Google's Android operating system could face new legal attacks from Microsoft and Apple, now that their “Rockstar Bidco LP” consortium has won court permission to purchase Nortel Networks' patent portfolio. However, the judge presiding over Oracle's lawsuit against Google may soon stay the proceedings pending re-examinations of the patents in question, according to Foss Patents blogger Florian Mueller.

It lately seems that tech giants would rather litigate than innovate. And just about everybody is unleashing their legal hounds on Google, whose Android operating system continues to gain smartphone market share.

As we've been reporting over the past couple of weeks, Microsoft is not targeting Google directly so far, preferring to take on manufacturers of Android devices. ("If we can't beat them in the market, we'll beat them in court," CEO Steve Ballmer is apparently saying.)

A July 6 Reuters report claimed that Microsoft has made a patent deal offer to Samsung, through which the latter would pay it as much as $15 for every Android handset it produces. Samsung would "likely seek to lower the payment" from $15 per phone to about $10 in exchange for "a deeper alliance with Microsoft" and its Windows Phone 7 platform, the story claimed.

This followed a July 5 deal with ODM (original device manufacturer) Wistron that was said to involve a patent-licensing agreement regarding tablets running both Android and Google's Chrome OS. In June, furthermore, Microsoft corralled three other Android device manufacturers: General Dynamics Itronix, Onkyo, and Velocity Micro.

Meanwhile, HTC agreed in April 2010 to pay royalties to Microsoft in order to involve lawsuits involving Android smartphones. At the time, we described "Microsoft's FUD (fear, uncertainty, and doubt) invasion [as] … for the first time pushing into the Android world."

The FUD gets a lot worse

As far as we're aware, there has been no public explanation of what Microsoft patents Android devices infringe. Nor is it clear whether, ultimately, it will be possible for any manufacturer to create an Android devices without paying a tithe to Redmond.

What we do know is that the FUD just got a lot worse. As we reported last week, Microsoft joined Apple, EMC, Ericsson, Research in Motion (RIM), and Sony in a consortium termed Rockstar Bidco LP — which successfully gained more than 6,000 Nortel Networks patents and patent applications at a bankruptcy auction. The $4.5 billion Rockstar bid beat out Google's own, which could have purchased some protection for Android, by more than $1 billion.

Our sister publication eWEEK reported July 10 that the American Antitrust Institute sent a letter to the Justice Department, complaining about the behavior of Apple, Microsoft, and RIM in particular. "Three close competitors' shared control over 6,000 patents surely at a minimum creates significant risk of spillover collusion, tacit or otherwise," the letter stated.

To no avail, however, as U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, and Ontario Superior Court Judge Geoffrey Morawetz in Toronto approved the sale July 11, according to stories by Bloomberg and Reuters. Both news services quote David H. Botter, an attorney for the main committee of Nortel's unsecured U.S. creditors, as saying, "This is truly a 'wow' transaction."

Once the sale closes in about a month, the money will become part of the Nortel estate and will eventually be distributed to its creditors. It would have been a "$4.5 billion mistake" not to have approved the sale, Delaware bankruptcy judge Kevin Gross is quoted by Reuters as saying.

Oracle lawsuit could face delay

Oracle, meanwhile, has suffered what appears to be at least a minor legal setback in its own legal battle against Google, regarding the use of Java patents in Android. Last month, Oracle disclosed that it's asking for damages running into billions of dollars, based on part on the estimation that Google makes $3.35 a year per Android device from mobile ads.

The Federal judge presiding in the case "appears to be giving at least serious consideration to a partial or even complete stay of the case pending the ongoing reexamination of Oracle's patents by the US Patent & Trademark Office," according to a July 11 blog posting by "intellectual property activist" Florian Mueller. The stay would mean the case's being held up until the U.S. Patent and Trademark Office (PTO) can re-examine seven patents at issue in the suit, he writes.

Mueller claims that based on the preliminary status of those re-examinations, "Oracle has (though not definitively) lost three patents. All of the claims of those patents that Oracle wanted to assert have been rejected on a preliminary basis."

He further adds, "A fourth patent has been seriously weakened based on the preliminary rejection of many (and especially some very important) claims. A fifth patent has also suffered but came out relatively strong. For the two remaining patents, no first Office actions have been issued yet."

According to Mueller, the trial is tentatively scheduled to begin on October 31, with a jury verdict to be handed down three weeks later. "In the event it's necessary, Oracle will probably take more time and modify its litigation strategy. It's not in Oracle's DNA to give up, and Oracle wants billions of dollars out of this case," comments Mueller.

A July 5 story by IDG News Service writer Nancy Gohring claims Oracle could wind up asking Android OEMs to pay $15 to $20 per handset in licensing fees. Add that to a $10 or $15 payment to Microsoft, and manufacturing Android phones could soon become a costly proposition.

As former U.S. Senator Everett Dirksen is (perhaps apocryphally) quoted as saying, "A billion here, a billion there, and pretty soon you're talking real money."

Jonathan Angel can be reached at [email protected] and followed at www.twitter.com/gadgetsense.

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