Google Inc. (GOOG) Chairman Eric Schmidt said the $12.5 billion acquisition of Motorola Mobility Holdings Inc. may spur competition among phone makers using its Android software, and the company won’t play favorites with its partners.
“The Android ecosystem is the No. 1 priority, and we won’t do anything with Motorola, or anybody else by the way, that would screw up the dynamics of that industry,” Schmidt said in an Oct. 1 interview with Bloomberg Television’s Erik Schatzker in Nantucket, Massachusetts.
Schmidt also said the 17,000 patents Google is gaining in the Motorola deal will “bulk up” its intellectual property and ultimately end legal battles among competitors in the $207 billion mobile-phone market. His comments come after analysts raised concerns that the Mountain View, California- based company’s August announcement of its biggest acquisition had made it a competitor to its own handset partners.
Research firm Gartner Inc.’s Michael Gartenberg said the purchase was a “nightmare scenario” for handset manufacturers using the Android platform. Samsung Electronics Co. and HTC Corp. (2498) have phones running on Android.
Handset makers, which have been building devices with Google’s operating system since 2008, may have a harder time cranking out bestselling devices because Motorola Mobility may get earlier access to the newest technology, said Gartenberg, based in San Jose, California.
Schmidt is looking to Android to help the owner of the world’s most-popular search engine challenge Apple Inc. and Microsoft Corp. (MSFT) as more users access the Internet from mobile devices.
In August, Google accused Microsoft, based in Redmond, Washington, and Oracle Corp., based in Redwood City, California, of waging a “hostile, organized campaign” against its Android mobile software. Apple, Microsoft and Google have ramped up spending on patent portfolios in recent months to gain exclusive rights to a broadening array of technology, much of it used in smartphones.
As bidding intensifies, prices for patents are surging, fueling concerns that portfolios are overvalued. Oracle sued Google last year, accusing it of patent infringement over the use of Java technology used in Android.
“From our perspective, we will end up having enough patents that we can end up with a rough truce with everybody else, which is how it’s done,” Schmidt said of Google’s plan to “bulk up” on patents. “That’s been the pattern in all other industries, and I’d expect something similar in ours.”
It’s “hard to know” when a truce might be reached, Schmidt said. Motorola’s patent portfolio wasn’t the most important factor in deciding to purchase the Libertyville, Illinois-based company, he said.
A group that includes Cupertino, California-based Apple and Microsoft beat out Google in June with a $4.5 billion bid for patents previously owned by Nortel Networks Corp., based in Mississauga, Canada.
Rivals are “banding together” to purchase patents they can use to charge fees that will make Android devices more expensive, David Drummond, Google’s chief legal officer, said in August.
“The majority of the reasoning had to do with the fact that we benefit by having a hardware partner at Google who knows how to build the next generation of tablets and phones,” Schmidt said.
SEC Asked Apple for Information on Nokia Patent Settlement
The U.S. Securities and Exchange Commission asked Apple Inc. (AAPL)’s Chief Financial Officer Peter Oppenheimer for information on the financial terms of a patent litigation settlement with Nokia Oyj. (NOK1V)
The SEC requested details of the settlement agreement including any amounts accrued, the periods in which they were recognized and the timeline of negotiations in a June 28 letter to the company released in a regulatory filing yesterday. Apple said “no aspects of the company’s discussions with Nokia were material to the company’s consolidated financial statements” in a July 12 letter to the SEC released in a separate filing today.
Nokia won an almost two-year patent dispute with Apple, in a settlement that awards a one-time payment and royalties to the Finnish handset maker, Nokia said in June. Details of the contract are confidential, Nokia said at the time.
Mark Durrant, a Nokia spokesman, Steve Dowling, an Apple spokesman, and John Nester, a spokesman for the SEC, all declined to comment.
The two mobile-phone makers had been in litigation since October 2009, when Nokia filed a lawsuit accusing Cupertino, California-based Apple of infringing patents. Nokia also demanded royalties on the millions of Apple iPhones sold since the device’s introduction in 2007. Nokia said in March it had 46 patents asserted against Apple in civil lawsuits and complaints lodged with the U.S. International Trade Commission.
Nokia’s first claims covered technology for wireless data, speech coding, security and encryption. Subsequent claims asserted rights to wiping gestures on a touchscreen and on- device application stores, both of which Nokia said it filed to patent more than 10 years before the iPhone launch.
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Easyjet Founder’s Name for New Airline Sought by Other Applicant
The day after he said he would start a new airline to be named “FastJet,” someone not connected to the venture applied to register “Fast Jet Limited” as a trademark in the U.K., according to the magazine.
Haji-Ioannou has said he didn’t know who filed the application and is discussing the issue with legal counsel, the magazine reported.
He hasn’t himself filed a trademark application, although Haji-Ioannou has set up the www.fastjet.com domain name, according to Marketing Magazine.
Australian Showman Claims His ‘Snakeman’ Trademark Infringed
The operator of a traveling snake show has demanded that a volunteer snake-catcher quit using “the snakeman” and has demanded that local newspapers remove any references to the snake-catcher under that name, the Linsmore, Australia, Northern Star newspaper reported.
Raymond Hoser, of Australia’s state of Victoria, told the Northern Star he registered “the snakeman” as a trademark and has been using the name for 40 years.
He objected to the use of the name by George Ellis, who helps residents of Northern Rivers deal with an annual snake problem, the newspaper reported.
Ellis told the newspaper he uses “George the snakeman” and he can’t see what the fuss is all about because he only does his snake-removal work as an unpaid volunteer.
Progressive, Allstate Settle Trademark and Patent Dispute
Progressive Casualty Insurance Co. and Allstate Corp. (ALL)’s Allstate Insurance Co. have settled a trademark and patent infringement suit, according to a statement from Mayfield Village, Ohio-based Progressive.
The Ohio company sued Allstate in federal court in Cleveland, Ohio, Jan. 12. Progressive claimed Northbrook, Illinois-based Allstate’s use of “Drive Wise” infringed its “Drive” trademark.
Additionally, Progressive alleged that its patents 6,064,970, 7,124,088 and 7,077,269 were infringed. The first patent -- 6,064,970 -- is related to the calculation of an insurance rate based on data provided by an electronic device plugged into a vehicle that reports speed, braking, mileage and driving time of day. Progressive is presently offering discounted insurance rates to drivers who attach a “Snapshot” plug-in device to their vehicles.
Although most terms of the settlement weren’t disclosed, Allstate has taken a license to Progressive’s “usage-based insurance and policy-servicing patent portfolios,” and the two companies have entered into a trademark co-existence agreement with reference to the “Drive” and “Drive Wise” trademarks.
The case is Progressive Casualty Insurance Co. v. Allstate Insurance Co., 1:11-cv-00082-BYP, U.S. District Court, Northern District of Ohio (Cleveland).
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Songwriters Rejected by U.S. High Court in Yahoo Royalty Fight
The U.S. Supreme Court let stand a ruling that limits the royalties Internet companies including Yahoo! Inc. and RealNetworks Inc. (RNWK) must pay to songwriters on downloaded music.
The justices yesterday turned away an appeal by the American Society of Composers, Authors and Publishers, or ASCAP, which licenses about 45 percent of the musical works played online.
ASCAP sought to overturn a ruling that the group said in court papers would cost its 295,000 members tens of millions of dollars a year.
A federal appeals court in New York ruled that the downloading of a musical work isn’t a “public performance” covered under the U.S. copyright laws. That reasoning meant ASCAP couldn’t seek compensation on behalf of its members for the act of downloading, though copyright owners can still demand royalties for the new copies of a song that are created.
The dispute landed in court after ASCAP couldn’t reach licensing agreements with Yahoo and RealNetworks. ASCAP then invoked a procedure set up decades ago under a settlement with the Justice Department, asking a federal judge in Manhattan to determine what licensing fees would be reasonable.
The case is American Society of Composers, Authors and Publishers v. United States, 10-1337.
UMG, ‘50 Cent’ Win Dismissal of ‘Before I Self Destruct’ Suit
Shadrach Winstead sued the music company and 50 Cent for copyright infringement in federal court in Newark, New Jersey, November 2010. He claimed his copyright for his book “The Preachers Son - But the Streets Turned Me Into a Gangster” were infringed by the film and album “Before I Self Destruct.”
He argued that the film and album had many similarities to his book, and that the defendants had access to the book before its publication.
U.S. District Judge Stanley R. Chesler said he failed to see the connections. He noted that while Winstead’s book and the film shared similar characters, themes and setting, “numerous” movies and television programs have covered the same landscape. He also noted that “a simple viewing of the two works reveals that they are entirely different with respect to plot, mood and sequence of events.”
The book covered a character’s “rise above a life of violence to achieve redemption,” he said, while the film portrayed its lead character’s “descent into moral apathy and eventual death.”
Judge Chesler also rejected Winstead’s claim that the film contained “direct phrases” from the book that were protected under copyright law. In dismissing the case, he said the language Winstead claimed was protected “merely amounts to generic short words and phrases, common in gangster movies and hip hop music.”
The case is Shadrach Winstead v. Curtis Jackson, 2:10-cv- 05783-SRC-MAS, U.S. District Court, District of New Jersey (Newark).
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To contact the reporter on this story: Victoria Slind-Flor in Oakland, California, at firstname.lastname@example.org.
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