For many tech reporters, blogger and analyst Florian Mueller has become an important resource for analyzing and understanding the various intellectual property machinations of the smartphone industry.
Mueller’s blog, FOSS Patents, quickly and smartly dissects the seemingly endless stream of patent suits and countersuits being filed in courts around the world involving companies such as Apple, Google and RIM. Although Mueller himself is not a patent attorney, his decades of experience as a software intellectual property activist and in coordinating software licenses has given him a strong background in software patents that he now utilizes as both a blogger and as an intellectual property consultant in his native Germany.
In this question-and-answer session, we pick Mueller’s brain to get his take on how Google can protect itself and its Android mobile operating system against further litigation and on whether software patent suits are damaging innovation in the smartphone industry as a whole.
Is there anything that Google can do now to protect Android vendors from paying licensing fees for the right to sell Android devices, or is it too late in the game?
Mueller: Whatever Google does, Android device makers will end up paying royalties to a variety of patent holders, large and small. Even if Google closes the acquisition of Motorola Mobility’s patents, it still won’t be able to dictate the terms of cross-license agreements with other industry players, and there are many companies that won’t be affected by that transaction in the slightest. Some already have cross-license agreements in place with Motorola Mobility. Others don’t sell technologies for which they need a license to any particular Motorola Mobility patents except perhaps certain standards-related patents, but those have to be licensed on fair, reasonable and non-discriminatory terms, which means they can’t be used as strategic weapons.
You mentioned in an earlier blog post that, unlike Microsoft, Apple is less likely to settle for licensing cash as a settlement for Android-related patent infringements. What is Apple’s endgame here and why does it differ from Microsoft?
Mueller: Microsoft has been building a patent licensing business for a number of years and claims to have more than 700 licensees. By contrast, Apple’s position is similar to that of pharmaceutical companies: Those also retain their patents for themselves and don’t cross-license. Even though license deals are the usual way to resolve patent issues in the IT industry, a patent is a time-limited, scope-limited monopoly and patent holders don’t have to grant licenses unless they made a commitment to offer licenses, such as in connection with a standard-setting process.
Apple optimizes for product differentiation, not patent licensing revenues. They will grant licenses to their crown jewels—patents on those inventions that make the iPhone and iPad unique—only if they absolutely need a license to some of a rival’s patents. Otherwise I believe any settlements involving them will have a rather complex structure, with Apple retaining some patents exclusively, granting licenses to others on very high prices, and at any rate insisting on distinctive product designs, which is a big issue between Apple and Samsung.
How much do you think these suits will inhibit Android’s rise as a top smartphone operating system? Is there any way Google can rework parts of the OS to ensure it doesn’t infringe upon Apple or MS patents?
Mueller: Google has already done that in some cases, or at least didn’t dare to implement certain features due to patents held by Apple. While most patents can be worked around somehow, there can be a toll in terms of the user experience or the functionality of certain products. There’s a risk of Android products becoming less desirable just because of Google’s need to keep out of restricted areas.
Stepping back and looking at the big picture, do you think all of these suits and countersuits are a net positive or negative for the industry? And if they’re a net negative, what are three key reforms you’d propose to improve the situation?
Mueller: The costs of those lawsuits are staggering but this is about a trillion-dollar market, relative to which those costs are manageable for the major players. It’s also important to consider that those lawsuits have different characteristics. For example, Oracle v. Google is a dispute that could have been avoided if Google had respected Sun’s Java-related intellectual property rights and paid approximately $100 million. The judge presiding over that case has strong suspicions of willful infringement. In a case like that, it’s understandable why a patent holder goes to court, even if I personally don’t think that software patents are a positive thing on the bottom line.
In terms of reforms, I believe the most important thing is to prevent the grant of bad patents, but that’s very difficult. Proposals to that effect don’t go beyond proposing more money for the patent office. But then it should at least be easier to invalidate bad patents in litigation. That’s the most urgent thing to improve in the U.S. And in Europe, some countries such as Germany grant injunctions too easily without looking into the hardship that an injunction means and the question of whether a damages award is a sufficient remedy.
And finally, how do you see the smartphone industry shaking out after these suits? Will there be room for an upstart open-source OS like Android in the future or do you think companies without large patent portfolios will be deterred from releasing open-source software in the future?
Mueller: The Mozilla Foundation is brave and not deterred at all: they plan to release their Boot to Gecko open-source mobile operating system. It will probably be truly open, much more so than Android.
For upstarts I think the greatest concern is that patent assertion entities like Lodsys attack them early on, sometimes even one-person companies. It would be better for small companies to get a longer period of time during which they can fly under the radar of patent holders.