July 7, 2011
Nortel’s Patent Legacy.
In early July, a rather surprising and significant event took place: the big boys of the IT industry were for several days bidding and out-bidding each other to acquire six thousand patents of Nortel. And these patents really are the tastiest of morsels: a whole range of wireless, communications, Internet and semiconductor technologies.
After days of tense auction-room drama, all these tidbits went to a consortium made up of the strangest of bedfellows: Apple, Ericsson, RIM, Sony, Microsoft and EMC. In all a whopping US$ 4.5 billion was paid for the patents. But I won’t get bogged down in the details here. You can read the epic thriller of how the auction went here.
But now and here – the most interesting bit.
Why did Apple and the other companies, including Apple’s sworn enemies Microsoft and RIM, spend such huge amounts of wonga – 750 000 greenbacks for each patent? And how come the main opponent in the bidding at the auction was Google?
Many observers (including me) think that this purchase will be used to limit the growth of mobile devices (phones, tablets, and whatever else may appear in the future) based on the Android platform. The main non-Android players in the mobile market have started to understand that, all other things remaining equal, their closed operating systems have no chance of holding ground against dozens of Android-based mobile brands.
Maybe Google won’t suffer all that much (or maybe it will, but indirectly) since the main patent lawsuits that will arise due to the acquisition of the Nortel patents will be directed at producers of Android-based hardware. However, also hit, I’m fairly sure, could be software technology used in the Android operating system: patents covering this technology also figure in the Nortel batch.
And now, very briefly, let’s turn to the patent law in the US (and also Canada and Japan, which copied the US).
In the rest of the world software is protected by copyright, but in the US, Canada and Japan – by patents. That is, it is possible to patent a software IDEA, what’s more – in the widest context. For example, methods of activating products with an activation code are patented (Microsoft tripped up over this one); and “one-click” purchasing is a patented idea. Also patented is the idea of “testing for viruses on an Internet gateway”.
Like a side effect of this patent story, in the States there are companies that do nothing but think up and patent different ideas, wait, then suck all the money out of those who also come to those same ideas.
Such companies are pejoratively called patent trolls. An initially good idea to protect the rights of inventors has been distorted to such a degree of controversy that it now works against those same inventors.
In the States patents seriously hinder software companies and manufacturers of computer and mobile hardware. They are either leant heavily on by those who are bigger (and who have more software patents), or have to make payments (and we’re not talking paltry sums) to the patent troll SOBs.
But at the same time for this reason companies in markets other than the US are given carte blanche to quickly come up with the tastiest and most promising ideas and tendencies. And yes I do mean here China. Like in the song, its future has gotten so bright it’s gotta wear shades.
It’s clear that we are witnessing the start of a serious war against Android.
I recommend everyone to get the popcorn in and wait for the heart-rending patent dramas between Apple and Google, and also the possible local outbursts on other fronts. And the main target will not simply be manufacturers of Android hardware, but the future of Android itself.
And remember – Apple is the one that holds all the aces at the moment. And Google is far from in a favorable position (it currently has 45 (!) patent lawsuits hanging over it).
My bet’s still on Android.