Barnes & Noble’s response to Microsoft’s lawsuit has opened a revealing window into the company’s patent attack on Android. The new filing describes Microsoft’s plan to “dominate” the Android ecosystem, and says that its plan to coordinate its patent attacks with Nokia (NYSE: NOK) is “per se illegal under the antitrust laws.”
Highlights of the filing (embedded below):
» The licensing fees Microsoft (NSDQ: MSFT) believes it is owed on each Android device isn’t disclosed exactly, but it’s huge. The licensing fee for the Nook is “shockingly high,” write B&N lawyers, and the royalty for the Nook Color is more than twice that amount. Remarkably, the demanded fees are higher than what Microsoft charges for its entire Windows Phone 7 operating system.
» Microsoft tried very hard to keep these discussions under wraps, insisting every step of the way that Barnes & Noble (NYSE: BKS) had to sign a wide-ranging non-disclosure agreement before it would show any claim charts; but B&N refused to sign. Ultimately B&N signed a much narrower agreement, and the patent “claim charts” that Microsoft showed revealed nothing that wasn’t public already.
» B&N says Microsoft’s patents are trivial. Microsoft is saying its patent rights cover the most popular mobile operating system in the world, but the patents it’s bringing into the game aren’t much to shout about. Two of the patents, for example, “deal with nothing more than compatibility between file names” between old and newer operating systems, write B&N lawyers. “This is of no importance to either the Nook or Nook Color products.” Another patents describes a browser that displays background images after displaying text. While that may have solved an internet browser problem that existed in 1996, it has nothing to do with the operation of the Nook.
» Microsoft has threatened other companies with these patents, and both HTC and Amazon (NSDQ: AMZN) have paid Microsoft to license them. The licenses don’t just involve payment, either; B&N says one of the reasons it’s fighting back is because “the proposed license would have severely limited, restricted, and in some cases entirely eliminated” B&N’s ability to upgrade and improve its Nook design.
The document that B&N filed-an answer to the Microsoft’s complaint-is a standard part of litigation, and they usually don’t contain much interesting information. B&N’s filing is strongly worded and quite unusual. It suggests that the company will be-appropriately-fighting hard against this lawsuit, which is where Microsoft has made what may be its biggest patent gamble yet.
Microsoft v. Barnes & Noble, et al.
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