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ITC Determines That MS is Not Acting Anti-competitively in B&N/Android Patent Licensing Case

imageThis is only a big deal because had MS lost it would have been a massive loss. That and it means that the fees that MS is charging and their methodology for seeking royalties from manufacturers of Android devices is permissible. Foss Patents notes (in part but read it in full for a lot more details):

  • Barnes & Noble bet heavily on its patent misuse defense. It stressed this one by making it its First Affirmative Defense, and it invested heavily. It even brought former Microsoft antitrust foe David Boies on board. Based on today’s order, Mr. Boies is very unlikely to get to complete any unfinished business he may have with Microsoft. More importantly, it’s hard to see how Barnes & Noble can gain serious leverage against Microsoft. It doesn’t have any such thing as a significant patent portfolio that it could use. Playing the "antitrust" card was its only chance to bring any counterclaims at all.

  • Barnes & Noble also complained to the United States Department of Justice, an antitrust regulator, about Microsoft’s patent assertions against Android. Like the DoJ, the ITC is a U.S. government agency. If Barnes & Noble failed to meet the ITC’s requirements for a valid legal theory and for evidentiary support, it’s also unlikely to impress competition enforcers. At this stage, Barnes & Noble was allowed to conduct wide-ranging discovery of Microsoft. Even Microsoft CEO Steve Ballmer had to testify at some point (though he wouldn’t have had to appear personally at next week’s trial anyway). If Barnes & Noble can’t state a claim that the ITC considers credible after a large-scale fishing expedition, it just doesn’t seem to have a case at all.

  • As a result, Microsoft’s intellectual strategy has, essentially, received a stamp of approval by a government agency. While Barnes & Noble claimed that Microsoft was seeking to eliminate Android as a competitive threat and brought all sorts of conspiracy theories, it’s a fact that Microsoft has successfully concluded patent license agreements covering more than 70% of all Android devices sold in the U.S. market, a level of acceptance that wouldn’t be possible if Microsoft’s terms were as unreasonable as Barnes & Noble alleged. The commercial success of Microsoft’s Android patent licensing program and the wholesale dismissal of Barnes & Noble’s accusations are a meaningful combination. By contrast, Barnes & Noble’s claims now look like bogus borne out of desperation and possibly other emotions.


End result? Expect Microsoft’s march to get all Android partners in line to continue unaffected, if not stronger.

via Seattle Times