SCOny defined, following SCO and SCOracle tactics

Summary: Despite using Android itself, Sony helps Apple against Samsung, using patents

Sony reserved the right to sue and we finally see why reservations as such are trouble. Let's start with some background from this week's news.

Samsung has begun retaliating for Apple's aggression more strongly then before (stopping supply of components), with lawsuits that go both ways as well as deterrents:

Seeking to head off Samsung argument, Apple shortens a patent term

Apple agreed to limit the term of one of the patents it used to win a $1.05 billion jury verdict against Samsung. The company filed a so-called "terminal disclaimer" with the patent office today. It limits the term of patent D618,677, a patent that 12 different Samsung phones were found to infringe.

Samsung says something along the lines of "Without Us, There Is No iPhone":

A Samsung executive laid it out: Without the Korean company's patents there can be no iPhone, at least not one that works. Shin Jong-Kyun, President of Telecoms and IT at Samsung, told reporters in Seoul that the truth will out, and that Apple couldn't make the iPhone without using Samsung's patents.

This is getting ugly and it's bad for Apple. Sony, part of the cartel formed around Nortel's patents (inclusive of Apple), is striking and hacking away at Samsung now. Sony has a lot of patents, including a lot of hardware patents. Pamela Jones writes: "More stupid smartphone patent warfare. Ericsson is, of course, part of Rockstar Consortium's Gang of Five (Apple, Microsoft, Ericsson, RIM and Sony) who bought Nortel's patents." Here is the article she cites and here is more:

Ericsson has filed a suit against Samsung for patent infringement.

The Swedish telecommunications equipment maker said today that it launched the lawsuit after the two companies were unable to reach an agreement about renewing patent licensing deals.

Samsung previously licensed Ericsson's patents in 2001 and renewed terms in 2007, but licenses have now expired. According to Ericsson, Samsung refused to renew the licensing agreements for its patents on FRAND terms. FRAND (fair, reasonable and non-discriminatory) terms are used by industry groups to set standards for technology and products, and are aimed at encouraging competitiveness without allowing rights holders to abuse their position, and create a setting for patent holders to receive royalties.

No licensing deal was forthcoming "despite two years of negotiations", Ericsson said in a statement, so the company decided it "must take action to support a crucial system for technology sharing that has helped create today's mass market communications industry." Consequently, Ericsson decided to take legal action, filing a complaint in the District Court for the Eastern District of Texas.

Here is an expert reporter on patents:

Samsung is already embroiled in a worldwide patent fight with Apple, but the company will now face a patent attack from another direction. Swedish telecom giant Ericsson sued Samsung today, saying the Korean company wouldn't renew a patent cross-licensing agreement after two years of negotiation.

Samsung refused a deal on terms that the rest of the industry has accepted, Ericsson representatives said today. The specific terms offered weren't disclosed, but documents show they were "Fair, Reasonable, and Non-Discriminatory," or FRAND. Just what constitutes a FRAND rate is very much in dispute right now, however, with multiple US federal courts and the US International Trade Commission considering the issue. Samsung licensed Ericsson's standards-essential patents in 2001 and again in 2007, but its license has now expired. "Samsung’s refusal to pay a FRAND rate gives it an unfair competitive advantage over its competitors who have licensed Ericsson’s patents," write Ericsson lawyers in today's filed lawsuit.

Walters Consulting and I exchanged some mails about this lawsuit. He thinks Sony may be liaising with Microsoft and Apple here, based on this latter post:

Let’s take a look at some not-so-recent history… as is well known, Sony is, and has long been, a media and entertainment giant. They helped to develop the standards for the MPEG, MP3, and MP4 file formats decades ago, and also developed the software processes that administer digital rights media (DRM) on all sorts of platforms, from Microsoft’s Windows Media Player to Apple’s iTunes. As such, they collect royalties and licensing fees from Apple and Microsoft for using their patented software solutions for digital rights media management, and they continue to be a gigantic player in the music and movie industries. Just ten years ago, Sony entered the mobile phone market by partnering with existing mobile-phone-maker Ericsson to create a mobile technology joint venture in Sony-Ericsson. They operate very heavily upon a traditional business model, just as Apple and Microsoft do, which demands that information always comes for a price.

Now, some more recent history… Early on in 2009, Sony-Ericsson made a decision to design all of their new smartphones based upon Google’s Android, rather than continuing to use their own UIQ versions of Symbian (as opposed to Nokia’s S60, S80, and S90 versions of Symbian) and Microsoft’s Windows Mobile. Sony-Ericsson had been very successful through about 2006 or 2007, but had seen a severe decline in sales after that. In 2011, Sony agreed to buy out their partner Ericsson’s share of the joint venture, and Sony-Ercisson became just another part of Sony. Rebranded and remodeled, Sony’s mobile division began to immediately see improvement, and new pending phone designs were given an extreme fashion makeover. Despite Sony’s use of Android, Apple, for some reason, clearly gave Sony a pass. In fact, when Apple went to court to ask for a ban on sales and import of Samsung’s Android-based products, they were asked to show examples of competitors’ products that did NOT violate their patents-in-question… they produced a Nokia Lumia 800 with Microsoft’s Windows Phone platform, and an Android-based Sony Xperia ion, to fulfill the judge’s requirement.

Whether you see this as hypocrisy or not, there is an excellent reason for this behavior. Apple and Microsoft need an inside ally, and Sony is a very good one. Not only that, but Sony has clear aspirations to join the technology giants in the mobile space. In a way, Apple and Microsoft are already somewhat beholden to Sony over cheap access to DRM patents, especially in a world where digital entertainment is drawing ever more unrealistically extravagant profit margins. The ultimate software industry threat to both Microsoft and Apple is a robust open-source Linux following, and the freedom and popularity of Google’s Linux-based Android is a huge threat if unchecked.

Sony is no friend of Linux. It is just opportunistic about it, more so than Samsung. The FSF's founder called for a boycott of Sony (or at least demotion thereof) long ago. Now it's more justified than before. ⬆