For years, Microsoft has made patent threats against Linux. Mind you, Microsoft has never proven, or even attempted to prove, any of these claims. That hasn’t, however, stopped Microsoft from using the threat of Linux patent lawsuit to force companies like Amazon into paying them off. Now, Microsoft has upped the ante. Microsoft has muscled mobile phone maker HTC into paying Microsoft off for patents that may apply to its Google Android-powered phones. In short, without actually proving that Linux is violating Microsoft’s patents, the Redmond giant is ‘taxing’ companies for using Linux.
We don’t know how much HTC is paying in royalties for these patents. In fact, we actually don’t even know what patents Microsoft is claiming that Linux-based Android may be violating. Both companies are hiding the specifics under a nondisclosure agreement.
Horacio Gutierrez, Microsoft’s deputy general counsel of intellectual property and licensing did say in a blog though, that “the radio stack–the functionality that allowed users to make and receive calls … still commands the highest patent royalties, on the order of 5% of the price the device manufacturer charges the mobile phone operator.” And, “the royalties for codecs (which encode and decode digital media) and other technology represent 1-2% of the price to operators. And now the industry is in the process of sorting out what royalties will be for the software stack, which now represents the principal value proposition for smartphones.”
So, if the software stack is where the “principal value for smartphones” lies, that means what? That the royalty payment should be, say, 4%? If that’s so, then $8 from every HTC Droid Incredible from Verizon Wireless, at its fully discounted price of $199.99 goes to Microsoft’s wallet. What a deal… for Microsoft.