The Varieties of Patent Infringement
It happens a lot. One technology company sues another firm for patent infringement, with hopes of reaching a large settlement that will help it revive flagging fortunes, launch a business, or protect the status quo.
Struggling companies hope to open up a new stream of revenue - it’s usually the equivalent of a corporate Hail Mary pass. For small patent holding firms that sue massive multinationals, it’s a lottery ticket with better odds. These firms, sometimes known as ‘patent trolls’, don’t produce goods or deliver services. Instead, the firms try to keep the business afloat with the aid of the legal system.
These types of patent infringement lawsuits can often times be easily dismissed as the plaintiff’s claims are opportunistic and sometimes frivolous (from what I’ve seen though a plaintiff’s chances vary on a case-by-case basis).
One notable exception of course is NTP Inc., the small patent holding company based in Richmond, Virginia, that squeezed US$613-million out of RIM in a settlement reached in November 2006.
Then there are the largest of companies that believe its patents have been legitimately violated by another large company. One recent and prominent example is the suit by Verizon Wireless against Vonage Holdings Corp. that netted the wireless service provider an award of about US$120-million last year.
These types of suits are tougher to call. One thing’s for sure - when companies in the same sector launches a suit in the direction of a competitor, it’s a move to slow down or injure the company.
The suit and countersuit involving RIM and Motorola, uncovered yesterday by the Wall St. Journal, is one such example. Motorola alleges its WiFi patents are being infringed RIM believes its being charged unfair licensing fees for use of Motorola’s patents related to WiFi on mobile devices.
RIM claims the licensing fees commanded by Motorola, for use of its patents related to WiFi, are excessive.
The background to the dispute is much more interesting - the companies are running into each other more on the competitive battleground. Motorola and RIM, which have collaborated in past, now appear to have the high-end consumer in their sights.
Motorola also happens to be a company that’s struggling to find its way. Ed Zander was forced out as chief executive in the fall after a series of poor quarterly performances. The beleaguered company’s new CEO, Greg Brown, has said the company may sell its handset unit. RIM, meantime, wants to maintain its Cadillac status in the wireless e-mail/device field - a lawsuit against a competitor is one way to do it.
I’m no lawyer but my guess is that the companies will settle and likely on terms both companies view as a compromise if not fair. Better to have the competition settled in the playing field where the better company usually wins.
The Blu-ray disc format: does it matter?
UPDATE: Toshiba is set to pull the plug on its HD DVD business early this week, five years after it began a format battle with rival Sony.
According to the Wall St. Journal (subs. required), Toshiba is going to announce its exit from the HD DVD business after a 5-year battle with Sony and its Blu-ray technology.
The only surprise about the anticipated exit is the speed with which Toshiba is pulling out of the high-definition video format market. Toshiba spent hundreds of millions of dollars trying to convince consumers its HD DVD format is superior to Sony’s Blu-ray technology. But Sony’s PS3 video game console, which has a Blu-ray disc player in it, superior technology, and likely some clever lobbying with the studios helped the company make its format the winner.
Knowing Sony, it’ll overprice its discs and readers much to the frustration of consumers.
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The answer to the question in the headline is of course yes.
The Sony-backed high def disc format is set to become the technology upon which all home movies are recorded on; the players too will have to read the discs.
But just because the standoff between Blu-ray and HD DVD is all but over, doesn’t mean consumers will soon snap up Blu-ray discs and players for next-generation TVs en masse.
Not even close.
Blu-ray players and discs are still expensive, ranging from $400 to $1000 at Canadian retailers such as Future Shop and Best Buy. A DVD player that reads standard discs costs as little as $25 now - they are now disposable items.
The final nail in the HD DVD coffin was nailed last week when Wal-Mart said it will sell Blu-ray discs exclusively. Roughly 20% of the DVDs sold in the U.S. (and probably Canada too) are bought at Wal-Mart stores. Wal-Mart had been a backer of the HD DVD format.
The end of the battle, such as it was, signals the beginning of the early adopter phase for next-generation disc player and movie sales. People had held off on purchases for fear their players and discs would soon be rendered useless.
While consumer tech enthusiasts are far more likely to hit the stores, most TV owners still don’t even know their new TV has high-def capabilities.
It’ll be another 12 to 18 months before HD players and movies hit the mainstream. Sony’s victory simply paves the way for high-def disc and player adoption to begin.
Factoid that May Only Interest Me
Google surprised itself and others this week when the search giant said it has seen 50 times more search requests from Apple’s iPhone than any other device.
“We thought it was a mistake and made our engineers check the logs again,” Vic Gundotra, head of Google’s mobile operations told the Financial Times during this week’s Mobile World Congress in Barcelona.
The mobile search figures demonstrate a number of different points (from the most to least obvious): 1) the iPhone has developed a critical mass of users;
2) the iPhone’s touchscreen and built-in Wi-Fi capabilities make it a vastly superior device for mobile search. At least that’s my experience.
3) the mobile web and search markets are still in the toddler phase, which has allowed the iPhone to hold such a sizable lead over competitive devices.
4) boy that Steve Jobs sure is great. I’m kidding of course.
Palm takes shot at RIM with U.S. ads
This being Valentine’s Day, Palm has decided to give the world the gift of uptime.
The struggling handset maker is uh, trying to console Crackberry users still suffering from withdrawal after Monday’s network outage. The company’s taken out full page ads in several national U.S. papers and media outlets to let people know that Palm users don’t have to worry about such things as third-party servers and blackouts.
The company’s U.S. homepage is also running the ad that promises Palm devices will deliver "uptime."
The struggling handset maker of course will take any opportunity it can get to take RIM, a smartphone market leader, down a peg or two.
Canada being RIM’s backyard, you’d think Palm would roll the ads out here. You know, hit the giant where it hurts. Alas, I have yet to see the ads in any Canadian publication or media outlet. Have I missed them?
The company’s longtime Canadian president, Mike Moskowitz, left in November last year after at least 10 years as division head to become XM Canada’s president. What’s going on with Palm in Canada?
Walt Mossberg’s verdict on Vista SP1: Where’s the Beef?
The Wall St. Journal’s Walt Mossberg (subscription required) has a review of Microsoft’s update to its much-discussed operating system in today’s paper and it’s not great news.
Mossberg’s major beefs with the 65MB free update to Vista are as follows:
- "it adds no significant, visible features to Vista, and changes little or nothing about the way the operating system looks and works."
- doesn’t fix the most "annoying" flaws of Vista such as slow start-ups and reboots.
- it still requires users buy add-on anti-virus security software.
- can temporarily downgrade PC performance.
- SP1 made rebooting — already slower than on comparable Windows XP computers or Macintoshes — even slower (on his first try).
Nonetheless, Mossberg says it’s worth installing. Some of the positives include the fact Vista is faster now recovering from sleep or hibernation mode back to an active state. The other improvements he says are all under the hood and not visible to most users. He also seems irritated by Vista’s embedded security features. He concludes by saying users will find to it to be a "step forward" after a couple of days of use but not a "big one."
Mossberg, David Pogue of the New York Times and Ed Baig of USA Today, by virtue of the fact they work for three of the largest and most influential publications in the U.S., are usually given, er loaned, the latest gadgets first so people turn to them first for opinions which makes them key influencers.
Anyways, Mossberg for one misses the point on a couple of issues at least. Service packs aren’t meant to be complete redesigns of operating systems or software. They’re meant to enhance performance and fix problems of previous versions of Vista or past operating systems. His expectations were unrealistic.
Microsoft will probably try to sell to more aggressively sell its own A/V software in future which is exactly why it’s not embedded in SP1.
Overall, the Vista adoption cycle looks like a typical Microsoft product release. The company has gathered feedback from users after the release and has incorporated some if not all of them into SP1. I have yet to try SP1 but if history holds true this is the time when widespread adoption of the operating system will commence.
BlackBerry outage update
The latest BlackBerry outage, which lasted for three hours on Monday, has been officially blamed on a software upgrade.
RIM said that millions were left without service (horror of horrors!) in the U.S. and Canada because of an “internal data routing system within the BlackBerry service infrastructure that had been recently upgraded.”
It’s roughly the same excuse used last April when a similar outage occurred.
The latest upgrade was meant to boost network capacity and speed message routing, RIM said.
Wasn’t this issue supposed to have been solved already? Oh well. The carriers are happy as long as revenue per user keeps going up and cool new devices can be placed in the hands of people who haven’t owned BlackBerrys previously. As for the customer, well, a hiccup now and then is going to have to be tolerated.
As Rob Pegoraro points out, the downtime shows the danger of RIM’s “eggs in one basket” approach to network management.
Google Android prototypes are out
No the search king isn’t going Terminator on us.
Google, however, and its partners are taking on Verizon Wireless and other lumbering giants in the cell phone service provider fields with its Android operating system.
Google has lined up about 30 phone, chip and software companies to help develop Android systems under something called the Open Handset Alliance.
This also puts Google into competition with Nokia, RIM, Microsoft and a host of other manufacturing giants in the smartphone market though no products have been released.
Google, with partners Texas Instruments and Qualcomm Inc., showed off prototypes of the first phones to be released at some point later this year at the World Mobile Congress, the largest mobile phone show in the world (and something I hope to attend at some point in the future) earlier this week.
If you’re slow like me, you may have missed the news from the show, which is being held in Barcelona, Spain.
Apparently the prototypes were well received by show goers - then again these are people who I’ll politely call “early adopters.”
There are a number of benefits to the Google cell phone strategy. For manufacturer partners, Android will apparently cut development time to six or seven months from the current 18-month period so its manufacturer partners will be able to push Google-powered phones to market relatively quickly.
The other benefit is apparently the design. Android-equipped smart phone users will also apparently be able to navigate the Web by running a finger over the display — and how they’ll find full-size pages, not a Web resized for mobile devices’ small screens.
Don’t expect to see too many Canadians walking down the street with the Android operating system running a phone anytime soon for a number of reasons.
1) Android-based smart phones won’t be released until the second half of this year.
2) Smart phones represent only about 10% of cell phone shipments. Even if that goes up to 20% or so by 2010 as expected, the phones will be rolled out on smaller networks worldwide, none of which are Canadian.
3) It is Linux-based, which doesn’t fly here in Canada. At least not in cell phone land.
4) Google’s Open Handset Alliance, formed to generate support for Android, consists of smaller handset makers, such as Motorola, that are struggling against market leaders such as Nokia.
That is all.
BlackBerry outage mania
With apologies to Peter King of Sports Illustrated (who writes a fantastic football column called Monday Morning QB for si.com) here are 5 things I think I think about the BlackBerry outage yesterday, which lasted all of three hours.
1) We are a nation of whiners. I mean, how many people’s lives were truly endangered or disrupted yesterday by the fact. Surely, people that needed to be contacted yesterday could have been reached by phone or text message or by yodelling across Parliament Hill.
1 a) Garth Turner seriously needs to get a life. The Liberal MP declared yesterday that the Liberals were in "crisis" and that the BlackBerry outage made him and fellow politicians feel "isolated." Pathetic. Mr. Turner, you’ve officially lost one vote - I am going to vote for the Tories or NDP - any other party - come spring or whenever the next fruitless election is held. Anyone or any party that can’t run a caucus meeting without functioning BlackBerrys doesn’t deserve to run the country.
2) Nonetheless, what in the name of Jim Balsillie is going on at RIM? I seem to recall a statement from Mr. Balsillie some time ago that BlackBerry outages are "very rare" or some such verbiage. These outages seem to happen at least once a year if not more. Am I wrong?
3) This is more of a question for RIM’s communications department. Why is it during BlackBerry outages, your company is silent? Is it a tacit agreement with the carriers, such as Bell Canada, that they will handle all communications matters related to BlackBerry outages? Users would like to know when service will be up and running again.
4) My BlackBerry, which runs on the BlackBerry Internet Service, ran perfectly all day. This says to me the problem is obviously located in Waterloo, Ont. where RIM’s unique network operating centre (NOC) is located. RIM - what’s the problem and is it going to affect service in future? Can RIM’s network infrastructure keep up with subscriber growth?
5) CNBC’s coverage of the BlackBerry yesterday was over the top. There are 12-million BlackBerry subscribers worldwide - a three-hour outage doesn’t deserve the same kind of coverage the war in Iraq or other world issues receive no matter how much air time you have to fill.
Yahoo-AOL tie up? Not in this century.
Yahoo officially turned down Microsoft’s US$31 a share offer as expected this morning, with some reports suggesting the Web services company is trying to hook up with Google or even AOL.
This is far from a strategic move or even a realistic merger and acquisition scenario.
A proposed merger between Yahoo and AOL is nothing more than a negotiating ploy on the part of Yahoo management. Nothing wrong with that as it’s the company’s duty to extract the most money possible from Microsoft, er, the highest bidder.
Even if by some miracle AOL was to take over Yahoo, the merger does nothing to plug the many holes in Yahoo’s portfolio such as search marketing.
But make no mistake about it - an AOL tie-up won’t fetch Yahoo the US$44.6-billion valuation Microsoft has placed on Yahoo. It will probably help Yahoo shareholders get more money from Microsoft which may finally give long-suffering folks reason to yodel again.
There are not as many possible scenarios as Yahoo would like shareholders and Microsoft to believe there are. Nope - this takeover "battle," such as it is, for Yahoo will fizzle out quickly and pathetically.
Microsoft will buy Yahoo but the price will likely be in the US$34 to US$37 a share range though some suggest US$40 per share is a more appropriate price. Let’s split the difference guys and get this Yahoo-Microsoft show on the road.
Watch for Microsoft to reup this week if not next week.
Apple price cuts coming?
At least one source says that Apple will drop the prices of both the iPod Touch and iPhone lines by US$100 in the coming weeks.
It would fit Apple’s pattern of behaviour - the company typically chops prices of its products shortly after release dates. Should the cuts come to pass, it will help the company reach its stated goal of 10-million iPhones sold in 18 months.
Even if the price cuts don’t materialize as predicted by the supposedly reliable blogger, Forbes is recommending users hold off on iPhone purchases until the much-anticipated iPhone for 3G networks is released.
Clearly, Apple’s product lineup is going to be revised if not overhauled in the near future. It’s additional proof that users are crazy to buy Apple’s products even 6 months after launch date. (Full disclosure - the 4GB iPhone I bought for US$540 after taxes the first weekend the iPhone hit the market was discontinued in September; barely two months after I bought the thing.)
My guess is buyers of the latest iPhones won’t receive US$100 rebates this time around if say the 8GB model is discontinued in the near future (another rumour floating around in the blogosphere).
Apple be forewarned. Even dumb consumers are wising up (and tiring) of the seemingly endless product release cycles.
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