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02.05.18

The ‘Microsoft Operandi’ of Vaguely Alluding to 200+ Patents to Blackmail the Competition is Now Being Copied by China

Posted in America, Asia, GNU/Linux, Microsoft, Patents at 2:21 am by Dr. Roy Schestowitz

Microsoft did this to demand payments for the use/distribution of Linux

Microsoft mouse

Summary: A look at Microsoft’s latest strategy for ‘monetising’ GNU/Linux and how giants in China now copy that strategy, exploiting a large pile of patents for saber-rattling and demands of ‘protection’ money

THE “NEW MICROSOFT”.

Yes, that’s still a ‘thing’, apparently. So is “Microsoft loves Linux…” (or “Microsoft loves [something FOSS]“)

“When it comes to patents, Microsoft changed the outward appearance of its approach, but the underlying approach is still the same. Microsoft drives up the price of Linux devices and tries to turn these devices into Microsoft cash cows. It’s a racketeering approach, no matter how subtle it may seem.”Smart people fall for neither of the two. Microsoft has not really changed.

When it comes to patents, Microsoft changed the outward appearance of its approach, but the underlying approach is still the same. Microsoft drives up the price of Linux devices and tries to turn these devices into Microsoft cash cows. It’s a racketeering approach, no matter how subtle it may seem. Today we present some evidence from the past week alone.

A week ago Managing IP ran a new series about patents. Watch who sponsors this thing. The patent microcosm does, and the first episode is directly linked to Microsoft through the law firm (Microsoft’s former chief and probably closest business partner). They hope to control the narrative.

“Microsoft is shaking down companies in China, using satellites that prey on Android/ChromeOS OEMs.”But that’s not the ‘smoking gun’. What’s more troubling was already covered here several times last month. Microsoft is shaking down companies in China, using satellites that prey on Android/ChromeOS OEMs. One specific example we gave from China was Nokia‘s taxation of Huawei and Xiaomi.

Nokia was reduced to a minuscule market share after Microsoft had destroyed Nokia and fed its patents to patent trolls. According to this (days ago), the market share may be somewhere around 1%. So Nokia is becoming a troll and/or is feeding trolls. It didn’t do this before Microsoft’s Elop took over.

“Nokia’s licensing team had a huge 2017,” IAM wrote, “but the company is predicting much more to come” according to this latest article, naming some of the affected OEMs:

In 2017 it signed a series of headline deals including with Apple, Huawei and Xiaomi – a run of success which saw patent business chief Ilkka Rahnasto crowned as our top market maker of the year.

[...]

Since Nokia sold its handset division to Microsoft in 2013 and went through an internal reorganisation which saw patent licensing become part of Nokia Technologies, the Finnish company has focused intensely on growing the return from its patent portfolio.

As we said last week, Nokia now goes after the OEMs which Microsoft was never able to shake down over Linux/Android (Microsoft’s patent advantage over Huawei, for instance, wasn’t strong enough). Microsoft is still stockpiling patents on the sorts of things it does not sell or barely ever sells. Its strategy is to just turn patents into a cash cow, helped by trolls and the likes of Nokia. They want a humongous ‘patent tax’ on everything Linux. It’s hardly even a secret.

“As we said last week, Nokia now goes after the OEMs which Microsoft was never able to shake down over Linux/Android (Microsoft’s patent advantage over Huawei, for instance, wasn’t strong enough).”As for Xiaomi, it turns out that it has resorted to a similar strategy, at least in China (for now). As one IAM writer put it the other day, “Jiang Chao tipping his hand here? IP team must have told him they have 200 patents that read on Xiaomi products…”

Microsoft deja vu. Remember those 200+ unnamed patents it claimed were infringed by Linux when it started the blackmail campaign in 2007? Giants in China now use their patents like Microsoft used them a decade ago, in order to bully and blackmail small companies like Coolpad. Here’s the latest:

Coolpad CEO Claims Xiaomi Violated Over 200 of Its Patents & Lawsuit Is To Create Awareness

[...]

The Chinese media was agog recently with news that Coolpad had sued Xiaomi before a Beijing court for patent infringement. Xiaomi had come out after that to deny the allegation and stated that it is yet to receive the court papers. The latest gist coming out of that story comes from Coolpad’s CEO Jiang Chao who revealed that Xiaomi’s infringement of its patents spans more than 200 patents. The CEO, however, stated that they decided to sue Xiaomi for just six out of the 200.

They’re ‘pulling a Microsoft’ here. Xiaomi is behaving like Microsoft but for the time being only in China. Yesterday we saw a report titled “Xiaomi Says Coolpad Didn’t Sue It For Patent Infringement,” refuting some false claims:

Xiaomi denied being sued for patent infringement by Coolpad, with the tech giant’s first comment on the matter claiming that it never received any official notice of such litigation being in the works, Chinese media reports. The statement was meant to reflect on recent reports that Coolpad is targeting several Xiaomi subsidiaries for infringing on a number of the company’s patents related to the Android operating system, though the smartphone maker says its only word of an upcoming legal clash came from those very same reports. It’s presently unclear whether Coolpad made a misstep in the process of filing for litigation or if the leaked lawsuit has yet to be filed in the first place. The supposed plaintiff refused to issue a more in-depth response to the allegations raised by the lawsuit as it said their details remain vague, making it unclear what exactly is Coolpad accusing it of.

Why would Coolpad even sue? It doesn’t have anywhere as many patents as Xiaomi, so in a two-way battle where both companies have products (unlike trolls) it’s only Xiaomi that can win.

“What’s noteworthy here is that we’re seeing US patents being reassigned to companies from China.”According to this, “Chinese smartphone maker Oppo back on the patent purchase trail as it seeks to expand into new markets.”

They know they need patents to avoid being hammered with lawsuits (like Coolpad above). The corresponding article shows that firms from China are now taking over US patents as well:

According to USPTO records, the Dongguan-based smartphone vendor obtained 37 US assets in one assignment on 17th January (the transfers were recorded on Sunday). All the patents involved were formerly owned by Intel, and they were assigned to an entity named Sky Royal Trading Limited before landing in Oppo’s possession. Sky Royal Trading is a Hong Kong registered company with no previous patent assignment record or other online footprint. It’s not clear whether it is a broker or a bespoke Oppo patent acquisition vehicle.

What’s noteworthy here is that we’re seeing US patents being reassigned to companies from China. We saw that before, albeit not often. It’s actually a defensive strategy. The Beijing Higher Court, according Lexfield Law Offices, continues to enforce all sorts of claims, but those are only applicable in China. IAM’s Jacob Schindler, in his latest magazine article, says that “[g]overnment bodies in Asia and beyond say that alternative dispute resolution is underutilised in disputes over fair, reasonable and non-discriminatory licences.”

“That plays a role in the patents gold rush in China and helps explain why there are almost 1.5 million patent filings per year (as per last year at least).”Those are often patent pools, in which the only permitted participants (for free) are companies with loads of patents. That plays a role in the patents gold rush in China and helps explain why there are almost 1.5 million patent filings per year (as per last year at least). WIPO uses these insane numbers for propaganda purposes, neglecting to note that such numbers are MEANINGLESS without QUALITY being taken into account.

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