Apple pulls for Microsoft to push off Google
(MoneyWatch) COMMENTARY The tech industry makes for an interesting set of constantly changing bedfellows at normal times. The partner swapping has only become even more intense because of the hot and heavy patent wars. Culmination of irony, it seems that Apple (AAPL), Nokia (NOK), Intel (INTC), HP (HPQ), Cisco (CSCO), and a set of congressional representatives are lobbying the International Trade Commission on behalf of Microsoft (MSFT) and against Google (GOOG).
Not that Apple and Microsoft working together is unheard of. The two frenemy corporations have competed and cooperated for decades. And the other companies all regularly work with Microsoft. But this wagon circling, particularly with the participation of members of Congress, is extreme. That's because Google, through Motorola, which it acquired, have got much of high tech in a panic. Motorola is potentially close to getting the ITC to ban the import of Xbox consoles over infringement of some basic wireless patents. If the company can do that, Apple's iPhone and iPad, Nokia phones, Cisco wireless equipment, many products from HP, and resulting Intel chip sales could be in some serious trouble.
The mobile patent space has turned into a flurry of almost everyone suing each other. Among other fronts, both Apple and Microsoft had targeted Motorola, which was seeing success basing phones on Google's Android operating system, as a way to indirectly attack the search giant.
Although Motorola had seen difficult financial times prior to the Google acquisition, the company has a wealth of patents that are fundamental to modern telecommunications. Many of these patents have been included in international technical standards. Typically, standards associations demand that, to incorporate technology into a standard, patent owners must make license available under fair, reasonable, and non-discriminatory (so-called FRAND) terms and prices.
When you have patents needed by competitors that sue you, especially if you've been losing money for years, it's always tempting to ratchet up license fees to get an upper hand in negotiation. And to make money, of course. Microsoft has accused Motorola of charging too much for patents that cover Wi-Fi and video streaming and is suing them in federal court.
Working the ITC
At the same time, Motorola has moved ahead with a lawsuit it filed in 2010 at the ITC. The agency has the power to prohibit the importation of products that infringe U.S. patents. An administrative judge has recommended that the ITC ban Xbox consoles from entering U.S. borders. Although not a final action -- the ITC has to vote on the recommendation -- it could cause a lot of trouble for Microsoft which, as many other tech companies do, has its products manufactured in Asia.
Apple has claimed that by suing Microsoft, Motorola seeks an end run around FRAND provisions. And that could get sticky. Apple just lost out on getting damages from Motorola in a U.S. patent dispute and, more importantly, the mobile device giant lacks the portfolio of basic standards patents it would need to completely undermine Motorola in the same way.
Should Motorola prevail, it will significantly turn the tables for Google, which would then be able to exert pressure in a way it never could before. The result could be an enforced live-and-let-live approach to mobile -- which, come to think about it, might not be such a bad thing after all.
Image: RGBStock.com user Copta
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