a phone you have to pay $15 to google. or something close to that. in return google shares advertising revenue from the handsets you license. apparently they can keep track or revenue for each android device.

  • I bet the iOS team charges the iPhone team interdepartmentally.
  • Oh noes! I wanted so bad to enjoy their ultra fast network here in NYC...
  • Protection (Score:2, Insightful)

    by jIyajbe (662197)
    "Give us money, and we'll make sure you don't get sued."

    Isn't there a legal phrase for that?

  • by Rogerborg (306625) on Friday October 01, 2010 @02:26PM (#33762968) Homepage

    This is a signal that if WinCE 7 (or whatever) doesn't sell well, they're going to go after Android and iPhone handsets with patent claims. Switch to WinCE 7, or something bad might happen to your platform.

  • Extortion (Score:3, Insightful)

    by Hairy1 (180056) on Friday October 01, 2010 @02:44PM (#33763224) Homepage

    Thats nice software you have there. It would be a pity if something were to 'appen to it.

    After examining the recent patent litigation it seems that Microsoft is the target of phone patents already, and another patent troll is not attacking Microsoft because they are owned by the co-founder of the company.Basically what they are saying is that you should use Windows ONLY because of patent protection. Innovation be damned, what matters is how many patents you and your allies have to throttle the competition. Gates was right; if software patents had been in common use when Microsoft started he wouldn't have stood a chance.

  • for the crashing piece of shit Windows Mobile 6.1 that I can't update. The fee: I won't be buying a Windows 7 Mobile phone.
  • Microsoft just launched an attack against Motorola over Android:

    http://www.engadget.com/2010/10/01/microsoft-files-itc-complaint-against-motorola-over-alleged-andr/ [engadget.com]

    So they are certain someone will sue you if you use Android...

  • This is exact same pr bullshit they have pushed already. Only names are changed to protect the "innocent". What was once linux, is now MeeGo.

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