February 22, 2012, 11:08 AM — In what could be the greatest example of the pot calling the kettle black, Microsoft has launched a new antitrust complaint against Motorola Mobility and Google with the European Commission (EC), claiming abuse of fair, reasonable, and non-discriminatory (FRAND) licensing for patents relating to video playback.
According to Microsoft VP & Deputy General Counsel Dave Heiner, the FRAND complaint was filed this morning with the EC because of what Microsoft feels are egregious maneuverings on the part of Motorola Mobility (MMI) and its soon-to-be owner, Google.
"We have taken this step because Motorola is attempting to block sales of Windows PCs, our Xbox game console and other products. Their offense? These products enable people to view videos on the Web and to connect wirelessly to the Internet using industry standards," Heiner wrote in a blog titled (I kid you not): "Google: Please Don't Kill Video on the Web."
Specifically, once you get past all of the gnashing of teeth and victimization of which Heiner's blog entry reeks, Microsoft is accusing Motorola of discriminatory practices in how much it charges Microsoft for patent royalties to run H.264 formatted video, for which MMI owns the patent. Apparently, it's quite a bit.
"Unfortunately, Motorola has refused to make its patents available at anything remotely close to a reasonable price. For a $1,000 laptop, Motorola is demanding that Microsoft pay a royalty of $22.50 for its 50 patents on the video standard, called H.264. As it turns out, there are at least 2,300 other patents needed to implement this standard. They are available from a group of 29 companies that came together to offer their H.264 patents to the industry on FRAND terms. Microsoft's patent royalty to this group on that $1,000 laptop?
The irony in this complaint about MMI, which was preceded by a similar complaint to the EC on February by Apple is so ridiculously rich, it was like getting an early Christmas present for open source and Android advocates. But, in fairness, there are significant differences between these FRAND complaints and the patent lawsuits Microsoft and Apple have leveled at Motorola, Google, and other Android vendors. In that latter set of litigation, Microsoft and Apple are alleging that Google and its partners stole what belonged to Microsoft and Apple.
FRAND complaints, according to noted standards attorney Andy Updegrove, revolve around patents that are held for technologies that are accepted as industry standards--such as the H.264 format. Essentially, FRAND loosely requires that all participants to a particular standard be given "fair" and "reasonable" access to licensing that technology. But, as Updegrove pointed out on his own blog this week, there's no set rules in place for "fair" and "reasonable."
"It's also obvious that these are comparative words, so by nature, they imply that there is some sort of benchmark in relation to which fairness and reasonableness can be measured. But what would that benchmark be?
"Interestingly enough, there really isn't one. In fact, the parties to a lot of recent litigation, between individual companies (like Broadcom and Qualcomm) and between regulators and companies (like the European Commission and the U.S. Federal Trade Commission (FTC), on the one hand, and Rambus, on the other hand) have grappled at length with this issue."
Even "non-discriminatory" has problems being resolved, Updegrove writes.
"At first blush, that would seem to be an easier phrase to apply. In essence, what it means is that I won't license my Necessary Claim to one vendor for $1 a unit built to a standard, and for $2 to another vendor for the same purpose.
"But not so fast. What if one vendor wants to buy build 100 units a year that conform to the standard, and another wants to build a million? Shouldn't the latter be entitled to a quantity discount?"
For the short-term, such broad interpretations of FRAND litigation may assist Google and Motorola help fend off these immediate accusations.
In the broader context of the entire scope of patent litigation and accusations being flung around the mobile technology sector these days, I find Microsoft's self-portrayal as a victim here disingenuous at best and deeply offensive at worst. And, frankly, stupid: the language used by Heiner is clearly calculated at portraying Google as a maniacal despot actually trying to kill video on the Web.
Yes, because clearly the same company that owns YouTube would benefit from preventing Microsoft, which according to this analytics report holds 92.05 percent of the desktop market as of January 2012, from running video on Windows machines.
To his credit, Heiner can't seem to stay in the character of victim for long. He points out that Google and Motorola may only trying to protect itself from patent actions from "Microsoft and others." But only to get Microsoft's own digs in:
"Rather, Microsoft is focused on infringement of patents that it has not contributed to any industry standard. And Microsoft is making its patents--standard essential and otherwise--available to all Android manufacturers on fair and reasonable terms. In fact, more than 70 percent of Android devices are now licensed to use Microsoft’s patent portfolio."
Yes, can't forget that bragging point, can we?
Google and Motorola may ultimately have to answer for abuses of FRAND policies in the EU… we will have to see what the EC decides. But Microsoft--convicted-monopolist Microsoft--in the role of innocent victim is too much to stomach.
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