Will US Patent laws strange Android?

In recent days there the issue of the US patent obtained by Apple relating to the multi-touch functionality has reared it’s head on the Android development lists, and the discussions have left me deeply concerned about whether Android will ever become a serious global player in the mobile OS market.

The discussion started rolling when a patch to add multi-touch functionality on Android was posted on the android-platform mailing list, and ran in parallel another list directly discussing the impact the patent may have, but surprisingly ended up with a post from a Google employee saying that patents should not be discussed on any of the google hosted android lists, and this was further expanded by another Google employee saying that it was “because of legal repercussions”, and “it is simply best not to know about them”.

This to me seems bizarre. Firstly I was always taught that in law ignorance is not a valid defence and you can’t claim immunity from prosecution just because you didn’t know about something. Secondly, and more importantly, in a vast majority of the world software patents are not enforceable. In fact in 2005 an attempt to introduce them in the EU was voted down by 648 votes to 14, that’s right, only 2% of the delegates were in favour of them, so you can bet your money that the Symbian foundation isn’t going to limit functionality in it’s OS just because there is a US patent, and if you expand this to the middle east you then have Samsung, LG, and a host of others for whom software patents are not even a consideration for their non-US ‘phones.

Early this month a US company which is well known for trying to enforce US patents took a shot at Nokia, RIM, and Palm, but all it could do was apply for a block on US imports of those phones, so the rest of the world will still gets these features whatever happens, the only people losing out are consumers in the US.

So now I can see the paths the Android team can follow;

The first leads down a road where it steers clear of any functionality which may be covered by a US patent and heads toward Android being a niche OS which only gains market share in the US.

The second is where discussion of patents is barred and the Open Handset Alliance, Google, et al get sued on a regular basis in the US. This path heads toward Androids resources being wasted on fighting patent laws and the mayhem of lawyers controlling the development of the OS.

The third is where patents are openly discussed and US-only versions of Android are released which have the patented functionality removed, leaving the rest of the world with a competitive mobile OS.

To me the third path looks the way to go, but Google is at the wheel, so as a passenger I’m going to have to see where we end up.

7 thoughts on “Will US Patent laws strange Android?

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  1. “Firstly I was always taught that in law ignorance is not a valid defence and you can’t claim immunity from prosecution just because you didn’t know about something.”

    Willful infringement of US patents comes with a “treble damages” penalty.

    “Secondly, and more importantly, in a vast majority of the world software patents are not enforceable.”

    Which is only relevant for firms with zero US presence. Most major electronics manufacturers have a US presence, even if they are not based in the US.

    “so you can bet your money that the Symbian foundation isn’t going to limit functionality in it’s OS just because there is a US patent”

    If members of the Symbian Foundation have a US presence, they can be sued over US patents, like it or not. It is possible the Foundation will provide sufficient of a shield to protect their business interests, but it might not. That will be up to the courts to decide, not you, and not me.

    “and if you expand this to the middle east you then have Samsung, LG, and a host of others for whom software patents are not even a consideration for their non-US ‘phones.”

    I know for a fact that Samsung has US-based operations; not sure about LG. Hence, the point still stands — they can be sued over US patents if the patent holder so chooses.

    “but all it could do was apply for a block on US imports of those phones”

    Just because that is all they have done to date does not mean that is all they will do for all time.

    “So now I can see the paths the Android team can follow;”

    The ones you cite are a small percentage of the possible paths.

  2. Many global companies have seperate US registered companies to handle their US affairs which they ensure meet US laws whilst allowing their global operations to not be restricted by US patents and the like.

    Nokia has Nokia Inc. (See https://www.nokiausa.com/A4411012), Samsung have Samsung America Inc. (http://www.samsungamerica.com/), and it’s a common procedure to ensure that the US Patent system does not interfere with global operations.

    The US court system has neither the juristiction nor the enforcement mechanisms to award and apply a penalty based on US laws against a non-US citizen or organisations conducting business outside the US. To say that is like saying that no company should ever deal with Cuba because the US wants a trade embargo, it just isn’t the way the world works.

    No matter what Saxon do in the end, they still will not be able to stop Nokia, RIM, and Palm selling those devices to non-US consumers, so if Android ties itself to the US patent system it will always look like a poor choice compared to other ‘phones offering similar functionality.

  3. “and it’s a common procedure to ensure that the US Patent system does not interfere with global operations. ”

    Whether a patent holder wins a $10B lawsuit against Samsung or a $10B lawsuit against Samsung America, such a judgment will have similar financial effects.

    “Android ties itself to the US patent system it will always look like a poor choice compared to other ‘phones offering similar functionality.”

    There are a myriad of ways for the Open Handset Alliance to deal with patents. Some of the options will result in the patented technology being available for handsets. None of them involve a random bloke from the UK (or from the eastern US, for that matter) deciding what is and is not proper strategy for the Alliance.

    You are, of course, welcome to fork Android (Aldroid?) and chart your own course separate from the Alliance. You can ban US participation and take the open source patents-be-damned approach. This is one of the freedoms granted to you by Android being open source. And, in the forked project, you, being the project lead, get to define your own rules for participation.

    “No matter what Saxon do in the end, they still will not be able to stop Nokia, RIM, and Palm selling those devices to non-US consumers”

    The patent in question is not a software patent — leastways, any attorney worth her salt can make that argument, and it might just hold up. If the US patent holder obtains patents in other jurisdictions, they may well hold a big enough club to get injunctions, judgments, or capitulation. Even if the patent remains “merely” a US patent, the US market is large enough that really only Nokia would be in position to ignore the patent, since the US represents a small percentage of Nokia’s sales.

    But those are my opinions. Neither you nor I are qualified to tell Nokia, Palm, or RIM what to do.

    In the end, all anyone has asked is that you not discuss patents on official Android discussion lists. You are welcome to your opinions regarding strategy, you are welcome to express those opinions, you are welcome to invite discussion of those opinions, and you are welcome to take actions (e.g., fork) based on those opinions. Just keep those discussions away from the official Android areas, since that’s what the project leads have asked. It’s a big Internet, so I would have to imagine there are places where you can theorize about patents without affecting the employment of core Android team members. Such as, say, your blog.

  4. “Whether a patent holder wins a $10B lawsuit against Samsung or a $10B lawsuit against Samsung America, such a judgment will have similar financial effects.”

    The effect it has can be contained solely to the US company if so desired. If an award is made against a company that it can’t affort to pay one option is to shut it down, so if a $10B judgement went against Samsung America and Samsung felt it represented an unjustifiable cost for selling in the US market then Samsung could let the US company go Chapter 11 and not have to pay a penny.

    I’ve worked for at least one company that shut down it’s US operations yet the parent company which was registered in the UK carried on trading, selling to US companies, and still had a valuation equivalent to tens of millions of dollars.

    As I said before, it’s standard practice to have a separate US company handle your US business so that should the laws and patents system in the US make running the business uneconomic you can shut it down knowing the parent company is isolated against US based problems.

    “None of them involve a random bloke from the UK (or from the eastern US, for that matter) deciding what is and is not proper strategy for the Alliance…”

    Which is why, at no point, have I said “They must do this!!!”. The original post clearly says on the last line “….Google is at the wheel, so as a passenger I’m going to have to see where we end up.”

    What I’ve done is voice my views and opinions, which, when you have a blanket ban on discussions relating to patents, is something that you restrict.

    “You are, of course, welcome to fork Android (Aldroid?) and chart your own course separate from the Alliance”

    Forking is legally possible, but why on earth would I?, Any consumer has the option to fork Android to add multi-touch or anything else, but why spend the time and effort doing that when plenty of other platforms not hindered by US patents are available?

    I suspect a vast majority of developers would, like myself, not fork Android to add the cool features of another OS, but instead just buy and use a product running the other OS, which results in lost Android sales, users, and developers, and that is never a good thing.

    “the US market is large enough that really only Nokia would be in position to ignore the patent”

    That is so far from the truth it’s up there with statements like; The US is the only market where you can make money, so you must sell in the US.

    There are numerous companies around the world which have no interest in dealing in the US market and so can ignore US patents.

    The IMF figures for 2007 show the EU has a 20% larger GDP than the US and so can support many large companies who never have to expose themselves to the problems of the US Market.

    You also only need to go to China or Japan to see some amazing products from companies who have no interest in shipping their products outside of their domestic markets.

    The US is only 25% of the worlds GDP, and that leaves 75% which companies can tap into without worrying about US patents, and if Android is looking to claim some of that 75% it’s going to have to compete with products not restricted by US laws.

  5. “Which is why, at no point, have I said “They must do this!!!””

    You kept talking about patents on the list, even after you were asked to stop. By those actions, you said “They must do this!!!” where “this” is “read messages about patents that you were explicitly requested to stop posting”.

    “Any consumer has the option to fork Android to add multi-touch or anything else, but why spend the time and effort doing that when plenty of other platforms not hindered by US patents are available?”

    None, at present, are open source, so you are at the mercies of their respective creators as to whether or not they get multitouch. This is no different than it is with Android.

    Moreover, as I pointed out in my previous comment, just because people should not discuss patents on a certain mailing list does not mean that Android will not, by one means or another, use those patented technologies, either by way of patent license, “mutually assured destruction” by competing patent portfolios, or other avenues.

    “That is so far from the truth it’s up there with statements like; The US is the only market where you can make money, so you must sell in the US.”

    In your previous comment, you cited three companies: Palm, RIM, and Nokia. I replied with comments regarding three companies: Palm, RIM, and Nokia. Of those three, Nokia has far and away the smallest US presence.

    From the Palm, Inc. SEC 10-Q filing from earlier this month:

    “International revenues were approximately 25% of worldwide revenues for the three months ended November 30, 2008, compared with approximately 27% for the three months ended November 30, 2007. ”

    Hence, Palm sells 75% to the US, 25% outside the US. Ergo, Palm is not in strategic position to withstand products being blocked by US patents.

    Similarly, according to RIM’s similar filings in SEDAR, for the nine months ending 2008-11-29, they sold 63% to the US, 36% outside of the US. Hence, they too are not in position to lose their US sales.

    Could either firm grow their international sales to make up for it? Sure. Can they do so at the drop of a hat, considering they haven’t done so in their firms’ histories? Probably not.

    Hence, RIM and Palm are likely to take US patents very seriously.

    While I do not have ready access to Nokia’s filings, I’ll be stunned if they have a significant US presence, since (AFAIK) no Nokia handsets are sold by US wireless carriers. Hence, of the three, Nokia is far and away the firm most able to ignore a US patent. Between the Symbian Foundation and US subsidiaries, maybe they’ll try ignoring the patent. You don’t know. I don’t know. Heck, it’s possible Nokia doesn’t know yet.

    I’d do the same analysis for Windows Mobile, but it’ll take way too long to tease out an international sales percentage from Microsoft’s massive SEC filings.

    To sum up:

    — US patents have greater clout with some mobile OS providers than others.

    — Whether Al Sutton or Mark Murphy can talk about patents on-list has little to do with whether Android-powered devices will ever incorporate patented technologies.

  6. “You kept talking about patents on the list, even after you were asked to stop. By those actions, you said “They must do this!!!” where “this” is “read messages about patents that you were explicitly requested to stop posting”.”

    I was asked not to discuss specific patents and I haven’t since I was asked.

    What I have continued to discuss is how patents in general will affect Android development, and one of Googles employees is still engaging in this discussion, but even in that thread I’ve suggested moving the discussion over here.

    “None, at present, are open source, so you are at the mercies of their respective creators as to whether or not they get multitouch. This is no different than it is with Android.”

    The reason it won’t be in the closed source OSes will be a choice by the companies developing them. The reason it won’t be in Android will be laws that are only applicable in one country even if a majority of the developers working on the project want to implement it.

    When I buy closed source I accept I have little or no control over what goes into the product. When I chose a solution labelling itself as “open source” I don’t expect to see contributed code rejected based on the laws of one country and discussions of features cut dead because of those laws.

    “… Of those three, Nokia has far and away the smallest US presence.”

    You can get some 2007 Nokia figures from http://www.intomobile.com/2008/01/24/nokia-officially-hits-40-global-market-share-4371-million-devices-shipped-in-2007.html and they show the US can be ignored.

    In 2007 Nokia had 40.4% of the global market. If you take out it’s US sales (which are less than 5% of it’s total sales) and add all of them to it’s nearest competitor (Samsung with 14.9%), it is still holds the largest share of the global mobile phone market a huge margin.

    If you want to focus on smartphones, you can look at http://compoundsemiconductor.net/blog/2008/12/global_smartphone_sales_growth.html for Q3 sales in 2008.

    Again, Nokia is top by a looong way with 42.2% of market share, which is more than RIM, Apple, HTC, and Sharp all combined (Palm don’t make it onto the list) despite RIM nearly doubling it’s sales and Apple increasing them by over 300%.

    To sum up:

    – US patents and the US market can be ignored when building a globally relevant mobile ‘phone OS.

    – If Android ties itself to the US patent system and limits functionality based on it then it’s unlikley offer the functionality consumers want and can get elsewhere.

    And as a bonus point

    – Discussing patents on-list allows a mature approach to handling them to be formed as opposed to ignoring them and potentially having to remove functionality when US based legal issues come up.

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