Encourage Innovation or Kill Competition? Microsoft and Apple vs Google Android

“…Microsoft and Apple have always been at each other’s throats, so when they get into bed together you have to start wondering what’s going on…”- David Drummond, Senior VP and Chief Legal Officer, Google. Mr. Drummond stunned the world with this accusation late 3rd August 2011 in the official Google blog. The Android operating system took the mobile-phone market by storm as its latest version(Honeycomb 3. 0) wowed the smart-phone users with out-of-this-world features like multi-tasking, multi-touch interface, over the air updates, open source, etc.

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Taken over by Google in 2005, and with 550,000 devices being activated every single day currently, Android seems to be the next big thing for smart-phones. But recent events involving the “patents war” and the blame-game being played out by the three behemoths, namely Google, Microsoft and Apple have brought a new issue to the forefront: are patents instruments to encourage innovation or to kill competition? Google claims that the recent acquisition of the wireless giant Nortel’s patent portfolio by an Apple-Microsoft consortium was “bogus” as a $1million deal was finally made at $4. million. Google was invited to bid on Nortel’s patent portfolio in early July but was outbid by the consortium. It has requested the US Department of Justice( DOJ) to investigate whether this was done to achieve anti-competitive means. It is also working on strengthening its own patent portfolio to be able to combat competitive threats in the future. The DOJ has already asked Microsoft to sell the patents it had bought earlier and make them open-source. Earlier, Oracle sued Google for using Java in Android.

Microsoft and Apple have both sued Motorola, a licensee of Android. Another licensee, HTC has had to pay huge royalties to Apple for a twin 4 patent infringement. Implication: This will help to necessitate and encourage round-the-clock innovation in the open-source community. Also the Android suppliers and users will not have to suffer due to licensing fees and end-user costs being driven up by competitors of Android holding all patents. Google has to keep innovating for Android so as to maintain its competitive edge.

The fact that Android is offered for free and Microsoft has to charge a licensing fee for its Windows Phone 7 has not gone down well with Android competitors and that has led to the latter scrambling to acquire patents in the field of wireless, wireless 4G, optical, voice, internet, etc to gain long-term benefits and also suing Android as well as its partners for using the competitors’ patented technology. Whether acquisition of patents and lawsuits for their infringement can yield long term benefits for their holders or undermine innovation in the open-source community remains to be seen.


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