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Microsoft Corp.’s message to Motorola Mobility Holdings Inc.—recently bought by Google Inc.—Wednesday morning in a blog post by GC Brad Smith and top IP counsel Horacio Gutierrez: All we are saying is, give patent peace a chance. Microsoft announced a cross-licensing agreement with Samsung Electronics Co. that secures royalties for every mobile phone and tablet Samsung sells that runs the Android operating system. Although the set dollar amount Samsung will pay per unit was not disclosed, Microsoft was rumored to have been asking for $15. A Microsoft spokesperson denied a request to interview Smith or Gutierrez. In their blog post, Smith and Gutierrez wrote, “These agreements prove that licensing works. They show what can be achieved when companies sit down and address intellectual property issues in a responsible manner.” Microsoft has claimed since 2007 that the Linux-based Android mobile operating system violates 235 of the patents in its hefty portfolio. The company has already entered into licensing agreements with every major producer of Android devices except Motorola Mobility; the two are currently locked in IP litigation. David Drummond, Google senior vice president and chief legal officer, recently accused Microsoft, Apple, Oracle, and other companies that recently bought old patents of “a hostile, organized campaign against Android.” As part of the Microsoft deal with Samsung, the companies agreed to cooperate in the development and marketing of Microsoft’s own Windows Phone. Last summer, experts estimated that Microsoft was making up to five times more on Android fees than it raked in on sales of its own smartphone. James Bessen, a lecturer at Boston University School of Law, says that although Microsoft has had a hard time keeping up with the pace of innovation in the contemporary tech market, it’s made up for the lag by aggressively accumulating large numbers of patents since the 1990s. “Patents have become extreme weapons that don’t have a whole lot to do with innovation,” says Bessen, who co-authored Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk. He says that in the area of software, patents can be written—and interpreted—very broadly. “It’s pretty hard to avoid them, even if you are innovating from scratch,” says Bessen. Although Microsoft has for years accused Linux of violating hundreds of patents, Bessen says, the company has have never revealed exactly what those patents were. “It’s been widely seen as spreading fear, uncertainty and doubt.” Microsoft general counsel Smith tweeted @BradSmi about the Samsung deal: While we haven’t yet reached the beginning of the end of mobile patent issues, perhaps we have now reached the end of the beginning. and Today’s agreement demonstrates we now have a clear path forward for resolving the industry’s mobile patent issues. “I’m sure what Brad thinks is the clear path forward is for everybody to license from Microsoft,” Bessen says with a laugh. “Unfortunately, I think we have a situation which is continuing to get worse. The patent office and the courts are allowing vague patents that open up opportunities for abuse by patent trolls. As long as we continue to see a flood of these bad patents and a flood of litigation, we’re not at the end of the beginning,” he says. All of this can end up making Android more expensive to the consumer, which will reduce its market. “Yes, they’re avoiding litigation, but this is a situation that shouldn’t exist,” says Bessen. “And in the end it taxes innovation and it taxes consumers.” What does this mean for in-house IP lawyers? “In industries where competitors are playing this game of large patent portfolios, you’ve got to do the same,” says Bessen, who cautions that waiting to expand your portfolio will only cost you more down the road. See also: “Google’s Chief Legal Officer Lashes Out Online,” CorpCounsel, August 2011.

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