You might have missed the news earlier this week, but Microsoft has quietly become one of the largest patent trolls in the world. Following this week’s deal with Foxconn to license patents to original design manufacturers (ODMs), Microsoft will now reap a small fortune from all Android handsets sold in the future.
According to the Redmond firm, as many as 50% of the world’s Android phones are manufactured by companies licensed to use its patents. This accounts for so much profit, that Microsoft actually earns more from its patents that it does from Windows Phone, according to a 2011 report from PaidContent.org.
Now Microsoft would probably prefer things to be the other way around, but the hard truth is that Windows Phone has struggled to make barely a dent in the global smartphone industry to date. With no other way of generating cash from the fast-growing mobile niche, it’s clear that patent fights have become a top priority for the company.
Trolling or Just Good Business?
No one is particularly happy about Microsoft’s patent strategy of course, but the fact is that the law is firmly on Redmond’s side of the fence. The last company to try and fight Microsoft was Barnes & Noble, which argued in court that Microsoft’s tactics went against anti-trust laws. Unfortunately for them, the judge in that case took Redmond’s side, ruling against Barnes & Noble, who promptly went and signed a licensing deal with the software giant.
So far, the only company to really put its foot down with Microsoft and its patents has been its eternal rival Google, which has fought tooth and nail via its Motorola subsidiary to avoid paying any licensing fees to Redmond. Google is well positioned to fight its corner of course, but ultimately its prospects don’t look that great in light of the Barnes & Noble ruling. Fact is, the law states that Microsoft is indeed well within its rights to ask for money for the technology it has developed, and from Redmond’s perspective, doing so is simply good business.
Ultimately, it will probably be the consumers that end up losing out. Unless the government ever steps in to stop all of these software patent laws, companies like Microsoft, Google and Apple have no incentive to stop ‘weaponizing’ their patents, and eventually this may lead to higher prices. Following the Foxconn deal, Android makers may well have to increase their prices to cover the new “Microsoft tax” they’ll be forced to pay for each handset sold.
Sure, we haven’t seen any significant price increases yet, but they may well kick in soon when companies see realize just how much of their profits goes toward Microsoft.