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Barnes and Noble petitions Nokia over Microsoft deal

Nov 10, 2011 — by Eric Brown — from the LinuxDevices Archive — 2 views

Barnes & Noble has subpoenaed Nokia in its defense against Microsoft's Android-related patent infringement claims, following its petition to the U.S. Department of Justice to look into Microsoft's patent behavior for possible antitrust violations. In other patent-related news, Microsoft and Huawei are negotiating on a patent agreement, say reports.

Most of the Android device developers accused by Microsoft of infringing its patents have signed patent agreements — including heavy hitters such as Samsung and HTC. Huawei is now said to be in negotiations (see farther below).

Motorola Mobility and Barnes & Noble, however, resisted signing, and each has been sued by Microsoft. Motorola is seeking refuge in the acquiring arms of Google after its own legal battle with Microsoft appeared to falter. Now, Barnes & Noble (B&N) is fighting back on its own.

A Nov. 8 report by Bloomberg uncovered an Oct. 17 letter from B&N requesting that the U.S. Department of Justice (DoJ) investigate Microsoft for anti-competitive tactics regarding Android patent agreements and litigation. Meanwhile, a Nov. 11 story by NetworkWorld reports, B&N has also subpoenaed Nokia and patent-enforcement agency Mosaid Technologies in its defense against Microsoft.

The subpoenas, which address issues surrounding Microsoft's investment in Nokia earlier this year, are said to have been revealed in documents filed with the U.S. International Trade Commission (USITC).

Microsoft filed its lawsuit against Barnes & Noble in March, with both the ITC and the U.S. District Court of the Western District of Washington. The suit addressed Android-based UI techniques, used in the Nook-e-reader and claimed to be covered under Microsoft patents, and also targeted Nook manufacturing partners Foxconn and Inventec.

Presumably Microsoft' patent claims would extend to B&N's new Nook Tablet (pictured), the bookseller's first full-featured Android tablet. The Nook Tablet goes head to head with's soon to be released, Android-based Kindle Fire tablet — likely to have been protected via an extension of an earlier patent agreement Amazon signed with Microsoft in regard to the Linux-based Kindle.

In April, B&N countersued Microsoft in the Washington court, accusing Microsoft of anti-competitive business practices. The Washington State trial is scheduled to begin in February.

Investigating Microsoft's Nokia and Novell deals

On Nov. 7, B&N made its DoJ petition public along with three others presented in its filing, according to Bloomberg. The letters and the subpoenas both address issues related to Microsoft's Windows Phone agreement with Nokia in February. As part of the agreement — which included a $1 billion investment in the Finnish phone maker by Microsoft in exchange for Nokia licensing Windows Phone —  Microsoft gained access to Nokia's more than 2,000 patents.

In September, according to NetworkWorld, Nokia extended to Microsoft its agreement with Mosaid, "making it a threesome of patent sharing."

The three-way agreement with Mosaid was cited in the DoJ letter as evidence of anticompetitive behavior. So was Microsoft's involvement in a consortium that cornered Novell patents that had been sought by Google.

As part of Attachmate's acquisition of Novell, Novell agreed to sell some of its IP assets to CPTN Holdings LLC, a hithero unknown consortium organized by Microsoft that also involved Apple. The $450 million sale led to some 882 patents becoming potentially available to Microsoft.

The DoJ delayed the acquisition as it studied the patent issue, but ultimately allowed the transactions to be consummated. Most of the patents were speculated to be related to WordPerfect, which Novell acquired in the late 1990s.

Together, the Nokia/Mosaid patent arrangements and CPTN Holdings actions represented a "series of tactics designed by Microsoft to raise its rivals' costs and prevent Android- based devices from taking away sales of Microsoft's Windows operating system," wrote Peter Barbur, of Cravath Swaine & Moore in B&N's Oct. 17 DoJ petition, according to Bloomberg.

B&N subpoenaed both Nokia and Mosaid for a broad list of documents, according to NetworkWorld. "The requested information will demonstrate that Microsoft is broadening its patent portfolio as part of its campaign to use minor patents to suppress competition from Android and protect its monopoly in PC operating systems," Barnes & Noble's lawyers were said to have written in documents filed with the USITC.

Nokia and Mosaid independently filed motions to quash the subpoenas, adds NetworkWorld. Requested documents include those with evidence of discussions pertaining to the Nook, patent assertions against Android or other open source operating systems, according to the story. B&N is also seeking information of Nokia's knowledge of patents that Microsoft, Nokia, or Mosaid have asserted Android violates.

In addition, B&N is requesting details of Microsoft's agreement with Nokia, as well as the role played by former Microsoft executive and current Nokia CEO Stephen Elop in coordinating a strategy with Microsoft to compete with Android. Information has also been requested on Mosaid's patent activity, as well as Nokia's patents and Android business plans, says the story.

In the valley of the trolls

NetworkWorld goes on to report on Mosaid's recent patent activity, and although the term "patent troll" is not used, it seems to be inferred. Mosaid's activities are said to include an ongoing patent lawsuit against Cisco over Power over Ethernet (PoE), as well as its recent acquisition of Core Wireless Licensing, said to be the original patent-license firm that had access to Nokia's patent stockpile.

At the time, Mosaid said it would "fund its acquisition of the portfolio through royalties from future licensing and enforcement revenues," says the story.

NetworkWorld also describes how WiLAN, which is suing Apple, Intel and major PC vendors for patent infringement, launched a hostile takeover attempt of Mosaid in September. On Oct. 28, venture capital firm Sterling Partners attempted to buy Mosaid for $590 million and take the firm private in a deal expected to close by January, says NetworkWorld.

The story goes on to explain additional connections and complications related to Mosaid, Nokia, and Microsoft that should keep the DoJ and USITC quite busy in the coming months.

In July, Microsoft joined a consortium that successfully outbid Google and others in an auction of 6,000 Nortel patents and patent applications. The $4.5 billion bid from the consortium — which included Apple, Research in Motion, EMC, Ericsson, and Sony — beat out Google's bid for the wireless-related patents, which could have helped Google ward off legal attacks against Android. Realizing it could not compete, Google bid $3.14159 billion — the first six digits of Pi. The Nortel auction, however, does not appear to be cited in B&N's allegations.

Huawei negotiating with Microsoft

According to multiple reports this week, including a Nov. 8 report by the Guardian, Chinese telecom and consumer electronics giant Huawei is negotiating a patent deal with Microsoft related to Android.

"Yes, Microsoft has come to us," Victor Xu, chief marketing officer for Huawei Devices, was quoted as telling the publication. "We always respect the intellectual property of companies. But we have 65,000 patents worldwide too. We have enough to protect our interests. We are a very important stakeholder in Android." 

Huawei is an up-and-coming force in Android devices, with products such as the Huawei Vision smartphone and MediaPad tablet (pictured at right). Like fellow Chinese Android vendor ZTE, Huawei is increasingly gaining market share and moving beyond the Asian market to sell Android devices in the U.S. and around the world.

Huawei's own patents may indeed help it negotiate a better deal for itself, but it appears the company will follow a long list of consumer electronic manufacturers in paying Android royalties to Microsoft. Most recently, in late October, Microsoft signed an agreement with Compal Electronics, a Taiwanese original device manufacturer (ODM) that manufactured the original Motorola Xoom tablet.

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