Yesterday, Microsoft announced that it had successfully formed a patent protection agreement with ODM Compal Electronics, whereby Compal pays Microsoft a royalty for each device it develops for running Android or Chrome OS. For those who have not come across the term ODM before, ODMs are Original Design Manufacturers who both design and produce products on behalf of other firms, who later rebrand the product.
Microsoft has claimed that all Android devices infringe on its patents in some shape or form, with recent claims relating to synching of e-mail, calendar, contacts and notification of battery or signal level changes to applications; though we suspect there are plenty of other, even more ridiculously simple software patents thrown into the mix.
What makes yesterday’s announcement an important one for Microsoft is it now has over half of the ODM market as licensees in relation to Android products. It’s estimated that ODMs shell out $5 per device in licencing fees and that it’s also estimated Microsoft will make $444 million during 2012 from its Android patent protection deals. It’s also suspected that Microsoft offers “discounts” if ODMs also adopt Windows Mobile in some of their devices.
The recent Google purchase of Motorola was not only due to patent battles with Apple, which were the most widely reported factor, but also to defend against Microsoft’s claims. Microsoft sued Motorola last year as it refused to purchase patent protection for its Android devices, with Motorola launching a counter-claim relating to similar technology and more in almost all of Microsoft’s key products. Though the outcome is yet to be determined, if Motorola’s claims are legitimate, this would place Motorola in a strong position within the patent wars. What’s more is that Microsoft is yet to verify the legitimacy of its own claims in court and has instead relied on intimidation to form agreements with ODMs.
Honestly, we’re not that impressed with Microsoft’s actions. Aside from turning to extortion as its own Window Mobile platform fails to perform, so far it has only been able to raise claims in relation to basic functional features in areas that have only a limited set of practical implementations (how many ways are there to fetch an e-mail?). However, the recent agreement with Compal could go against Motorola, who, whilst reducing its reliance over the past few years, is still a major client of Compal’s communications subsidiary.
