Google: Please Don’t Kill Video on the Web
Posted by Dave Heiner
Vice President & Deputy General Counsel, Corporate Standards & Antitrust Group, Microsoft
Earlier today, Microsoft filed a formal competition law complaint with the European Commission (EC) against Motorola Mobility and Google. We have taken this step because Motorola is attempting to block sales of Windows PCs, our Xbox game console and other products. Their offense? These products enable people to view videos on the Web and to connect wirelessly to the Internet using industry standards.
You probably take for granted that you can view videos on your smartphone, tablet, PC, or DVD/Blu-ray player and connect to the Internet without being tied to a cable. That works because the industry came together years ago to define common technical standards that every firm can use to build compatible products for video and Wi-Fi.Motorola and all the other firms that contributed to these standards also made a promise to one another: that if they had any patents essential to the standards, they would make their patents available on fair and reasonable terms, and would not use them to block competitors from shipping their products.
Motorola has broken its promise. Motorola is on a path to use standard essential patents to kill video on the Web, and Google as its new owner doesn’t seem to be willing to change course.
In legal proceedings on both sides of the Atlantic, Motorola is demanding that Microsoft take its products off the market, or else remove their standards-based ability to play video and connect wirelessly. The only basis for these actions is that these products implement industry standards, on which Motorola claims patents. Yet when the industry adopted these standards, we all were counting on Motorola and every contributor to live up to their promises. Watching video on the Web is one of the primary uses of computers these days. And we’ve all grown accustomed to “anytime, anywhere” access to the Internet, often made possible by the Wi-Fi standard. Imagine what a step back it would be if we could no longer watch videos on our computing devices or connect via Wi-Fi, or if only some products, but not others, had these capabilities. That would defeat the whole purpose of an industry standard.
The European Commission and the U.S. Department of Justice are both focused on this problem. At the urging of competition law officials, Microsoft recently announced that it will not seek injunctions against other firms’ products on the basis of standard essential products (and Microsoft had never done so). Apple and Cisco made similar statements. Unfortunately, Google refused. Not surprisingly, the European Commission does not seem to be satisfied. Joaquin Almunia, the European Union’s Competition Commissioner, said “I can assure you that the Commission will take further action if warranted to ensure that the use of standard essential patents by all players in the sector is fully compliant with EU competition law and with the FRAND commitments given to standard setting organisations.” The Department of Justice issued a similar statement. We know other companies in the industry share our concerns. Last week, Apple filed its own complaint against Motorola with the European Commission.
There is an obvious way out of all this. Motorola should honor its promises, and make its standard essential patents available on fair, reasonable and nondiscriminatory (FRAND) terms. Microsoft is certainly prepared to pay a fair and reasonable price for use of others’ intellectual property. Within just the past few years, Microsoft has entered into more than a thousand patent licenses. We know how it’s done.
Unfortunately, Motorola has refused to make its patents available at anything remotely close to a reasonable price. For a $1,000 laptop, Motorola is demanding that Microsoft pay a royalty of $22.50 for its 50 patents on the video standard, called H.264. As it turns out, there are at least 2,300 other patents needed to implement this standard. They are available from a group of 29 companies that came together to offer their H.264 patents to the industry on FRAND terms. Microsoft’s patent royalty to this group on that $1,000 laptop?
Two cents.
That’s right. Just 2 cents for use of more than 2,300 patents. (Windows qualifies for a nice volume discount, but no firm has to pay more than 20 cents per unit.) Motorola is demanding that Microsoft pay more than 1,000 times that for use of just 50 patents.
And that is for a mid-level, $1,000 laptop. For a $2,000 laptop, Motorola is demanding double the royalty - $45. Windows is the same on both laptops, and so is the video support in Windows. But the high-end laptop will have a bigger hard drive, more memory, perhaps a titanium case—and Motorola is demanding a hefty royalty on all of this, even though none of these features implements Motorola’s video patents.
Imagine if every firm acted like Motorola. Windows implements more than 60 standards, and a PC supports about 200. If every firm priced its standard essential patents like Motorola, the cost of the patents would be greater than all the other costs combined in making PCs, tablets, smartphones and other devices. Obviously, this would greatly increase the prices of these devices for consumers.
How does Motorola justify this pricing, for so few patents? In German court proceedings earlier this month, Motorola’s economics expert likened Motorola’s patents to bullets: “It only takes one bullet to kill,” he testified. At least we know what this particular lawsuit is trying to accomplish.
Google says that it is just trying to protect manufacturers of Android devices against patent actions by Microsoft and others. But there are big differences between Google’s approach and Microsoft’s. Microsoft is not seeking to block Android manufacturers from shipping products on the basis of standard essential patents. Rather, Microsoft is focused on infringement of patents that it has not contributed to any industry standard. And Microsoft is making its patents—standard essential and otherwise—available to all Android manufacturers on fair and reasonable terms. In fact, more than 70 percent of Android devices are now licensed to use Microsoft’s patent portfolio.
Google has a chance to make a change. For a company so publicly committed to protecting the Internet, one might expect them to join the growing consensus against using standard essential patents to block products. Every firm that is willing to pay a fair royalty ought to be able to implement industry standards. Adherence to this basic point is essential to keeping computer costs down and preserving the Internet as an open, interoperable platform.
Google’s unwillingness so far to make this commitment is very concerning. That’s why you can pretty well count on a chorus from across the industry: “Google: Please don’t kill video on the Web.”
Comments
Anonymous
January 01, 2003
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February 22, 2012
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February 22, 2012
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February 22, 2012
The crow calling the kettle black. For years Microsoft tried to force its own, proprietary data formats onto the market, denying virtually everyone to create or edit documents in those format. Now that has failed an Microsoft is crying foul play because it has to accomodate with other players. Now, I'm not a fan of patents or proprietary data formats. But I'm not above 'Schadenfreude' when I see a unrepentend monopolist suffer because of aforementioned concepts. Huh, Microsoft. Betcha would've supported Ogg or WebM if you'd known that before.Anonymous
February 22, 2012
What I could imagine: Google is also just searching for a way to push WebM!Anonymous
February 22, 2012
The fact is that if Microsoft were doing this to someone, say... the Android OS, they wouldn't be crying foul. Look at the suit with Barnes and Noble as a great example.Anonymous
February 22, 2012
And HOW much do you ask in for royalties for an Android Phone? If I'm not mistaken, the percentage is actually MUCH HIGHER than what Motorola is asking for (when you don't factor in phone subsidizing). You are just as guilty as Motorola in this situation. Stop playing the victim.Anonymous
February 22, 2012
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February 22, 2012
Stop charging for Android patent use and I'm sure things will resolve themselves!Anonymous
February 22, 2012
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February 22, 2012
... or is it just that Google/Motorola wants more money from you for using these patents? It's not that Microsoft would give away their patents for free... In any case, we should abolish patentability for these kind of things, that would be in the interest of everybody.Anonymous
February 22, 2012
Microsoft: please stop making more money from Android than from Windows phones... At least now Microsoft might stop vampirizing Android...Anonymous
February 22, 2012
Isn't it true that Motorola offered Microsoft a license to its patents and Microsoft refused to even discuss taking a license? What, then, should a company in Motorola's situation do? Say, "OK, Microsoft. Continue to infringe, we don't mind," and then walk away, tail between legs? Please. Microsoft hasn't changed since the 1990's. They're still playing the same old game. Destroy competition - not by making better products - but by subverting the system.Anonymous
February 22, 2012
Sorry Microsoft, I don't feel sorry for you. You're suing Android manufacturers over patents, and now you're crying foul when someone turns around and does the same to you? Sorry but look for pity elsewhere. Maybe if you hadn't gone and sued every Android manufacturer then Motorola Mobility (now owned by Google) wouldn't be suing everyone over the patents they now own. Remember, what goes around comes around. If anything does come out this, I hope it's an overhaul of the patent system because lawsuits like the ones everyone is filing over patents is only hindering innovation.Anonymous
February 22, 2012
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February 22, 2012
These companies are acting like a bunch of toddlers. This is why the world's economy seems to have Schizophrenia, businesses can not compete solely on their ability to make a valuable product anymore and have to spend half of their cash flow on lawyers defending and attacking each other in court which has no value to anything or anyone except the lawyers.Anonymous
February 22, 2012
This is why no one takes Microsoft seriously anymore. Microsoft wants to charge outrageous royalties, but doesn't like when they are given a taste of their own medicine. Microsoft will just never gain any respect. Ever.Anonymous
February 22, 2012
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February 22, 2012
Come on Microsoft. You are leeching money from android manufacturers and then you cry foul for this? Wow. You really are something.Anonymous
February 22, 2012
So the Bully is getting Bullied and cries about it. Sounds about right. See Barnes and Nobles and the ridiculous patents you're suing them for you Patent Trolls. I'll never buy anything Microsoft again.Anonymous
February 22, 2012
Yet another reason not to use patent encumbered formats, use open formats like Ogg Theora, Ogg Vorbis, and WebM.Anonymous
February 22, 2012
Of course you don't want to block sales of Android devices, you make too much money off them.Anonymous
February 22, 2012
I think patent issues comes back and biting you. Ask barnes and noble and other android manufacturer about another face of MS. Google, after all, behind webm -- which is free and open and infact provided plugin for IE. I think only way to stop MS is to play by it's own rule. So MS stop suing other companies with your SW patents, they will stop suing you. First reason for buying moto is it's patents and you forced them to buy and they are using it against you. I am sure Moto is not going against Linux or any good citizens.Anonymous
February 22, 2012
You are really funny. MS whining about someone playing the software patent game. Best joke this week. Thanks!Anonymous
February 22, 2012
Google should make a video of the Microsoft extortionists trying to shake down every Android OEM into paying for frivolous prior art laden MS patents. You are nothing buy hypocrites. Cheering the broken patent system when it suits you and crying when you're getting beaten by your own game.Anonymous
February 22, 2012
Motorola has to pay patent protection from Microsoft on things like Android, so they have to raise prices for everything. Sorry Microsoft, but you get what you dish out.Anonymous
February 22, 2012
Microsoft and Apple want to sue companies using Linux/Android on mobile/tablets/desktops? Are you joking me? Microsoft/Apple think they can try to block Linux sales? Give us a break! This is a joke! Microsoft must immediately cancel all lawsuits and give up their bogus PR marketing camapaign about Microsoft needing to be paid bogus royalties for Android, give it up! Microsoft does not own Linux! Microsoft does not put a price on free software! Once Microsoft/Apple stop suing Android startups and giant Android companies, then at that point it'd make sense for Android companies, Google included, but there are also 1000 other Android companies, they can combined stop their counter-attacks. You can opt for the nuclear option and you can opt for trying your bogus marketing campaigns about FRAND patents, or you can simply give up and let Linux/Android be free if it wants to be free.Anonymous
February 22, 2012
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February 22, 2012
hummmm... cobrar pelo Android pode, mas cobrar DELES por uma tecnologia que não é deles não pode né?! .... Microsot desesperada, pois nunca criou nem inventou nada, vivi de meter medo e cometer crimes. .... ======================================================= hummmm ... can charge for Android, but charge THEM for a technology that is not theirs can not huh? .... Microsot desperate, because they never create or invent anything, I lived a scary and committing crimes.Anonymous
February 22, 2012
Microsoft, you snivelling swine, try and keep your back straight for once. You claimed "licensing is the solution" in blogs.technet.com/.../android-patent-infringement-licensing-is-the-solution.aspx because, as Mr. Guiterez says, "By bringing this case, we are protecting our investments on behalf of our customers, partners and shareholders – just as other companies do." So, just pay your fees, "just as other companies do."Anonymous
February 22, 2012
Uma vez um sábio Juiz do trabalho falou para um empresário que não aceitava pagar o valor devido ao ex-funcionário: Sr. Manolo, Quem não pode pagar seus funcionários e encargos, faz como ele, trabalha pros outros! ================================================================ Once a wise judge of the work spoke to a businessman who refused to pay the amount due the former employee: Mr. Manolo, who can not pay its employees and charges, as he does, it works for others!Anonymous
February 22, 2012
I can't even form a sentence to explain how stupid this is. Google is not "killing" video. Google is "killing" microsoft. And good riddance.Anonymous
February 22, 2012
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February 22, 2012
"Microsoft on the Issues" ?!!? Riiiiggghhhht. Not a home for Mr ObjectivityAnonymous
February 22, 2012
Man so much IGNORANCE in this comment section. Some of you are claiming that Motorola's behavior is fine because MS charges an equal amount for their patents to Android OEMs. What makes you think MS submitted their patents to a standard under FRAND? GENIUSES if you want to charge 2.5% for something don't submit it to a standards board and don't put it under FRAND. There are over 2000 patents in H264 if all the patent owners (including Apple and MS) started asking for similar pricing to Motorola's what good would come of this? Why do you guys feel Motorola is entitled to 2.5% over all the other patent owners? Why do I feel MS is entitled to whatever they charge OEMs? because their patents aren't part of some standard and are not licensed under FRAND. SIMPLE.Anonymous
February 22, 2012
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February 22, 2012
Tell us again what are the royalties you're charging for Android phones.Anonymous
February 22, 2012
"Don't Be Evil"Anonymous
February 22, 2012
Software patents are evil. By law you can't patent an algorythm. Isn't that what software is, an algorythm?Anonymous
February 22, 2012
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February 22, 2012
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February 22, 2012
H.264 needs to die anyway. Microsoft and Apple should embrace the open source alternative WebM. It's the best for the Internet going forward.Anonymous
February 22, 2012
Yet Microsoft has no issues with charge large amounts for patents on Android. And many more Androids are sold then Windows! Doesn't seem to be so keen on giving "bulk" discounts when the shoe is on the other foot. Microsoft doesn't even have to licence H264, there are many other codecs available include those made by Microsoft and Google.Anonymous
February 22, 2012
too bad i can't post it on G+....Anonymous
February 22, 2012
Since Microsoft charges $12-15 per Android device for 5 patents, this seems actually quite reasonable. 50 patents really should cost $120-150 right?Anonymous
February 22, 2012
/don't read article: "DOWN WITH MICROSOFT !!!!" (derp)Anonymous
February 22, 2012
Don't be a *** Microsoft, you started the game so in urban slang "don't hate the playa hate the game".Anonymous
February 22, 2012
Down with the patents up with open standards enough saidAnonymous
February 22, 2012
What ever happened to Dont be Evil. You've changed google.Anonymous
February 22, 2012
@Google: let them burn!Anonymous
February 22, 2012
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February 23, 2012
And how much does MS make from every single Android phone?Anonymous
February 23, 2012
Sounds like you guys have a bigger problem with software patents in general. May you should work at getting rid of those. Also, don't you guys get paid every time an Android device is sold?Anonymous
February 23, 2012
fast math here from B&N case. 5 patents 11$, so 11$/5 = 2.2$ per patent. Motorola should ask same price from Microsoft, that is 50*2.2 = 110$. And Microsoft is complaining that they have to pay when they get 505 discount?Anonymous
February 23, 2012
"Google has a chance to make a change. For a company so publicly committed to protecting the Internet, one might expect them to join the growing consensus against using standard essential patents to block products. Every firm that is willing to pay a fair royalty ought to be able to implement industry standards. Adherence to this basic point is essential to keeping computer costs down and preserving the Internet as an open, interoperable platform." Why do you say the opposite here: "blogs.technet.com/.../our-licensing-deal-with-samsung-how-ip-drives-innovation-and-collaboration.aspx" "We recognize that some businesses and commentators – Google chief among them – have complained about the potential impact of patents on Android and software innovation. To them, we say this: look at today’s announcement. If industry leaders such as Samsung and HTC can enter into these agreements, doesn’t this provide a clear path forward?" And the latter agreement is on an NDA. I cannot keep from wonder why you at Microsoft feels that Motorola cannot license it's patents the same "discriminatory" way as you yourselves does?Anonymous
February 23, 2012
So first you sue everybody for infringements, then suddenly when you're at the wrong end of the stick you call for mommy? I'm losing all the respect for Microsoft I've been gaining back. MICROSOFT: YOU'RE DOING IT WRONG!Anonymous
February 23, 2012
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February 23, 2012
Dave, you are a hypocrite. Hypocrite, hypocrite, hypocrite.Anonymous
February 23, 2012
@Mike Dimmick: You said 'There is every chance that some of these patents, or others we don't know about, are actually infringed by both the current WebM implementation, or by any potential independent implementation or modifications to the original. Better the devil you know.' Given that google has already done an extensive patent search on webM AND given the mpeg-LA has not filed suit against them, its unlikely that 'some of these patents' apply. And the situation for 'others we don't know about' is exactly the same for h264. So your whole argument is FUD.Anonymous
February 23, 2012
As far I know you guys win more money from royalties from Android manufacturers than from Windows Phone, right?Anonymous
February 23, 2012
Wow, these comments... Pure infantilism.Anonymous
February 23, 2012
Well maybe Microsoft is paying a % for the patents fees charged to Android? And Google needs to push WebMAnonymous
February 23, 2012
Microsoft is in campaign to attack Google. I strongly think they are loosing clients.Anonymous
February 23, 2012
Oh wait... but you guys don't do the same with Android phones?Anonymous
February 23, 2012
lol Google think they are being smart, but they are just slowing digging their own antitrust grave.Anonymous
February 23, 2012
It's incredibly sad how many clues people are commenting here without having slightest idea what all this is about and what standard essential patents are.Anonymous
February 23, 2012
Apparently you didn't notice that there are hardware patents that Moto is suing about.Anonymous
February 23, 2012
Microsoft, you created this software patent mess. You dug your grave now get it in it. If instead of pushing proprietary codecs and protocols you used open and technologies not wrapped up in software patents there wouldn't be a problem here. MS you are irrelevant in new technology.Anonymous
February 23, 2012
Google is a thief. /endAnonymous
February 23, 2012
Come on Google, destroy video on Internet! This is too funny! Google is starting show its true colors. Next, Google will charge you for using Andriod then for Searching. For those that think Google can do no wrong, just wait, they are just starting...Anonymous
February 23, 2012
Just drop the M$ Android/Linux/FAT taxes and I am sure Motorola will drop the price. WebM is the future of video, h264 is just the present.Anonymous
February 23, 2012
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February 23, 2012
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February 23, 2012
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February 23, 2012
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February 23, 2012
Ok, so h264 is patent encumbered, how about using webm, ogg vorbis, etc.?Anonymous
February 23, 2012
Serious question, here: if I want to write a FOSS implementation of H.264, how can I (realistically) do that? H.264 already kills Video on the Web, at least in jurisdictions that respect software patents.Anonymous
February 23, 2012
This is hilarious. Payback's a *** isn't it.Anonymous
February 23, 2012
Are you guys kidding? Ignore that the complaint comes from Microsoft. The source doesn't matter. Who do you think is going to way for these extra costs, Microsoft? Guess again, they'll just pass these costs on to the consumer. The question is, who are you rooting for? Sounds like Motorolla's, I mean Google's shareholders. Google is clearly in the wrong, they are required by law to license these FRAND patents for a reasonable fee, not blackmail. Think people,Anonymous
February 23, 2012
Let me sum up this article in one word: WAAAAAAAAAAAAAHHH!!!Anonymous
February 24, 2012
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February 24, 2012
The European Court of Justice will kick the *** out of Google. They are not stupid. Ironically it seems like Google is evil now.Anonymous
February 24, 2012
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February 24, 2012
"The source doesn't matter. Who do you think is going to pay for these extra costs? Microsoft? Guess again, they'll just pass these costs on to the consumer. The question is, who are you rooting for?" Without declaring right or wrong, it should be obvious that Motorola *** Google has no intention of ever actually collecting on these licensing demands. This is nothing more than a negotiating exercise to get Microsoft to flog off about Android. It is incredibly hard to feel sorry for Microsoft -- just look at the ridiculous extortion of Barnes and Noble (a cost born by consumers).Anonymous
February 24, 2012
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February 24, 2012
hurray for free webm (made free by google) down with h.264 (down of h.264 made possible by the help of google) M$ plz do not be cry-baby, the time has come for free standards like webm thanks google thanks google thanks google for webm This article was a peice of ***, without even any mention of H.264 vs webm debate in which context this decision by google was made.Anonymous
February 24, 2012
I am skeptical about the argument of this post. Microsoft doesn't exactly have a spotless track record on the issue. "Industry standards" have, in the past, been used as a code word for, "Proprietary Microsoft standards, for which interoperability by competitors is prohibited or purposefully made impractical." In that context, "We know how it’s done." sounds especially creepy.Anonymous
February 24, 2012
ms go make software, stop trolling with patentsAnonymous
February 24, 2012
There's this old story about a boy named Peter who cried "Wolf!" once too many. Clearly, here we have a different story. This time, it's the wolf complaining about Peter yelling. Patents are evil. MS and Motorola are both patent abusers of the worst kind. Why not have'em settle it in a tank duel on a remote island somewhere, while the rest of us leave software patents in the smelly landfills of bad idea-history?Anonymous
February 24, 2012
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February 26, 2012
They are not trying to block sales of any of your products. They are merely asking that you pay fairly to use their patents. Just like Android product manufacturers have to pay to use your patents. Fair is fair.Anonymous
February 27, 2012
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February 28, 2012
I am not a big fan of Microsoft or Apple. In fact I am kind of disappointed with Google and android. Having said that I do approve of what Google is trying to do with Android and I like the entire philosophy and hope it does well despite the fact that I have been mostly happier with products of the old behemoths. Despite this though it does seem that Motorola do not really have any leverage here. 2.25% of eventual sales price is a ludicrous royalty for what is supposed to be an industry standard patent. I do quite like to see Microsoft squirm but I find it hard to believe that Motorola actually mean this seriously. The claim must be simply to make a statement about the state of the patent system because otherwise it is only recklessly bringing the attention of the anti-competition authorities for no reason.Anonymous
February 28, 2012
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March 04, 2012
This is a bit rich from Microsoft which has become a toll collector for Android devices. Perhaps Microsoft ought to remove the plank from their eye before removing a spec of dust from Google's. The real solution is the abolition of software patents. They don't promote innovation, they only enrich lawyers as we see in this case.Anonymous
March 07, 2012
i want free antina t.v. back, and all of it's wave links, with c.b. radio.Anonymous
March 15, 2012
How about working to get rid of all software patents and making all software unpatentable? This situation right there is the reason for doing that. It would be awesome if Google persisted to finally achieve this goal.Anonymous
March 18, 2012
M$ hates when others play against it with the rules it has established long ago... It's the name of the M$ game....Anonymous
March 19, 2012
what you're calling a standard is not a standard. h264 is not a standard and there are many other codecs available on a royalty free bassis, like Google's WebM or Xiph.org Theora. Looks like M$ lobbying against a free and open standard for video streaming is turning against self. Maybe it'll serve as good advice next time...Anonymous
March 22, 2012
google is the best search engine on web.Anonymous
March 24, 2012
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May 29, 2012
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May 31, 2012
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November 02, 2012
Too bad microsift was nowhere to be heard when its darling MPEG-LA was destructively and illegally manipulating the share prices of On2 Twechnologies' stock--for more than half a decade! SPLF