Summary: HTC says there is no financial impact to the settlement, but Microsoft boosters say that HTC pays Apple for Android; Techrights investigates what people are saying and where the claims come from
As noted in the previous post, lawyers say that HTC pays Apple per phone sold following the secret settlement and they claim to know the cost. This speculation about Apple getting a patent tax (echoed by John Koetsier in this case) has Groklaw say: “Does that sound fair to you? Sound like the US patent system is working as it should?
“Folks who argue that the US patent system works beautifully for the US economy need to think about the future, then. How beautifully will the system work when other countries make it impossible for US companies to bring new products to market in the US? Think that could never happen? Look at the Apple-Microsoft-Nokia attack on Android. Now put non-US companies in attack mode and against a US product.”
Other sources seem to suggest Apple has retreated. TechDirt writes “HTC And Apple Settle Patent Dispute; Perhaps Tim Cook Realizes Patent Fights Are A Waste” and formal reports say nothing about a tax. Why? Because they do fact-checking. One Android site says:
While the specific details of the agreement are under wraps, press is being told by Jeff Grdon, representative for HTC, that HTC “does not expect this license agreement to have any adverse material impact on the financials of the company” – read as: HTC won’t break the bank in the settlement.
So no losses, correct?
Here is more speculation:
What is Google’s real incentive in seeding the Android mobile OS in the global market? Is it to make money from the sale of Android-based handsets and tablets? Certainly, that’s part of Google’s strategy. After all, through its Motorola Mobility acquisition, Google is a player in the smartphone and tablet markets.
Recently, there have been several reports about how Apple’s recent settlement with Taiwan’s HTC could mean that Apple and Microsoft make more from Android going forward than Google does. Apple and HTC have a cross-licensing deal that some are saying could mean Apple collects $6 to $8 per Android phone sold. The truth is, though, that Google’s real benefit from the spread of Android comes from bringing new users into its lucrative search/ad ecosystem.
Where do these numbers come from? These have not been verified. Given that Apple feels blowback (calls to boycott Apple and generally a great disdain or forced apologies that embarrass the company’s culture), we might as well suspect a non-victory for Apple. One expert says:
“This settlement and their statement on Friday don’t quite jive,” says David Martin, Founder and Chief Executive of M·CAM. “Apple is starting to look at the market consequence of their litigation strategy and realizing there may be some blow back from it.”
The Microsoft booster says that Apple gets paid (among other outrageous things), but maybe this is just propaganda. Groklaw writes in response: “Inventor of the touch screen, my foot. And by the way, isn’t Apple the company claiming that if it has to pay a more or less equivalent sum for FRAND patents owned by Android vendors, it will put them out of business? And next comes Nokia, the rumors continue, trying to get HTC to pay them too, and they already pay to Microsoft. They call this royalty stacking [Mark Lemley's paper explaining it, PDF], and it’s a fast way to kill off the competition, if you gang up on them this way. Meanwhile, both Apple and Microsoft are whining to regulators about royalty burdens they are threatened with if they can’t devalue FRAND patents. If there are 250,000 patents that read on just one smartphone, where in the world is the profit going to come from? You can’t make a phone in that environment. Instead of getting rid of software patents and/or devaluing all patents or even coming up with a reduced rate for victims of royalty stacking demands, Apple and Microsoft would like the devalue the ones they don’t own, but Android vendors own, while leaving their patents at full value. That way Android can’t compete in the marketplace and people will stop selling it. If by any chance you are thinking that *Apple* would never pull such a dirty trick, I direct you to their response to the UK court’s order to post a notice that Samsung didn’t copy Apple’s design patent, which the court characterized as showing a “lack of integrity”. Where are the antitrust regulators now?”
“It’s all secretive, but Microsoft and Apple try to deceive the press and the regulators.”But wait, does this booster (Eric Savitz) just spread his usual FUD? These are not verified claims, it could be just a scare tactic. Here is a more accurate report.
“Microsoft and Google’s Motorola Mobility unit are set to square off on Tuesday at a trial with strategic implications for the smartphone patent wars and which could reveal financial information the two companies usually keep under wraps,” says the Indian press. It’s all secretive, but Microsoft and Apple try to deceive the press and the regulators.
We do not even know how much HTC pays Microsoft, if anything, The claims of five dollars are unverified. Here is a new example of spin in patent settlements:
In Planning Software Patent Settlement, Both Sides Claim Victory
In the wake of a settlement of a patent infringement lawsuit involving two major financial planning software products, both sides are proclaiming victory.
“We are extraordinarily happy,” said David Loeper, CEO of Wealthcare Capital Management, the plaintiff in the case. “We’re not just happy; we had a great celebration when the agreement was settled. I can understand why the other side would be too, given the liability if we had proceeded with litigation.”
This is what the Apple-HTC settlement might have been like. It is possible that HTC pays nobody for Android. It’s speculation. When Microsoft signed a patent deal with Novell, for example, Novell was actually bribed, not charged. It was all for FUD. They create fear, uncertainty, and doubt.
Update: hours after I had drafted this post I found this post titled: “Here is why HTC doesn’t pay a cent to Apple”
Remember those statements from yesterday that HTC has to pay Apple around $6-$8 for each and every Android smartphone they sell? Well it turns out that this was complete bogus.
As I suspected when I first researched this topic, this is all just FUD and the claim is most likely bunk. Sites like Groklaw got suckered by the FUD, which had simply spread all around the Web, sometimes by all the usual suspects. █