Microsoft’s Android Shakedown: IBM Did It First

Forbes’ Timothy B. Lee has dug up a remarkable piece of history regarding IBM and Sun Microsystems that’s an almost one-to-one copy of the situation between Microsoft and Android. Thirty years ago, IBM knocked on Sun’s door. We’ve got some patents, IBM said. Please pay up.

We’re talking the 1980s, and Sun is still a relatively small start up. Gary L. Reback is a lawyer at the company when fourteen IBM employees in blue suits show up at Sun’s doorstep, carrying with them seven patents they claimed Sun was infringing upon. The IBM men, dressed in dark blue suits, held a presentation about the seven patents. Sun’s employees present in the conference room, people with engineering and law degrees, were stunned. Sun confronted the men from IBM: “Only one of the seven IBM patents would be deemed valid by a court, and no rational court would find that Sun’s technology infringed even that one.”

An awkward silence ensued. The blue suits did not even confer among themselves. They just sat there, stonelike. Finally, the chief suit responded. “OK,” he said, “maybe you don’t infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?”

After a modest bit of negotiation, Sun cut IBM a check, and the blue suits went to the next company on their hit list.

This is the story as told by Reback himself, on Forbes’ website, back in 2002. This story was dug up by Timothy B. Lee a few weeks ago, but I decided to keep it in the queue until the patent news had died off a bit. In any case, the similarities with the current Microsoft v. Android are tantalisingly similar.

“[Microsoft is] visiting Android licensees and giving the same sales pitch Reback remembers from a quarter century ago. ‘Do you really want us to go back to Redmond and find patents you infringe? Or do you want to make this easy and just pay us?’ Once again, many of the targets are writing checks to make the problem go away,” Lee notes.

As far as I’m concerned, this should be criminal behaviour. It’s quite clear that Microsoft is abusing the patent system to fight Android, instead of actually competing on merit. This is quite infuriating to those of us who want competition to be fair and honest – instead of companies abusing patents (software patents, no less) – to block others from entering the marketplace.

You may wonder why politicians in the US are oh so relatively silent about this issue – even though it’s become quite clear that especially software patents hinder competition, and constitute the biggest threat to the technology world. Well, as Reback explains – the USPTO is actually a cash cow. And which politician is going to kill a cash cow, especially now that the US is utterly, utterly flat broke?

“During the first Clinton Administration, for example, USPTO Director Bruce Lehman attempted to deflect criticism of the USPTO’s practices by traveling around the country with a chart showing precisely how much revenue the USPTO raised for the federal treasury,” Reback details, “Lehman’s approach shocked many in the technology community. ‘It’s like he’s bragging about the amount of money he brought in selling plots of land in Yosemite’, marveled a Silicon Valley executive.”

“Worse, Congress recognized in the patent system a revenue source and began lifting a portion of USPTO fees to subsidize profligate spending,” he adds, “The USPTO became the federal government’s cash cow.”

It would appear that not only is the US patent system a huge threat to the technology industry, it has also firmly entrenched itself as a cash-generating institution no “sane” politician would butcher in the current US economic climate. It would appear that the patent system will continue to harm innovation in the technology world for a considerable amount of time to come.


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