Some people sure do love a good headline.
Some people can’t be bothered to read, either.
A disclaimer. I’m no expert on German law, copyright infringement or licensing issues. I can, however, read pretty well and am adept at Googling. It’s these fantastic skills that will allow me to explain just why the headlines are nothing but attention grabbing nonsense and why this whole story is something of a non-event.
Firstly, an explanation of what’s happened. Microsoft, through their XBox and Windows 7 platforms, have been using a Motorola patented codec. This codec is used in thousands of devices and thousands of websites. It’s what’s known as an ‘industry standard’. This means that a group of smart, well respected technology buffs decided, for the sake of some sort of uniformity within the technology world, that this codec should be widely adopted. This means that tons of devices HAVE to use this codec to be labelled as ‘compliant’ and to enable some sort of guaranteed compatibility with other devices.
Now, companies that are lucky, smart and talented enough to create a ‘standard’ worthy piece of technology are laughing. You get to license out your product to almost EVERYONE. You’ve got them eating out of your hand. They (your buyers) HAVE to have your product. Without your product, they can’t be ‘compliant’. Their products won’t work with the majority of devices. You’ve got them by the balls! Go for the jugular! MAKE SOME COLD HARD CHEDDAR!
Wait. You have to be Fair, Reasonable And Non-Discriminatory. Damn.
The ruling of FRAND helps to ensure that the technology market remains competitive and continues to move forward. It essentially stops someone creating the ‘hot new thing’ and charging everyone ridiculous amounts of money to use it. It’s true that FRAND has its problems, in fact, the whole area of IP protection needs to take a good, long, hard look at itself, but that’s not the point. The fact is, whenever it’s claimed that someone isn’t being FRAND, a hearing must take place and further legal proceedings occur.
In this case, Microsoft have decided to claim that Motorola’s demands of $4 billion isn’t FRAND and it looks like they have a point. Motorola are owed money as Microsoft ARE using their patented codec, just not $4 billion. That’s a ridiculous sum of money. This appeal process, along with the fact that Microsoft’s distribution centers aren’t in Germany, means that the ruling can’t be enforced as the case isn’t over. If Microsoft had their distribution centers in Germany, it could have been a different story, but they don’t, so it isn’t.
This is hardly a new occurrence. Technology companies are claiming patent infringements left, right and center. There are currently a whole bunch of law suits going on between the giants of tech, most of which will most likely be settled out of court. As it stands, this might not be the last we hear of Motorola claiming for ‘damages’ either. They own all sorts of patents regarding to a wide range of tech including 4G, Mpeg-4, 802.11, and Near Field Communications. Not that Google, the owners of Motorola, will mind. Cheddar is cheddar and most people won’t realise that this rather tasteless attempt at grabbing money is done under the guidance and, most likely, with the blessing of Google. You know, the ‘good guys‘ of all things tech.
The bottom line is that;
- This happens all the time in the tech world.
- It won’t truly affect Microsoft or their selling of the XBox.
- To get rich, buy a company that loves to sue people.