Except in its Oracle battle, Google has stayed on the sidelines of the escalating litigation in the mobile platforms world. Although clearly the real target for Apple’s and Microsoft’s attacks, the search giant, until recently, went no further than to transfer some patents to HTC and build up its own defences, stockpiling IPR against a future barrage. Now it is being dragged to center stage ‘ by its acquisition of Motorola Mobility, which has brought it patents wealth, but also a series of inherited lawsuits; and by Apple’s latest victory, a temporary injunction against the Samsung Galaxy Nexus, which is co-branded by Google. Meanwhile, as the smartphone makers clock up the wins and losses in court, other hitherto subdued IPR powerhouses look set to make a move, notably Nokia and Qualcomm.
Apple may be heavily challenged by Samsung, but the primary goal of the litigation of the past year has been to weaken Android, an OS which former CEO Steve Jobs declared it his mission to kill. And it is easier for the iPhone maker, with its wealth of developments in software and user experience, to go after software or web patents, rather than the fundamental wireless technologies in which Samsung or Nokia excel. So the patent at issue in the Galaxy Nexus fight relates to Google’s unified search rather than the handset design itself and it was Google which is reportedly set to produce a workaround, in the form of a software patch, by next week. If so, the Nexus will have been off the shelves only for a few days ‘ it was no longer available for sale in the Google Play store on Wednesday, indicating Apple must have activated the ban by posting the required bond of $95.6m.
Judge Lucy Koh imposed the preliminary ban ‘ her second on a Samsung product within a week ‘ on Friday, at the request of Apple, and an immediate appeal by the Korean vendor failed. The ruling could potentially keep the Galaxy Nexus, as well as the Galaxy Tab 10.1, out of US stores until the patent battle is actually decided in a future trial. However, Google stuck its head above the parapet for once and Samsung said it was working with its partner to resolve the potential infringement.
As soon as Koh imposed the dual injunctions, Samsung was quick to point out that it would expect close cooperation from Google in responding. Should elements of Android and the Google user experience prove to be critical to legal setbacks, companies like Samsung could seek to reduce their reliance on the OS, or at least its most Google-specific elements, such as search. These have already been weakened by nonconformist Android implementations like Amazon’s, and by Apple’s gradual divorce from its former friend’s services, such as Maps, on iOS.
Koh said Apple had shown that four of its patents were likely to be both valid and infringed by the Samsung phone. She also ruled against the Galaxy Tab 10.1 on June 26, and earlier in the month, she had also expedited evidence sharing for Apple’s bid to block the newest member of the Galaxy family, the S III, which the Korean firm is launching with most major US carriers and expects to be its best ever smartphone in sales terms.
Many judges round the world have been hostile to the increasingly popular tactic of seeking preliminary injunctions before patent cases are actually decided, arguing that Apple is still able to compete strongly even it its rivals’ offerings are violating its IPR. But Koh took a different tack, saying in her ruling: ‘Although Samsung will necessarily be harmed by being forced to withdraw its product from the market before the merits can be determined after a full trial, the harm faced by Apple absent an injunction is greater. Apple’s interest in enforcing its patent rights is particularly strong because it has presented a strong case on the merits.’
Even the briefest hiatus in US sales will be a problem for Samsung, which is the most powerful challenger to the iPhone and iPad. The two judgements give Apple’s claims greater credibility than they have often attracted, and while the Tab 10.1 is near the end of its lifecycle ‘ and Samsung has already designed a workaround, the 10.1, for other markets ‘ the Galaxy Nexus remains a high profile handset. And any suspension of the S III would be a significant blow to US revenue potential over the summer. Apple has sought to bar as many as 25 Samsung smartphones in addition to the Nexus model.
For Google, patent issues are becoming bound up with regulatory probes of its business practices and possible monopolistic tendencies. For instance, the US Federal Trade Commission is investigating whether the search giant has been blocking access to standards-essential patents, which should be subject to Frand (fair reasonable and non-discriminatory) licensing terms. A source told Bloomberg that Google had been served with a civil investigative demand, similar to a subpoena, and the FTC is also said to be seeking information from Apple and Microsoft.
To add to its stresses, Google and Android may face a battle on another front, from Nokia. The Finnish firm has been a lurking giant in the patent wars, sitting on the laurels of its victory over Apple last year, and hinting at exploiting its vast portfolio more actively in future. But few actual actions have ensued, apart from an ongoing spat with IPCom and, in May, the first shots across Android’s bows, when Nokia filed suit against HTC (as well as RIM and Viewsonic). Now it may be poised to throw its first missile directly at Google, raising the specter of a Nokia-Microsoft axis which is hugely powerful in IPR terms, whatever the partners’ commercial struggles in the mobile market.
Hard on the heels of Google accusing Nokia and Microsoft, at the European Commission, of hiding behind patent trolls, Nokia is claiming that the newly unveiled Google Nexus 7 tablet infringes some of its patents, and that neither Google nor the product’s manufacturer, Asus, have approached it about licensing the IPR. The patents in question are said to be standards essential, and so would have to be licensed under Frand (fair reasonable and non-discriminatory) terms, but Nokia’s allegation is that Google has not sought to pay royalties at all.
No formal lawsuit has been filed, it seems, and Nokia is not officially commenting. The accusations were made to The Inquirer newspaper by a spokesperson for the Finnish firm, who said: “Nokia has more than 40 licensees, mainly for its standards essential patent portfolio, including most of the mobile device manufacturers. Neither Google nor Asus is licensed under our patent portfolio.”
That last comment could open the door for Nokia to attack the whole Nexus range. IPR majors (except Oracle) have generally steered clear of attacking Google directly, preferring to go after its partners, but the lines have blurred with the search vendor’s acquisition of Motorola Mobility, and its stepped-up activities in devices. Apple recently won a preliminary injunction against the Galaxy Nexus, which is co-braaded by Google and Samsung.
Nokia is likely to be intent mainly on increasing its revenues from its patents, at a time when other revenue streams are under intense pressure, rather than engaging in expensive, protracted and uncharacteristic legal assaults. “Companies who are not yet licensed under our standard essential patents should simply approach us and sign up for a license,” the spokesperson told The Inquirer.
However, if matters do come to court, it will get drawn into the broader war between Microsoft and the Android community. Microsoft has signed up many of the Android device makers to pay royalties for its IPR, but has a significant outstanding battle with Motorola Mobility, now part of Google.
One perhaps surprising absentee from the most recent round of IPR battles has been the ultimate mobile patent holder, Qualcomm, the focus of a titanic fight with Nokia and various antitrust probes around five years ago. However, the company ‘ for whom licensing revenues are not just a useful source of power and incremental revenue, but the lifeblood of its peculiar model ‘ is protecting itself in case of a renewal of hostilities.
It has altered its internal organization to protect its IPR licensing business, announcing a new subsidiary which will concentrate on open source wireless developments, at a time when patent royalties and lawsuits are playing their biggest role in years in the mobile competitive landscape. The new unit, Qualcomm Technologies (QTI), will contain the chip business as well as the R&D activities and those patents which are specifically related to open source software contributions. The parent company will retain the vast majority of the huge patent portfolio as well as the licensing business and corporate functions.
Qualcomm said it needed to make the change to protect its licensing business because the new QTI unit plans to increase its work with open source software, in which developments are shared with the industry at large. Some of the recent wave of patent lawsuits have focused on large vendors’ IPR holdings in open source platforms, notably Android.
Stacy Rasgon, an analyst at Bernstein, told Reuters that the change would not affect Qualcomm’s finances but was a forward looking effort to protect the high margin patent business. “If they do see a risk that their patents could leak out as part of their open source efforts obviously this is good,” Rasgon said. QTI will have no rights to grant licences held by the parent company, Qualcomm said. The firm denied that the reorganization was aimed at spinning off either of its major businesses, or that it was a response to an action by a third party.
HTC gains upper hand over Apple:
The US courts might have been taking time off for Independence Day, but Apple lawsuits carried on elsewhere. A judge in a London court, Christopher Floyd, ruled that HTC did not infringe four Apple touchscreen patents, including its slide-to-unlock feature, and additionally said that three of those patents were invalid.The judgment ‘marks a considerable defeat for Apple in the smartphone patent wars,’ said Peter Bell, a lawyer at Stevens & Bolton. ‘Two of Apple’s prize patents have been knocked out in the UK.’
In addition to the slide-to-unlock feature, the ruling covered Apple’s patents on tools used to scroll through photographs and change alphabets, and software allowing users to touch the screen in two spots simultaneously. Only the photo management one was deemed to be valid by Floyd. The same four patents are being contested by Apple and HTC in German lawsuits, scheduled to be heard later this year.
Apple recently failed to gain a ban on US imports of HTC handsets, including the new One X and the EVO 4G LTE, from the ITC (International Trade Commission). The Taiwanese vendor had previously removed a feature which had been judged, in an earlier ruling, to infringe Apple IPR. Apple claims the devices are still in violation nonetheless, and the ITC has launched an investigation of those assertions, but has refused to grant an emergency import ban in the meantime.