Posted: November 13th, 2011
By Pierce Haar *
Despite all the rage for the latest and greatest from that little tech company in Cupertino, California, Google’s Android operating system continues to hold a 40% market share in the U.S. and somebody besides Google is looking to cash in on that business. Microsoft, claiming that the Android operating system infringes upon its patents, stands to gain hundreds of millions, if not billions, of dollars from licensing deals and settlements with Android device manufacturers such as HTC and Samsung if successful in its litigation. Microsoft could receive as much as $15 per Android phone produced by Samsung. Between April and September of 2011, the Galaxy S-II, a Samsung Android phone, moved 10 million units. That is potentially $150 million for just one phone line. In addition to the onslaught that Google is facing from Microsoft, the company is also facing complaints from Oracle that Android devices infringe upon its patents covering the Java software system. How did Google, and its software progeny, get into this sticky intellectual property situation?
Patent infringement and licensing issues have arisen over the years as technology companies have developed new products and technologies that build upon prior technological breakthroughs. For instance, Microsoft has had licensing agreements with IBM, HP, Oracle, and others over the years for its data management products created to serve the business sector. The base “layer,” according to Microsoft’s general counsel Brad Smith in the cell phone and smartphone sector, is the basic radio technology for cellular communication. Qualcomm, the leading patent owner with respect to that particular type of technology, makes about $20 for every smartphone (and cell phone) produced. The next layer in the development of cell phones and smartphones is media technology, which allows smartphones to play music and video. The holders of these sorts of patents earn anywhere from $3 to $5 per phone produced that uses the technology. The latest layer in the technological progression of smartphone devices is software, operating software to be more specific. Microsoft and Apple have been developing such systems for years and are claiming that Google’s Android operating system uses their hard-earned work and development.
The conflict presents an interesting dilemma that strikes at the heart and nature of intellectual property rights. Intellectual property law exhibits our belief in the ability and right of someone to be secure in their innovation. When an inventor creates something patent-worthy, he should be rewarded when others use his creation. At the same time, our intellectual property law intends to promote future innovation without restricting those potential innovators in what they can and cannot do, what they can and cannot use. Microsoft is asserting that they have invested billions of dollars and countless time into these innovations and should be compensated for their use. On the other side, Google is voicing its concerns over the effect that such broad patent protection will have on future technological development. Google has recently acquired the mobile division of Motorola, a producer of Android phones, which will help present a more unified target for Microsoft in its intellectual property litigation campaign. As the legal conflict between Microsoft and Google reaches full steam, the courts must decide which side of the intellectual property debate they will support: will it be past, present, or future innovators?
* Pierce Haar is a second-year law student at Wake Forest University School of Law and a member of the Pro Bono Board, serving as the Special Trips Coordinator. He holds a Bachelor of Arts in Peace, War, and Defense from the University of North Carolina at Chapel Hill. Upon graduation in May 2013, Mr. Haar intends to practice either criminal law or civil litigation.