updated 09:40 am EDT, Mon October 4, 2010
Microsoft says entitled to patent fees on Android
Microsoft chief Steve Ballmer in an interview this weekend asserted that every Android phone maker would have to pay Microsoft. When asked how Microsoft could compete with Windows Phone 7 when Android is free to license, Ballmer argued that it wasn't free and required royalty payouts to Microsoft to use. He pointed to the HTC deal as supporting evidence.
The executive didn't comment on the just launched Motorola lawsuit, which is taking the American phone designer to task for similar issues. Unlike HTC, Motorola has so far insisted that it's not violating patents and has pointed to its own patent portfolio for support. Microsoft has never had its Android-related patent claims tested in court.
A campaign to collect fees from Android could jeopardize its use worldwide, particularly among smaller manufacturers that might not have the resources to pay for a license on every device sold. Microsoft has so far chosen to avoid suing Google itself and is already suspected by many of trying to target companies that have easily quantifiable device figures.
The approach of pressuring companies into licenses or filing lawsuits mirrors an earlier strategy taken for scaring companies away from Linux, where Microsoft made licensing deals with companies using or developing Linux distributions but without having those patents challenged. As with the Linux cases, Android royalties would let Microsoft profit even as it loses market share.
Competition with free OS licenses has routinely been a sticking point for Microsoft. The company was initially in the minority in a Linux-dominated netbook world until it price dumped Windows XP to where it commanded just a $15 premium over Linux. Combined with a more familiar interface, the lower price helped Windows become the majority in netbooks and only just lately faced a setback when Apple launched the iPad and helped decrease netbook sales.