Paul Allen's Interval Licensing refiles suit, accuses Android of patent infringement

It's official: Microsoft co-founder Paul Allen's Interval Licensing can be added to the long list of patent holders asserting their rights against Google's Android mobile operating system.

In late August I blogged about Interval's patent infringement suit against multiple defendants including Apple and Google. On 10 December 2010, the US District Court for the Western District of Washington dismissed the original suit for lack of "sufficient factual detail" concerning the alleged infringements (particularly, the accused products and services) and set a 28 December 2010 deadline for an amended suit.

Some commentators overrated the relevance of that decision. It happens all the time that plaintiffs try to get away with broad and vague allegations at this stage of the game (i.e., before discovery). If their allegations are too unspecific, they will be told to do their homework. It's unrelated to the merits of the case.

For example, in an ITC investigation against Apple, Nokia needed three attempts to withdraw its infringement claims concerning one of its patents (for details see page 19 of the PDF document in my previous post). Apple didn't even oppose Nokia's desire to do so, but the Administrative Law Judge in charge of the case felt that Nokia's first two motions lacked some information required by the ITC. So let's always separate formal shortcomings from actual weakness.

After the dismissal of Interval's original complaint, spokesperson for Paul Allen confirmed immediately that the company was going to refile an amended suit with more specific allegations. And so it did yesterday (just in time before the deadline). The Seattle Times reported on the refiling and linked to the amended complaint.

The amended complaint makes a number of infringement allegations against Google, and those relate to (among other Google offerings) Android. There are two paragraphs that accuse Android. The first one:

44. Defendant Google has infringed and continues to infringe at least claims 4, 8, 11, 15, 16, 17, and 18 of the ’652 patent under 35 U.S.C. § 271 by making, using, selling, distributing, and encouraging customers to use devices containing the Android Operating System and associated software such as Text Messaging, Google Talk, Google Voice, and Calendar. Devices containing the Android Operating System and associated software infringe by displaying information including, e.g., text messages, Google Voice messages, chat messages, and calendar events, to a user of a mobile device in an unobtrusive manner that occupies the peripheral attention of the user. For example, as demonstrated by Exhibit 24, when a user receives a new Google Voice message, the Android Operating System and Google Voice software display a notification in the status bar screen for a short period of time.

The relevant patent is US Patent No. 6,034,652 on an "attention manager for occupying the peripheral attention of a person in the vicinity of a display device".

Paragraph 54 makes an equivalent assertion concerning a related patent:

54. Defendant Google has infringed and continues to infringe at least claims 1, 3, 7, 9, 10, 12, 13, and 15 of the ’314 patent under 35 U.S.C. § 271 by making, using, selling, distributing, and encouraging customers to use devices containing the Android Operating System and associated software such as Text Messaging, Google Talk, Google Voice, and Calendar, and by making and using the hardware and software that operate the Android and Android Market infrastructure. Google’s infringement of the ’314 patent that relates to Android results from substantially the same activities as its infringement of the ’652 patent, described above in [paragraph] 44.

The '314 patent is US Patent No. 6,788,314 and has the same title as the aforementioned '652 patent. The '314 patent is a continuation of a continuation of the patent application that resuled in the '652 patent.

If any of those infringement assertions against Android is true, this can spell trouble for makers of Android-based devices, and for Android application developers. The two paragraphs I quoted state clearly that the alleged infringement is an issue of "devices containing the Android Operating System", and the "Android Market infrastructure" is mentioned in the same context.

Patent holders can choose to sue Google, device makers, application developers, users, or any combination of the foregoing options. Most patent infringement suits related to Android target only device makers such as Motorola and HTC, but Interval Licensing is one of four right holders to sue Google directly. The others are Oracle, and Gemalto. Interval and Oracle could opt at any time to file suits against Android device makers, such as for the purpose to increase the pressure on Google. Gemalto and Vertical went after Google as well as some leading manufacturers.

Should Google be served an injunction as a result of Interval's suit, owners of Android phones (a group that includes me, by the way) would experience a very significant degradation of the user experience. Android's usability is generally under threat now because Apple already asserts various user interface (particularly multi-touch) patents against HTC and Motorola, and in its latest claims against Motorola, Microsoft also asserted a couple of touchscreen patents.

As I just mentioned Apple, it's also among the defendants named by Interval Licensing, but the infringement assertions don't target the iOS operating system. They relate to content recommendations provided to users by iTunes, the App Store, and Apple TV.

Was this the last smartphone patent suit for this year? It may have been, but not necessarily. A year ago, Nokia filed two complaints against Apple on the 29th of December.

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Nokia vs. Apple battlemap

Android is plagued by patent infringement suits like no other mobile platform, but in terms of a dispute between two companies, Apple vs. Nokia is the most advanced patent conflict at this stage. It started in October 2009 with a suit by Nokia that provoked counterclaims by Apple, which resulted in another suit by Nokia, and counterclaims, and so forth -- simply put, big-time escalation. Recently the parties also started a series of suits in Europe.

On Monday I published a visualization of the current state of affairs as well as all the steps that led to this situation:

NokiaVsApple_10.12.23

That PDF document, which you can download from Scribd.com, also contains detailed reference lists of all the asserted patents (numbers and titles), suits (venues, parties) and -- quite importantly -- the accused products. For example, the graphic below shows against which Apple products Nokia asserts which patents in the second of two Delaware suits:

I have previously created similar documents for Apple's disputes with Apple and Android device makers HTC and Motorola, and for Microsoft vs. Motorola. I also created a one-page overview of US International Trade Commission (ITC) investigations involving those players. You can find all those documents in this Scribd collection. For sharing the documents with others via Twitter, you may find the following Twitpics links useful:

Apple vs. Android
Microsoft vs. Motorola
Nokia vs. Apple
Overview of smartphone-related ITC investigations

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Microsoft versus Motorola: both parties filed new assertions, now 35 patents-in-suit -- new visualization

This week I got the impression that high tech companies -- especially if they're in the smartphone business -- now send each other patent suits instead of Christmas cards. Yesterday (23 December 2010) was particularly eventful, with heavyweights Microsoft and Motorola trading some additional patent infringement allegations.

Prior to this week, that dispute already involved 9 Microsoft patents, 17 Motorola patents, 3 US District Courts and complaints with the US International Trade Commission. Now we're talking about a total of 35 patents-in-suit (16 Microsoft patents and 19 Motorola patents). Motorola filed a new suit in the Western District of Wisconsin (where it previously filed two other ones) over 3 patents (one of which it previously asserted in another case, so the net gain is +2), and Microsoft made counterclaims in the Southern District of Florida, alleging the infringement of 7 of its patents.

Both companies have also expanded the range of products they accuse of infringing their patents. In its new suit, Motorola tries to attack the Kinect. In the aforementioned counterclaims, Microsoft asserts not only five patents against Android phones (just like it did before) but also two patents against Motorola set-top boxes with DVR functionality.

It's also worth noting that two of the seven patents added by Microsoft cover important touchscreen functionalities: US Patent No. 6,791,536 on "simulating gestures of a pointing device using a stylus and providing feedback thereto" and US Patent No. 6,897,853 on a "highlevel active pen matrix". While those patents were originally applied for in connection with "pointing devices" such as a stylus, they appear to cover user interface technologies that are nowadays most relevant in connection with touchscreens. Apple already asserts various touchscreen patents against Motorola (and other companies).

I could try to explain in detail how much this dispute has evolved in less than three months. But there's a better way to convey that information. I've put together a 13-page PDF document that shows you the current battlemap, then walks you through this in six steps, and finally there are 6 reference pages that list all of the patent numbers and titles and other detail concerning those suits, including, quite importantly, the accused products. You can look at it below (it's recommended to view it in full-screen mode) or on Scribd.com by clicking on the link:

MicrosoftVsMotorola_10.12.23

I previously produced two other visualizations (using consistent colors for the various companies). On Scribd I have created a collection of files describing smartphone patent disputes, to which I will soon add some new ones, including a visualization of the epic battle between Nokia and Apple.

For now, I wish you all a Happy (and Peaceful) Holiday Season!

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Hopewell Culture & Design sues Apple, top four Android device makers, Nokia, Adobe, Palm, Opera and Quickoffice over a user interface patent

Oh well, Hopewell: a company named Hopewell Culture & Design just filed one of those one-patent-against-many-defendants type of suits. The company -- about which Google hasn't indexed anything except for a few references to this patent suit -- holds a user interface patent and yesterday filed a complaint with the US District Court for the Eastern District of Texas, asserting it against 11 defendants: Apple, the top four Android device makers -- Motorola, Samsung (two different Samsung entities are named), HTC, LG --, Nokia, Adobe, Palm, Opera and Quickoffice.

The company seeks injunctive relief and monetary damages for what it claims to be infringements of US Patent No. 7,171,625 on "double-clicking a point-and-click user interface apparatus to enable a new interaction with content represented by an active visual display element". The application was filed on 18 June 2002 and assigned to Actify, a San Francisco-based software company specialized in computer-aided design (CAD). The nature of the relationship between Actify and Hopewell Culture & Design is unclear at this stage.

Having read the description of the patent and the infringement allegation against each of the defendants ("software allowing a user to double click or double tap a visual element representing interactive content and interact with a second version of the interactive content"), I wouldn't be surprised if the defendants managed to present prior art. By the time the application was filed (mid 2002), graphical user interfaces already provided functionality that one could consider similar to this technique. This suit may make unlikely bedfellows in terms of companies suing each other over patents (Apple has disputes with Nokia, HTC and Motorola going) but possibly deciding to cooperate to invalidate this patent asserted against all of them and so many others. Prior art is always a difficult question of law whether there was still some inventive step involved that justified the grant of a new patent. That's why most of the time I refrain from commenting on prior art questions at all unless they are raised in a substantiated form in official documents filed with courts.

The accused products are: Adobe Reader, iPhone, iPad, four Android-based HTC smartphones (Droid Eris, Droid Incredible, Hero, EVO), LG Envy Touch (this may mean the original LG enV Touch but could also include the announced, Android-based LG enV Touch 2), two Android-based Motorola phones (Droid and Droid X), two relatively new Nokia phones (N900 and N97), the Opera Mini browser for mobile devices, the Palm Pre, the Quickoffice Connect Mobile Suite software (available for several operating systems), and two Samsung phones (the Android-based Captivate and the Rogue, which runs proprietary Samsung software).

So the flood of mobile patent suits continues. I didn't even report on another suit filed on Tuesday: Wireless Recognition Technologies LLC sued Nokia and others (also in the Eastern District of Texas) over US Patent No. 7,856,474 on a "method and apparatus for identifying documents using a handheld device". In Nokia's case, the infringement allegation targets its Point & Find mobile application, which is an augmented reality browser, and while it appears to be an app as opposed to pre-installed software, the plaintiff broadly accuses any "Nokia's cellular phones capable of using Nokia's Point and Find mobile application". Yesterday I reported on Hybrid Audio LLC's suit against Apple, HTC and Dell, and the day before on a complaint filed by Alcatel-Lucent subsidiary Multimedia Patent Trust against Apple, LG, Canon and TiVo.

Of the four new mobile suits I've already reported on this week, the Multimedia Patent Trust case is probably going to be the most interesting one because there's a large and powerful organization behind it, the company has previously litigated against the MPEG world and its dog, and it asserts multiple patents. But I'll keep an eye on some "smaller" cases as well since any of them could have major implications further down the road, even if they may not appear frightening, much less shocking, at the outset.

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Hybrid Audio LLC sues Apple, HTC and Dell over allegedly MP3-related patent

Yesterday I just reported on a patent infringement suit filed by Multimedia Patent Trust, an Alcatel-Lucent subsidiary, against Apple, LG, Canon and TiVo. The four patents-in-suit are related to video codecs. And here's an audio patent suit: Hybrid Audio LLC of Tyler, Texas, filed a suit yesterday with the US District Court for the Eastern District of Texas against Apple, HTC and Dell over US. Patent No. RE40,281 on "Signal processing utilizing a tree-structured array". The patent-in-suit is a reissue of a patent that was applied for in 1997: US Patent No. 6,252,909 on a "multi-carrier transmission system utilizing channels of different bandwidth".

Allegedly, the defendants infringe that patent with various products "that contain or use hardware and/or software for processing audio information in accordance with the MPEG-1 Layer III (MP3) standard."

I've tried to find out more about that company and will add new information here as it becomes available. Hybrid Audio LLC of Tyler, Texas, isn't necessarily -- and at first sight not too likely to be -- related to Hybrid Audio Technologies of Atlanta, Georgia.

Instead, I found out that the reissue patent (application filed on 23 November 2004) and the original patent (application filed on 25 February 1997) were assigned to Aware, Inc. of Bedford, Massachussetts, a company trading on NASDAQ under the AWRE ticker symbol.

That company claims to have focused at least for a certain period of time on "wavelet mathematics applications, digital compression, and telecommunications and channel modulation and coding".

It's not surprising if a company like that obtained an allegedly MP3-related patent. What's unclear for now is whether Aware is behind Hybrid Audio LLC or sold its patent to that entity (directly or indirectly) some time ago. Aware did sell off some assets in the past, and this patent may or may not have been part of such transactions. In the USPTO database, Aware is still listed as the assignee of the patent, but that information may be outdated. There could have been one or more transactions that haven't been reflected in the USPTO database, at least not yet.

[Update] There was a press release earlier this year according to which Aware planned to spin off its IP licensing operations. That could be the answer (not verified yet). Thanks to Patrick Anderson of Gametime IP for the information. [/Update]

Hybrid Audio LLC's complaint looks like the company doesn't believe there are any commitsment in place concerning that patent and the MP3 standard. There's a request for an injunction and no reference to reasonable and non-discriminatory licensing commitments.

The MP3-related infringement allegation I quoted is very broad. The complaint, however, focuses on a smaller number of specifically accused products: the Android-based HTC Evo 4G smartphone; Apple's iPod nano, iPhone 4, iPad, MacBook Pro, and iTunes; and Dell's Inspiron desktops, Studio desktops, Alienware desktops, Inspiron laptops, Adamo laptops, XPS laptops, Alienware laptops, Streak pocket tablet, and Android-based Aero smartphone.

The video codec suit I analyzed yesterday also targeted, besides Apple's iPhone, some Android-based devices. And again, smartphones based on Windows Phone 7 are not affected.

Priorsmart newsletter invitation

I became aware of this new suit through Priorsmart's daily newsletter that lists new patent suits. If you're also interested in subscribing to it, here's an invitation. I find it really useful.

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Alcatel-Lucent subsidiary Multimedia Patent Trust sues Apple, LG, Canon and TiVo: AT&T video codec patents rear their ugly head again

Certain patent portfolios give rise to litigation again and again over the years. An Alcatel-Lucent subsidiary named Multimedia Patent Trust has previously litigated against Microsoft, Gateway, Dell and a long list of consumer electronics manufacturers and broadcasters over patents originally obtained by AT&T (Lucent was an AT&T subsidiary, while it is now part of Alcatel-Lucent). It was also at the center of litigation instigated by the MPEG LA licensing organization that claimed some patents held by the Multimedia Patent Trust had actually been committed by its corporate parent to MPEG patent pools (more on that further below).

Yesterday, Multimedia Patent Trust filed a new complaint against Apple, LG, Canon and TiVo with the US District Court for the Southern District of California, alleging the infringement of four different patents. All of those patents related to video codecs (encoding/decoding technologies). Canon is alleged to infringe all four of those patents; Apple and TiVo, three of them; and LG, two of them.

The accused products include pretty much the whole range of Apple's offerings, Canon's VIXIA camcorders and video processing software (such as Roxio MyDVD), no less than 64 different LG mobile phones (apparently, however, not including its LG Optimus 7 Windows-based phone), and several TiVo digital video recorders as well as its Desktop Plus software.

For Apple and LG, it's only about money: injunctions against them are highly unlikely

Two of the four asserted patents have already expired, another one will expire within less than a year, and the fourth patent in the spring of 2014. Multimedia Patent Trust seeks an injunction concerning whichever patents will not have expired by the time of the ruling, which will realistically be only the fourth one -- which is, however, asserted only against Canon and TiVo but not against Apple and LG -- or maybe none at all. So at least for Apple and LG, the risk of an injunction is next to nil, and for Canon and TiVo it's connected to only one of the patents. But even after expiration of a patent, its owner can collect damages for past infringement, and that's what Alcatel-Lucent really seems to be going after.

In the following paragraphs I'll take a closer look at the patents-in-suit, the accused products, Multimedia Patent Trust's litigation history, and its choice of forum.

As a side note, the suit was filed by the law firm of Quinn Emanuel Urquhart & Sullivan, which specializes in litigation, is representing Motorola against Apple on multiple fronts, and is known for its closeness to Google and long-standing relationship with IBM. However, it appears that the Quinn Emanuel attorneys working on this matter are all based in Los Angeles and not involved with any of the litigation between Apple and Motorola (I will double-check on this).

Priorsmart newsletter invitation

Before I go into more detail, let me tell you that I became aware of this new suit through Priorsmart's daily newsletter that lists new patent suits. If you're also interested in subscribing to it, here's an invitation. I find it really useful.

The four patents-in-suit

US Patent No. 4,958,226: Conditional motion compensated interpolation of digital motion video; application filed on 27 September 1989, expired last year; asserted against Apple, Canon and TiVo, but not against LG

US Patent No. 5,136,377: Adaptive non-linear quantizer; application filed on 11 December 1990, just expired; asserted against all four defendants and previously against Microsoft and others

US Patent No. 5,227,878: Adaptive coding and decoding of frames and fields of video; application filed on 15 November 1991, will expire in November 2011; asserted against all four defendants

US Patent No. 5,500,678: Optimized scanning of transform coefficients in video coding; application filed on 18 March 1994, will expire in March 2014; as I mentioned, this one is not asserted against Apple and LG; it is asserted against Canon and TiVo, and it was previously asserted against Microsoft and others

Accused products

I previously gave a rough overview of the products that allegedly infringe the asserted patents. Let's take a closer look at the accused Apple and LG products.

Three of the patents (all but the fourth one) are asserted in some way against Apple. The list of accused products for each of those three patents have many products in common: a range of computers (MacBook, MacBook Pro, MacBook Air, iMac, Mac Mini, Mac Pro), a range of video processing software (Final Cut Studio, Final Cut Express, Final Cut Pro, Final Cut Server), Apple's iLife software suite, Apple's QuickTime X and QuickTime Pro codecs, the iPhone 4, and the iPod touch (4th generation).

The '226 and '878 patents allegedly also read on the QuickTime Player, iTunes, the iPad, and AppleTV. The '337 and '878 patents are allegedly also infringed by the iPhone 3GS (the '878 also by the iPhone 3G) and the 5th generation iPod nano, whereas the '878 patent is furthermore asserted against the 6th generation iPod and additional generations of the iPod nano (3rd through 5th) and iPod touch (1st through 4th).

The assertions against LG appear to relate to different operating systems. They include some Android phones such as the Ally or Optimus M but I didn't find any LG products based on Windows Phone 7 at first sight (I specifically looked for the LG Optimus 7). Given that the same patent holder previously settled litigation with Microsoft, there may be arrangements in place that take care of that.

Here's the complete list of accused LG phones: Ally (V5740), Apex (US740), Axis (LGAS740), Banter Touch (UN510), Bliss (UX700), Chocolate (VX8500), Chocolate (VX8550), Chocolate 3 (VX8560), Chocolate Touch (VX8575), Dare (VX9700), Decoy (VX8610), Encore (GT550), EnV (VX9900), enV Touch (VX11000), EnV2 (VX9100), EnV3 (VX9200), eXpo (GW820), Fathom (VS750), Force (LX370), Glimmer (AX830), Incite (CT810), Invision (CB630), Lotus (LX600), Muziq (LX570), Neon (GT365), Neon II (GW370), Octane (VN530), Optimus (P509), Optimus M (MS690), Optimus S (LS670, Quantum (C900), Prime (GS390), Rhythm (AX585), Rhythm (UX585), Rumor (LX260), Scoop (AX260), Shine (CU720), Spyder (LG830), Spyder II (LG840), Swift (AX500), Trax (CU575), Tritan (AX840), Tritan (UX840), Venus (VX8800), Versa (VX9600), Vortex (VS660), Voyager (VX10000), Vu (CU915), Vu (CU920), Wave (AX380), Xenon (GR500), AX565, AX8600, CF360, CU500v, CU515, LG260, LG380, LX400, UX380, VX8350, VX8360, VX8700, VX9400.

In my reporting on smartphone disputes, I will increasingly discuss the accused products. You can find information on accused products in some other -- actually even more important -- cases in my new one-page chart covering major ITC investigations related to smartphones as well as in the reference part (after the diagrams) of my Apple v. Android visualization.

Litigation history

I said before that Multimedia Patent Trust has a history of litigation, and I mentioned a controversy with the MPEG LA patent pool company.

A few years ago, Multimedia Patent Trust obtained a $1.53 billion jury verdict against Microsoft, which was and probably still is the record amount of patent infringement damages ever awarded by a jury in a US court -- in fact, a jury of the same court in which it filed this new suit. However, the Alcatel-Lucent subsidiary never received the full amount. On 6 August 2007, the judge tossed out the jury verdict after a second review. Observers attributed that decision to standards previously established by the US Supreme Court.

I found an SEC filing by Microsoft that summarizes this litigation (Microsoft refers to Alcatel-Lucent, the parent company of Multimedia Patent Trust) and the outcome:

"In 2003 we filed an action in U.S. District Court in California seeking a declaratory judgment that we do not infringe certain Alcatel-Lucent patents (although this action began before the merger of Alcatel and Lucent in 2006, for simplicity we refer to the post-merger entity of Alcatel-Lucent). In April 2008, a jury returned a verdict in Alcatel-Lucent’s favor in a trial on a consolidated group of one video and three user interface patents. The jury concluded that we had infringed two user interface patents and awarded $367 million in damages. In June 2008, the trial judge increased the amount of damages to $512 million to include $145 million of interest. We have appealed. In December 2008, we entered into a settlement agreement resolving all of the litigation pending between Microsoft and Alcatel-Lucent, except one of the two patents the jury concluded we had infringed in the April 2008 verdict. Approximately $500 million remains in dispute in the remaining matter. In April 2009, the U.S. Patent and Trademark Office, after a reexamination of the remaining patent in dispute, determined that the patent was invalid."

So while the exact amount isn't mentioned, it's clear that it was nowhere near the original $1.53 billion, given that the last damage award appealed by Microsoft amounted to about a third of that amount, and if it was settled, it was presumably settled for less.

Wikipedia has an article dedicated to Alcatel-Lucent v. Microsoft.

Two of the four patents asserted against Apple, LG, Canon and TiVo were also used against Microsoft, but it appears that Microsoft never accepted those patents as valid, nor admitted an infringement. I venture to guess that the defendants in this new case will also contest the validity and the alleged infringement of the patents-in-suit.

MPEG LA sued Alcatel-Lucent over some patents considered essential to standards

In November 2007 -- even before the aforementioned litigation was settled -- MPEG LA sued Alcatel-Lucent in Delaware, claiming that Alcatel-Lucent as a member of the MPEG LA patent pool had an obligation to license certain patents on reasonable and non-discriminatory (RAND) terms but set up Multimedia Patent Trust as a formally separate entity only in order to circumvent those obligations. Bloomberg quoted a lawyer for MPEG LA as saying that "preventing the patents from being swept into the MPEG LA portfolio was the one and only reason for the transfer of the patents to the trust". Betanews quoted an MPEG LA statement:

"The only purpose of the transfer was to avoid Alcatel's contractual commitment in order to extract additional royalties from MPEG-2 patent pool licensees."

There's a term for that kind of alleged behavior: patent ambush.

On 29 March 2010 MPEG LA proudly announced a settlement of the case, following two days of trial that didn't appear to have gone too well for Alcatel-Lucent. MPEG LA said:

"As part of the settlement, in addition to other consideration, the Multimedia Patent Trust will submit the patents that were diverted to it in conjunction with the 2006 merger between Lucent and Alcatel for a determination of essentiality in accordance with MPEG LA’s normal procedures. If it is determined that one or more of the patents are MPEG-2 Essential Patents or MPEG-2 Systems Essential Patents, the Multimedia Patent Trust will join the MPEG-2 Patent Portfolio License and/or the MPEG-2 Systems Patent Portfolio License as a Licensor and all such patents will be included."

So the key question that still had to be resolved after the settlement was whether any of those patents were considered essential to the MPEG-2 standard. The latest list of MPEG-2 patents (as of 01 October 2010) indeed contains several Alcatel-Lucent patents. However, none of those are asserted in this new suit against Apple, LG, Canon and TiVo.

By asking for a straightforward injunction (concerning those patents that haven't expired), Multimedia Patent Trust indirectly asserts in its new complaint that the patents-in-suit are not essential to an industry standard.

It remains to be seen whether the defendants are going to claim that those patents belong to either MPEG-2 or some other industry standards concerning which Alcatel-Lucent made commitments in the past. In some other ongoing patent infringement disputes, such RAND commitments play a key role: Myriad Group [Google ally] v. Oracle, Microsoft v. Motorola, and Apple v. Nokia.

I will keep an eye on what happens in this case since it involves major players, but like I said before, at least from a smartphone point of view it's only about money, not about possible injunctions.

Apple can probably handle the cost of this easily: if it can't win the case, it can just write a check. If LG loses, it may have to add yet another company to a long list of patent holders seeking royalties on Android-based devices. However, it's nothing new that Google's mobile operating system isn't truly "free" because of patent licensing (and litigation) costs.

This case can have certain effects on the high tech industry, and it might raise interesting legal questions. But if you're primarily interested in disputes that may result in products potentially becoming unavailable within a year or two, I recommend focusing particularly on certain ITC investigations.

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Overview of smartphone-related ITC investigations: who complains against whom over which products?

On Friday (17 December 2010), the US International Trade Commission announced the launch of an investigation "of certain gaming and entertainment consoles, related software, and components thereof" based on a complaint filed by Motorola against Microsoft four weeks earlier. I commented on that complaint at the time. All comparable complaints have also given rise to investigations, so this isn't a major milestone. Anything else would have been a big surprise.

The ITC usually takes about four weeks before launching an investigation, so this was the last smartphone-related ITC proceeding to start in 2010. More filings are still possible, however. For example, Nokia complained against Apple on 29 December 2009.

Actually, Motorola's complaint against Microsoft is only indirectly smartphone-related: it's just about the Xbox 360 gaming console, but it's part of a wider dispute between the two parties that started with Microsoft's complaints against Motorola on 01 October 2010 -- and those complaints related to Motorola's Android-based smartphones.

At this point I thought it would be useful to provide an overview of ongoing ITC investigations related to smartphone technologies:

Smartphone-Related ITC Overview 10.12.20

I focused on the ones in which both the complainant and the respondent are major players. Even between those big organizations, many more suits have been filed with US federal courts as well as -- more recently -- a few in Europe (between Apple and Nokia), but the ITC is particularly important because it generally decides more quickly than district courts. I previously wrote about its role as a patent enforcement agency.

If it isn't displayed above, you can also find the overview document on this Scribd page).

The accused products are important to consider. The chart shows that some companies have a large number of products under attack, some even by two or more right holders. By contrast, Microsoft only has to fend off a complaint involving the Xbox.

Concerning the colors I chose for the different companies, I explained my reasoning in this posting two weeks ago. At the time I published a visualization of Apple's disputes with Android-based device makers HTC and Motorola (all disputes, not only ITC investigations).

And now just imagine what it would mean for the US market if all of the accused products were banned by the ITC. It's unbelievable, but not impossible.

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CPTN Holdings LLC (acquirer of 882 Novell patents): Microsoft, Apple, EMC and Oracle are the partners according to German antitrust notification

Breaking news: Twitter user @VM_gville (whose account has meanwhile disappeared) pointed me to the website of the German federal antitrust authority ("Bundeskartellamt"), which discloses a merger (or more precisely, joint venture) notification filed a week ago (on 09 December 2010), according to which the four companies behind CPTN Holdings LLC -- the acquirer of 882 Novell patents -- are Microsoft, Apple, EMC, and Oracle. The product market in which the newly formed company plans to operate is defined as "patents".

Three weeks ago I already commented on the recent announcement of Attachmate acquiring Novell and the sale of 882 Novell patents, in exchange for $450 million, to CPTN Holdings LLC. At the time, the full list of CPTN Holdings LLC partners was not known. The entity was described as a "consortium organized by Microsoft."

Just like many people, I was certainly curious as to which companies were Microsoft's partners in this new organization. The group could have consisted of Microsoft plus several considerably smaller companies. But this impressive list of companies shows that Microsoft's partners are very powerful players themselves, true counterweights without a doubt.

When I commented on the original announcement, I wrote that "it's certain that the decisions of the consortium will not be taken by Microsoft singlehandedly. That fact should actually give a lot of comfort even to those who don't want to trust Redmond."

Now that the other companies are known to be such major players, I can only reiterate what I wrote then. I don't know much about EMC other than that it's a very significant company. I do know that Apple and Oracle are clearly companies who have different approaches to some important issues than Microsoft. Within the consortium, the four players will have to agree on a common denominator concerning the patents to be acquired. They've apparently been able to agree that those patents are valuable assets to own. I still don't know the list of those patents, but it's important progress that we now have the names of the companies, thanks to the German competition authority.

I don't have a crystal ball that would tell me what their business plan with those patents is, but those organizations have a track record and, very importantly, they have a reputation to protect. They all want to enjoy excellent relations with software developers, and software developers expect large players to make reasonable and constructive use of whatever patents they own. I guess that's exactly what will happen in this case.

[Update] AllThingsD quotes an anonymous source inside one of the four companies describing this patent deal as "cheap defensive insurance".

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European Interoperability Framework recognizes that FOSS-compatible FRAND licensing works for open standards and open source

The European Commission just adopted and published its communication "Towards interoperability for European public services". It consists of several documents, and the part of it that I'm going to comment on now is the new revision (version 2) of the European Interoperability Framework, a set of interoperability-related procurement guidelines for "public administrations establishing new European public services". That document is available here.

The EIFv2 gave rise to quite a bit of controversy in recent months, with lobby groups claiming that the intiative wouldn't create a level playing field for open source software. I blogged about the debate on several occasions.

Looking at the final document now, I am delighted to see that the Commission adopted a pragmatic and inclusive definition of open standards. That part of the document was the primary bone of contention, and the compromise that has ultimately been found is absolutely consistent with the middle ground I outlined two months ago -- in this post.

When I discussed my thinking, I was concerned about a communication breakdown. There was a certain camp claiming -- falsely, in my opinion -- that FRAND (fair, reasonable and non-discriminatory) licensing wouldn't be compatible with open source licenses. They said only royalty-free, or generally restriction-free, licenses would work for open source. Others said that FRAND licensing -- an approach favored by the EU in some vey important contexts -- should be fully recognized as an element of open standards. That camp mostly consisted of patent holders who don't want to check in their intellectual property rights at the door when doing business with governments, and who were concerned about FRAND potentially appearing to be a second-class citizen in the world of standardization. Those concerns related to some organizations' demands to declare FRAND licensing less open than royalty-free terms.

The two camps appeared irreconcilable, but I believe the Commission has solved the conundrum.

The European Commission's definition of open specficiations (open standards)

5.2.1 Specifications, openness and reuse

The level of openness of a formalised specification is an important element in determining the possibility of sharing and reusing software components implementing that specification. This also applies when such components are used for the establishment of new European public services.

If the openness principle is applied in full:

• All stakeholders have the same possibility of contributing to the development of the specification and public review is part of the decision-making process;

• The specification is available for everybody to study;

• Intellectual property rights related to the specification are licensed on FRAND terms or on a royalty-free basis in a way that allows implementation in both proprietary and open source software.

Note that the above definition describes a state of "openness [...] in full". Everything included in the definition -- FRAND as well as royalty-free licensing -- is, therefore, recognized as fully open. In my view, that makes sense. One can grant a royalty-free license on a non-open standard, and one can charge FRAND royalties (and/or impose other FRAND terms) on an open standard without "closing" it that way.

Level playing field: let open source and proprietary software compete and customers benefit

The key part is that the Commission wants that any intellectual property relevant to standard be licensed -- whether on a FRAND or royalty-free basis -- "in a way that allows implementation in both proprietary and open source software." In a Q&A document, the Commission states the intention behind this requirement:

In this way, companies working under various business models can compete on an equal footing when providing solutions to public administrations while administrations that implement the standard in their own software (software that they own) can share such software with others under an open source licence if they so decide.

That's a clear reference to some people's demands for a "level playing field". I mentioned that some claimed only royalty-free licenses would provide open source and proprietary software with equal opportunities. But that's not true: open source companies can also license patents and other intellectual property from right holders if necessary. What's key is to ensure that FRAND license terms for open standards can work for companies distribution software under open source licenses.

The compromise roadmap I published in October called on both camps to meet each other half way. I said that some FRAND terms don't work for open source while others do, and open source-compatible FRAND appeared to me to be the logical compromise. Quite apparently, the Commission took the same approach in its effort to support the open source model without favoring it over proprietary software. There are major right holders in Europe who hold patents on standards, and the EU always has to balance its love of open source with its responsibility for economic growth. It's all about balance as opposed to playing favorites the way some lobbyists self-servingly demanded.

Neutrality concerning (reasonable) open source licenses

The aforementioned principle of inclusiveness and a level playing field also appears to govern the Commission's approach to competition between different open source license. I just quoted the Q&A document's reference to "shar[ing] such software with others under an open source licence". Note that the Commission says "an open source license". Yes, "an". One of many.

It doesn't favor any particular license such as the GPL over the Apache Software License or the BSD License over the Mozilla license: that's a fight for different camps of the FOSS community, but for policy makers it's better to stay out of it.

The EIF doesn't even promote the EU's own EUPL in connection with open specifications, although the EUPL is generally the recommended open source license for public administrations in Europe.

The Commission is clearly neutral on the choice of an open source license. It doesn't define open standards in a way that meets the extreme requirements of licenses that were purposely designed to be incompatible with intellectual property licensing. There's no shortage of licenses out there that can deal with FRAND-based standards, provided that the relevant FRAND licensing terms are compatible with free and open source software.

The Commission even recognizes that in some situations it may make sense to choose a standard that may not be fully consistent with its definition of open specifications:

However, public administrations may decide to use less open specifications, if open specifications do not exist or do not meet functional interoperability needs.

In all cases, specifications should be mature and sufficiently supported by the market, except if used in the context of creating innovative solutions.

Once again, the Commission shows it's above the fray. It wants to leave as much as possible to market dynamics. The Commission contents itself with requiring open specifications -- whether FRAND-based or royalty-free -- to be compatible with open source licensing, enabling competition between the models as well as competition between different open source licenses. The best is the enemy of the good. Public administrations need solutions regardless of ideology. That's the focus of the EIF the way I see it. A beacon of pragmatism, and exactly the approach I hoped for two months ago.

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Google ally Myriad Group and Oracle sue each other over Java licensing: so much for Swiss neutrality

Bloomberg was first to report that "Myriad Group AG, a Swiss software developer, sued an Oracle Corp. unit in the U.S. for at least $120 million in restitution for allegedly charging excessive license fees for the Java programming language."

I have reviewed the complaint, which was filed on Friday with the US District Court for the District of Delaware. This matter is clearly connected to the ongoing patent litigation between Oracle and Google and the wider conflict concerning Oracle's Java licensing policies in connection with mobile platforms. What we are seeing here is a phalanx formed against Oracle by Google, Apache and Myriad. Myriad Group is advised by King & Spalding, the law firm that defends Google against Oracle.

Earlier today I wrote about two things that happened last week and don't bode well for Google: a Federal Circuit ruling makes it unlikely that Google can invalidate Oracle's Java patents on subject matter grounds, and the Apache Software Foundation's divorce from the Java Community Process shows that Oracle won't make concessions only to appease the open source community.

My prima facie assessment of Myriad's case is that it may make Oracle look bad -- especially in light of Oracle's "open standards" lobbying -- but I don't believe it will ultimately tilt the scales in Google's favor. This case may be more than a tempest in a coffee cup. However, for now I have doubts about its merits, and its potential impact appears to be limited at any rate. This secondary theater of war certainly isn't a substitute for countersuing for patent infringement, which is what Google would really have to do (but apparently can't).

In the following I'll share my first observations on Myriad's complaint.

[Update] I have now received a copy of the complaint Oracle filed against Myriad on the same day with the US District Court for the Northern District of California. Oracle alleges that Myriad fails to comply with its royalty obligations and makes unauthorized use of the Java trademark, including the Java logo.

Myriad's Java business

On Twitter, Myriad claims to be "Europe's largest mobile software company". On its corporate website, it calls itself "a global leader in mobile technology having shipped over 3.7 billion applications on over 2.2 billion phones" and to be "#1 in browser, messaging and Java."

Apparently it generates little revenue on a per-unit basis. For the first nine months of 2010, Myriad reported revenues of $84.3 million. At yesterday's (13 December 2010) closing of the Swiss stock exchange, Myriad Group's market capitalization amounted to 210 million Swiss francs, the equivalent of about $215 million. By demanding $120 million from Oracle for itself and its customers, the company asks for more than half of what it's worth in its entirety.

Java is only one of several business areas but appears to be a relatively important one for Myriad. Myriad offers Jbed Advanced, a Java ME platform for which it claims "superior performance, features, portability and development tools." Myriad also offers a product named Myriad Dalvik Turbo, "a seamless, high performance replacement for the Android Dalvik Virtual Machine increasing application execution speed by up to five times", and Myriad J2Android, "a simple and efficient converter for MIDlets" that it claims allows "phone manufacturers, mobile operators and mobile application stores can bring thousands of existing Java applications to Android devices." MIDlets are Java ME applications that use an embedded Java specification named Mobile Information Device Profile. According to Wikipedia, typical MIDlet applications "include games running on mobile devices and cell phones which have small graphical displays, simple numeric keypad interfaces and limited network access over HTTP."

Myriad claims unFRANDly conduct by Oracle/Sun

This is only the latest in a series of lawsuits related to mobile technologies and FRAND licensing commitments. FRAND ("fair, reasonable and non-discriminatory") -- sometimes also referred to as RAND -- is a widely used set of criteria for licensing terms. The first suit (of several) filed by Nokia against Apple related to patents concerning which Nokia had made a commitment to grant licenses on FRAND terms, and the two companies disagree on what that means in their specific case. FRAND is also at issue between Microsoft and Motorola.

Countless deals in the industry are concluded in the context of FRAND commitments, but in a small number of cases there are disagreements. Myriad Group's complaint against Oracle is largely based on the allegation that Oracle (as the acquirer of Sun) "has consistently failed to honor [...] licenses" under which Myriad believes to to be entitled to use Java-related intellectual property rights "either royalty free or on fair, reasonable and non-discriminatory (FRAND) terms."

A central allegation is that Myriad felt forced to enter into "a Master Support Agreement ('MSA') [with Oracle/Sun], pursuant to which Myriad is (and in certain circumstances its customers are) obliged to pay unreasonable, unfair and discriminatory annual fees."

Myriad then makes the following claims:

"43. Since 2004 Myriad has paid $20 million in such royalties to Sun. On information and belief, Myriad's customers have paid in excess of $100 million in royalties to Sun.

44. The non-FRAND nature of the royalties is evident in that Sun is selling products similar to Myriad's, and has attempted to win away Myriad’s current and potential customers by representing that Sun's price for the finished product is lower than the licensing royalties it charges Myriad."

So Myriad claims it is disadvantaged in the market place: the royalties it must pay Oracle/Sun for implementing the Java standard are allegedly too high for Myriad to offer competitive prices. Myriad's complaint cites some examples of Myriad, according to its representation, finding itself unable to do business with certain prospective customers when competing with Oracle/Sun. Myriad claims that Oracle/Sun offered a prospect named Cyberlink "a price lower than the per-unit royalty Myriad was forced to pay Sun" and told another prospect, a company named Alticast, "that Oracle (Sun’s corporate parent) could sell Alticast a finished Java implementation for the same price that it charges to Myriad to license the code, thus making it impossible for Myriad to recover the royalty cost imposed by Oracle."

Myriad makes allegations that go beyond pricing. Item 48 of its complaint accuses Oracle/Sun of "launching a comprehensive campaign designed to exclude Myriad from the downstream market for implementations of the relevant Java specifications." It adds:

"49. As part of this campaign, Sun has repeatedly, and erroneously, told current or potential customers of Myriad that Myriad is no longer licensed to produce Java-compliant implementations, implying that they should purchase similar Sun products instead."

Myriad cites different theories as to why Oracle/Sun was allegedly wrong. One key argument Myriad makes is that under the Java standard-setting agreement (to which both Oracle/Sun and Myriad are parties) Myriad believes it is entitled to a license on FRAND terms.

To underscore the economic impact of this, Myriad claims it has presumably "lost a number of major potential customers due to Sun's actions, including Sharp, Pioneer, Vividlogic, and Mitsubishi." The use of the word "lost" in this context confuses me. You can lose an existing customer, or you can fail to sign up a prospective new customer, but you can't lose something you've never had. But the message is clear: Myriad says Oracle/Sun engages in unfair practices, all of them ultimately coming down to the question of FRAND terms, to disadvantage Myriad and potentially shut it out of the market for Java implementations.

HotSpot

Myriad stresses in its complaint that it "does not and never has used Sun’s HotSpot code in its products." HotSpot is Oracle/Sun's primary Java virtual machine for servers and clients. Allegedly, "Sun insisted that Myriad enter into 'Sun Community Source Licenses' (SCSLs) for HotSpot code" regardless of that code not being used by Myriad. So the company wants access to certain royalty-free or FRAND licenses available for independent Java implementations.

The Apache Software Foundation similarly complains that Oracle/Sun doesn't grant a Java license on such terms to its Harmony project. In both cases, I believe the primary reason for disagreement between Oracle and those third parties is that Oracle's Java licenses have a field-of-use restriction concerning mobile devices. Clearly, that is a business area in which Oracle wants to monetize Java and is less generous about independent implementations.

But field-of-use restrictions come with many FRAND licenses, so one cannot claim categorically that such restrictions constitute a failure to honor FRAND licensing commitments. It really depends on the specifics of the case.

A phalanx consisting of Google, Apache and Myriad

The nature of Myriad's complaint is very similar to Google's and the Apache Software Foundation's disagreements with Oracle over Java licensing. All three cases are about Java on mobile devices.

Maureen O'Gara therefore wonders whether Myriad is "pinch-hitting for Google?" and writes:

"Conspiracy theorists might suspect that Myriad is a stand-in for Google."

Actually, the connection is unconcealed. Myriad is represented by the Delaware law firm of Potter Anderson & Corroon, but there's also an "of counsel" involvement by King & Spalding. That firm defends Google against Oracle. In fact, one of the two King & Spalding lawyers mentioned at the end of Myriad's complaint, Scott T. Weingaertner, is the first King & Spalding attorney to be listed below Google's answer to Oracle's amended complaint.

On a web page, Myriad lists its "industry partners", and its role as "founding member of the OHA [Open Handset Alliance]" is first of the list, followed by Symbian and the Java Community Process.

Myriad is particularly close to HTC. It's involved as a "non-party" with the ITC's investigation of Apple's patent infringement claims against HTC. On 11 November 2010, Myriad (represented by King & Spalding) opposed an Apple motion (Apple sought to enforce a subpoena directed to Myriad Group). For an overview of Apple's patent disputes with Android device makers HTC and Motorola, please see this recent post that includes a visualization of the different cases.

It's easy to see how Myriad's complaint is in Google's interest. If Myriad succeeded, it might lower the license fees Oracle is allowed to charge for Java, and even though Oracle might still have legitimate reasons for denying Google a license on such terms or on any terms, a potential settlement between Oracle and Google would not be entirely detached from what Oracle charges other Java licensees. But whether Myriad can win this remains to be seen. Like I said further above, field-of-use restrictions aren't necessarily at odds with FRAND licensing commitments.

A request for "at least" $120 million (to compensate for allegedly excessive royalties) also isn't going to scare the living daylights out of Oracle (apart from appearing extremely high anyway, given the size of Myriad's business).

I guess what the Google-Apache-Myriad alliance really tries it to tackle Oracle's Java licensing policies from different angles. There's Google, which claims as part of its defense against Oracle's patent infringement suit that it's entitled to do what it does. There's Apache, an open source entity. A non-profit that represents a part of the community. And now there's Myriad, which raises unfair competition issues and claims that it has suffered economic harm.

Google and Apache coordinated their voting at last week's meeting of the Executive Committee overseeing the Java Community Process. Google and Myriad work with the same lawyers, so at the very least there's coordination in place and given that Google has so much of an interest in this issue and far deeper pockets than Myriad, this complaint may very well be subsidized. Just so I'm not misunderstood: should Google fund Myriad's lawsuit, that wouldn't be objectionable per se. I wouldn't call it a conspiracy. I wouldn't consider Myriad a mere proxy because this is a company that demonstrably has a business interest in a Java license.

But for now I'm not convinced that Oracle fails to honor its FRAND commitments relating to Java. I would have to see real evidence -- not just Myriad's allegations -- to arrive at that conclusion. For example, Myriad claims that its customers were overcharged to the tune of $100 million or more, but none of those allegedly harmed customers joined Myriad in suing Oracle.

Also, there can be all sorts of technical and commercial reasons for which certain customers did business with Oracle/Sun rather than with Myriad.

Oracle's answer to Myriad's complaint will be very interesting, and when it becomes available, I'll be sure to comment on it here on this blog.

[Update] Oracle's suit against Myriad, filed on the same day, shows that Oracle believes Myriad competes unfairly by infringing the Java trademark. Oracle also asserts copyrights for its Java TCKs (Technology Compatibility Kits). According to Oracle's complaint, Myriad lost any Java licenses it had because its Master Support Agreement expired on 29 June 2010 (which automatically made Myriad's TCK license expire). Oracle says that Myriad demanded a royalty-free Java license. Apparently the parties already disagreed in the fall of 2009 on whether Myriad was entitled to a royalty-free license, and around that time Myriad stopped paying royalties that Oracle/Sun believed it still owed.

[Update 2] Four days after the two suits were filed, Myriad Group issued this statement. It reiterates the position that the Java standard-setting agreement, to which it has been a party for a while, allows what Myriad does and that Oracle makes allegedly false claims. Concerning the amount of damages, Myriad mentions that it seeks the repayment of $120 million of excessive royalties (to itself and its customers) in addition to "punitive damages". That concept exists under US law but the hurdle for that is high. Even if a court came down closer to Myriad's than Oracle's position on the question of what the license terms are or should have been, it's hard to see any behavior on Oracle's part that would be so egregious as to justify punitive damages.

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Bad week for Google's position vis-à-vis Oracle

Last week, Google's hopes of settling Oracle's Java patent suit on sweet terms were dealt important blows on two fronts.

One part of the bad news for Google is that a Federal Circuit ruling indicates software patents still can't be invalidated categorically on the grounds of "abstract" subject matter, a defense Google's answer to Oracle's amended complaint emphasized rather aggressively.

The other key development is the Apache Software Foundation's divorce from the Oracle-led Java Community Process (the Java standard-setting process). It's time to forget about possible concessions by Oracle to the open source community from which Google could indirectly benefit (since its Dalvik virtual machine is derived from a part of Apache's Harmony project).

Before I go into more detail on those latest developments, I'd like to reiterate an observation I already shared last month: unlike the other defendants in major smartphone patent cases, Google still hasn't countersued Oracle for infringement. Meanwhile, four months have passed since Oracle's lawsuit. Other defendants struck back within about two months, in some cases within one month. It's ever less likely that Google will do so. I guess it just can't.

All of this doesn't bode too well for Google and its Android mobile operating system.

101 isn't Google's lucky number

The number 101 connects Google and Oracle in two different ways. From the Googleplex in Mountain View, the fastest route to Oracle (Redwood Shores) is to take Highway 101 North. But § 101 of US patent law (35 U.S.C.) isn't the fast track to the invalidation of Oracle's Java patents that Google would like it to be, or that it would like the open source community to believe that it is.

I pointed out in a previous post that I couldn't see much of a point in Google's "abstract subject matter" defense (which it redundantly repeated), other than pandering to impressionable parts of the open source community who may be led to believe Google fights against software patents in general.

There are a few notorious disinformers out there who portray the US Supreme Court's Bilski opinion as the (potential or actual) beginning of the end for software patents. Contrary to what those propagandists claim (I doubt they even believe it themselves), that ruling (handed in June 2010) didn't do anything to turn US software patents into an endangered species. It was a decision in favor of continuity and a patent system that expands as technology evolves.

Google makes an unambiguous reference to the "abstract [...] subject matter" part of Bilski but there's no particular reason to assume that Oracle's Java patents would be non-statutory on that basis, or that such a defense would be stronger post-Bilski than it used to be pre-Bilski.

To me, the fact that Bilski didn't move the goalposts was immediately clear. I've spent a lot of time discussing substantive patent law with politicians and experts, so I can tell when a position on patent-eligible subject matter is liberal (such as Bilski) or restrictive. Steven J. Vaughan-Nichols, a markedly open-source-friendly journalist, viewed its impact essentially the same way. Bradley Kuhn, a leading free software activist, stated on this blog that "[p]ost-Bilski, it's become obvious that software patents can only be ended with legislative change." That's similar to what I had written in another follow-up to Bilski.

But anyone who believed those dreamers and disinformers instead of the more realistic and honest assessments I just mentioned would now have to grant me that I was right. The first ruling on a § 101 defense against software patents by the Federal Circuit (that's the instance right below the Supreme Court) since Bilski undoubtedly proves that software technologies continue to be patentable in the US subject to the same criteria as before.

CAFC decision on RCT v. Microsoft interprets Bilski

The United States Court of Appeals for the Federal Circuit (CAFC) heard an appeal in Research Corporation Technologies [RCT] vs. Microsoft, a case related to digital image halftoning (a set of techniques for improving display and print quality). Last Wednesday (08 December 2010), the CAFC announced its decision, a part of which disagreed with a district court's finding that "the asserted claims of [two of RCT's] patents were invalid under 35 U.S.C. § 101".

I haven't formed an opinion as to those particular patents. When I read the ruling, I was just interested in what principles it establishes for the patent-eligibility of software in general.

The CAFC points out that inventions are patent-eligigble unless expressly excluded from patentability by Congress:

Therefore, the Supreme Court has "more than once cautioned that courts ‘should not read into the patent laws limitations and conditions which the legislature has not expressed.’" Diehr, 450 U.S. at 182 (quoting Chakrabarty, 447 U.S. at 308). The Supreme Court has articulated only three exceptions to the Patent Act’s broad patent-eligibility principles: “laws of nature, physical phenomena, and abstract ideas.” Chakrabarty, 447 U.S. at 309.

The first part of that was also cited in the Bilski opinion, and what I quoted from Brad Kuhn is exactly what it means: if you want to do away with software patents, talk to politicians, not to judges. Of the three exceptions stated in the second part of the above quote, the first two are irrelevant to software patent issues and only the last one -- "abstract ideas" -- might play a role in a case like RCT v. Microsoft, or Oracle v. Google for that matter.

The CAFC then notes that the Supreme Court threw out its more restrictive approach to the Bilski patent application:

Indeed, the Supreme Court re-cently emphasized this statutory framework and faulted this court’s “machine or transformation” test for eligibility as nonstatutory. Bilski, 130 S. Ct. at 3227.

Therefore, the CAFC "perceives nothing abstract in the subject matter of the processes claimed in the [relevant] patents" and states that "[t]he invention presents functional and palpable applications in the field of computer technology."

That's the difference between patenting a mathematical algorithm and patenting a way to apply such an algorithm. Those who claim that software is mathematics and therefore too abstract to be patented don't take into consideration that such patents may be infringed by software that implements certain algorithms, but that is intellectually different from monopolizing mathematics per se:

These algorithms and formulas, even though admittedly a significant part of the claimed combination, do not bring this invention even close to abstractness that would override the statutory categories and context. The Supreme Court has already made abundantly clear that inventions incorporating and relying upon even "a well known mathematical equation" do not lose eligibility because "several steps of the process [use that] mathematical equation." Diehr, 450 U.S. at 185.

Again, I can't comment on those RCT patents, but I have looked at the patents Oracle asserts against Google and in my opinion, those Java patents aren't any more abstract than RCT's patents or, for example, all of the Google patents I've seen so far. Digital imaging is an operation performed by a computer processor on data stored in memory, possibly a storage device. Those Java patents involve the same hardware components except that they don't make explicit reference to output devices. However, one could also implement digital halftoning in Java, which shows that there isn't an obvious way to draw a line in the sand between RCT's and Oracle's patents.

In its attempt to take down Oracle's Java patents, Google will have to look for other arguments (such as prior art) than the subject matter defense it stressed so prominently in its recent court filing.

Apache's divorce from Oracle's Java Community Process is final

Probably knowing that it's very unlikely to do away with all Oracle patents and to prove that it doesn't infringe the valid ones, Google has strongly played the open source Java card in its public reaction to Oracle's patent infringement suit as well as the answers it filed with the court. Google would like the court to conclude that Oracle's open source commitments related to Java allow Google to use those patents anyway.

I can't see a convincing theory for that, but what's obvious is that Google hopes to put pressure on Oracle via the open source community.

Even if that wouldn't ever change the legal facts concerning what Google has done so far, Google may hope that under enough public pressure Oracle would be more likely to let Google carry on with its Dalvik virtual machine. I said before (at the end of this post) that I believe Google is barking up the wrong tree by trying to pressure Oracle on that basis. Oracle's support for open source and "open standards" ends where its business interests begin. That impression was just affirmed three weeks ago when I listened to Oracle's VP for Standards Strategy and Architecture, Don Deutsch, at a standardization conference.

Google might have hoped that Oracle would grant a Java license to the Apache Software Foundation's Harmony project. Since Google's Dalvik virtual machine is derived from a part of the Harmony code, Google would have been, potentially, an indirect beneficiary of such a license. This was like the reverse concept of having a carpet pulled off from under one's feet. Google hoped to have a missing carpet inserted under its feet and gain a legal advantage at least with a view to the future. But as I expected, Oracle stands firm.

On Thursday (09 December 2010) the ASF announced its resignation from the JCP Executive Committee -- the steering body of the Java standards-setting process. Over a disagreement as to whether Oracle had legal obligations to grant a certain Java-related license to the Harmony project, the ASF wanted to (at least temporarily) block all further progress concerning Java. But only Apache, Google and an individual member named Tim Peierls voted that way, while eWEEK reported that six members voted unconditionally in favor of Oracle's proposal (HP, Ericsson, Fujitsu, VMware, Intel, and Oracle itself) and six other members (SAP, IBM, Eclipse, Red Hat, Credit Suisse, Werner Keil) disliked licensing restrictions but voted for Oracle.

I read a rumor on the Internet that Red Hat was actively discouraging other members from a vote that would amount to "shilling for Google". A statement Red Hat gave to internetnews.com certainly indicates the Linux distributor's allegiance to Oracle. That's not suprising since IBM supports Oracle, and Red Hat follows IBM on pretty much every occasion.

The Apache Software Foundation risks getting sued

After Apache and Google lost the vote, TheRegister already expected the ASF's resignation. Oracle didn't seem to be surprised either. Its call on the ASF to "reconsider its position" doesn't mean that Oracle holds out rosy prospects to Apache and Google: it just shows that Oracle believes that the ASF will sooner or later have to yield and live with the fact that Oracle wants to retain some control over the licensing of Java and, particularly, Java-related patents. It's not an offer to hold peace talks and work out a compromise. It means that the ASF can have peace only on Oracle's terms.

If Apache doesn't accept Oracle's terms, I wouldn't rule out the possibility of Oracle suing the ASF over its Harmony project at some point. Doing so would merely be consistent with Oracle's infringement suit against Google. Right now, Oracle puts on a friendly face, seemingly extending an olive branch. But who knows for how long. At some point Oracle may conclude that the ASF will continue its collision course forever unless Oracle asserts its rights.

These circumstances limit the options Google would have should it be found to infringe Oracle's patents. The indirect Apache road to salvation appears to be blocked for the foreseeable future. Replacing Dalvik with another infringing technology wouldn't make sense either. However, most (if not all) Android applications have been written in Java, and Google must find a way forward for its third-party app developers. It can't just tell them that all of their applications can no longer be legally executed on Android and that they'd have to rewrite them with a completely different development system.

The GPL avenue wouldn't work either. While Google could theoretically take Oracle's GPL'd Java code (OpenJDK and/or parts of phoneME) and build some new GPL'd software capable of executing existing Android apps, it has clearly been Google's approach so far to eschew the GPL and its "copyleft" principle according to which anything derived from or incorporating GPL'd code must be GPL'd as well.

If Google had to do that, it might help its app developers temporarily but at the expense of creating major complications for the business strategies of its key partners among device makers. Those strategies are centered around closed-source, proprietary extensions to Android, which effectively make the platform "open in name only".

This is Google's dilemma: it has to work out things with Oracle in a way that Android app developers and Android device makers can live with. If Oracle's legal position is indeed very strong, if Oracle's intentions are about control as opposed to just money and if Google continues to be unable to countersue for infringement of any of its own patents, then there may be no solution that averts devastating damage to the Android ecosystem.

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FOSS, focus, philosophy: setting the record straight

Yesterday, in a report on my visualization of Apple's patent disputes with HTC and Motorola, Fortune.CNN.com made the following reference to the title of this blog:

"FOSS, by the way, stands for Free and Open Source Software, which may suggest a bias on Mueller's part. If so, we've never detected it in any of his reports."

In other words, my analysis doesn't come across as "FOSSy". It's true that I try hard not to be ideological about the intellectual property issues affecting the high tech industry. I'm always grateful for recognition of that effort, in public and in private.

But I can't deny that I often find myself misunderstood in different ways. On one end of the spectrum, there are a few who believe that this is an extension of the NoSoftwarePatents campaign I used to run years ago. On the other end, there's a certain number of people (greater than the first group) who misperceive or mischaracterize my activities as an attempt to speak on behalf of the open source community at large as an "astroturfer", or worse than that, suspect a divisive agenda. None of that is true.

Not in the name of open source

Most importantly, let me make it very clear -- right upfront -- that I never claimed or implied to be (or to be eligible as) an open source community leader or spokesman. Until I say otherwise, I don't have a mandate to represent anyone but myself.

I'm not trying to create a movement or subcommunity, nor the appearance of one. When some speculate about whether "the community follows" me, I can only shake my head because that's not my objective (it was a goal during the NoSoftwarePatents campaign, but not now). If that were the objective, I would have to do many things differently.

I just try to create unique, interesting, relevant and timely content, and to be thought-provoking. This blog gets read by lots of professionals and quoted in major media, so it delivers something others don't. That is, however, separate from knowing very well that on some important issues my views are not shared by a majority of FOSS community members. However, I believe that an increasing number of people will be interested in that perspective even if it isn't necessarily their own.

As a matter of principle, I never want to pretend to be something that I'm not, whether it generates publicity or support in some respects or negative associations in others. So I'll say it again, loud and clear: this blog is not an organ of the free and open source software community.

Holistic, in-depth, rapid and at times irreverent analysis

In an effort to counter misperceptions concerning my role, I updated the profile box (right-hand column), now introducing myself as "an award-winning intellectual property activist with 25 years of software industry expertise spanning across different market segments (games, education, productivity and infrastructure software), diverse business models (proprietary software, free and open source software, advertising- and subscription-based online services) and a variety of technical and commercial areas of responsibility."

Compared to many other blogs commenting on similar topics, I try to offer a particularly holistic perspective taking the technical, commercial, political and legal aspects of these issues into consideration -- and to provide understandable explanations.

Besides that, I often produce my analysis quicker than many others, and I dare to contradict or criticize persons and organizations whom many others revere unconditionally.

FOSS as a competitive force and business model rather than a philosophy

Some misunderstood my use of the term "FOSS" as a statement of strict adherence to Richard Stallman's free software values. Actually, the only reason for which I chose it was to recognize what RMS and his followers achieved. Saying "FOSS" instead of just "open source" is more efficient than placing "GNU" in front of "Linux".

I've been in this industry for 25 years, most of the time in closed source (such as when I marketed some Blizzard Entertainment games in Central Europe). For three years (2001-2004) I advised MySQL's CEO. It was a part-time capacity (about three days per month). I was also a small shareholder until the sale to Sun in 2008.

My NoSoftwarePatents campaign received most of its support from open source people and companies, and open source juries nominated it for awards. But when I gave speeches during that campaign I pointed out that my own software development was closed-source (.NET-based, in fact). The campaign website listed nine "dangers" due to software patents. The patent threat to "Linux & Open Source" was the first item, but there were eight others that weren't specifically related to open source.

In late 2009 and early 2010 I fought hard against Oracle's acquisition of MySQL. I worked with Michael 'Monty' Widenius, MySQL's founder, and his company Monty Program Ab on that effort. At the time I was, for sure, an open source advocate. But it was a project, an episode.

To me, open source is important primarily as a competitive force. In a position paper I wrote as part of my work for Monty Program, I made the case for open source as a competitive factor. I didn't claim that it's an inherently superior production model or the only ethically acceptable one.

I created my Apple vs. Android diagrams with OpenOffice Draw, and my current mobile phone is an Android-based Samsung Galaxy, but Outlook has been my email client for many years. Actually, most computer users are just like that.

In addition, I look at this from a competition angle, and even if I use proprietary software for a certain purpose, I want open source to exert competitive pressure on it. That's why I care about FOSS being competitive, which is admittedly a rather utilitarian view. It's the perspective I had in mind when I started this "FOSS Patents" blog. Over time my focus has shifted anyway. 7 out of my 10 most recent postings covered smartphone patent disputes...

When I report on patent litigation, I shut out all political considerations and focus strictly on the legal processes, the technical scope of the asserted patents and the commercial framework, and just like everybody else I'm interested in clues as to which litigant may have the upper hand and how a dispute might impact vendors, consumers and application developers.

I guess war correspondents find themselves in a similar situation, especially if they participated in peace demonstrations earlier on.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

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