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Apple's HTC patent lawsuit is a bluff

By Joe Wilcox, Betanews

Now that buzz about Apple's patent lawsuit against HTC has quieted a bit, I'm ready to pipe in with some contrarian analysis. I agree with other pundits suggesting that the lawsuit is competition by litigation, where Apple hopes to scare off mobile manufacturers from licensing Android. Surely some handset manufacturers will pull back, but they would be foolish to do so. For other existing and potential Android licensees, the lawsuit is a get out of jail free card. Apple's patent case should embolden, not restrain them. There may never to be a better time to license Android than now.

Apple claims infringement of 20 patents related to iPhone's user interface. Engadget's March 2nd patent breakdown is a must-read clinical analysis. But there's more to competition by litigation than the actual patents. Lawsuits often aren't so much about what's right but what lawyers think they can prove; often the winner tells the more believable story, even in patent cases. Similarly, much strategy goes into lawsuits -- how they're presented, where they're filed and when. Then, of course, there is whom. In this case, Apple took on HTC and not Google. Now why is that?

Apple's initial goals have little to do with protecting intellectual property as much as scaring away competitors. I hone in on this because Apple chose not to sue Google, Android's major developer, but instead the largest licensee of the mobile operating system. HTC's Sense UI gives Apple a bit more range to single out the one manufacturer, but based on various analyses of the patents that's more bark than bite.

Why not sue Google? I'll give eight primary reasons:

1) Apple potentially gains more by scaring off potential Android licensees than engaging in a protracted patent lawsuit. It's easier and more effective to raise bluster (and loads of free press) by engaging HTC than Google. Meanwhile, Apple can drag out the lawsuit as a distraction for HTC and other (frightened) Android licensees -- for years.

2) Apple doesn't want to take on Google, which already has come to HTC's defense. Google would fiercely fight Apple, understanding that mobile devices are the future of search and advertising.

3) Apple needs Google more than Google needs Apple. Unless Apple is willing to switch to Bing -- not a good idea considering iPhone buyer demographics -- Google search and maps are a necessary evil. If Google is willing to play tough with China, Apple is easy enough for Google to snuff off. Apple won't take on Google from a weaker position.

4) HTC is somewhat disadvantaged, being a Taiwan-based company. Google has home-court advantage (like Apple), making it a much more formidable opponent than HTC.

5) Patent lawsuits take years to resolve, hence Apple's separate complaint with the International Trade Commission. Again, Apple is using scare tactics to psychologically attack existing and potential Android licensees. So, this is quite similar to No. 1.

6) The patent claims are likely not as sure as they appear. Since most of the claims are really about Android, Google is the more sensible target of any lawsuit. If Apple lawyers were truly confident of winning against Google -- and in reasonable timeframe, they would file lawsuit against the search giant.

7) Android's open-source status creates all kinds of logistical and legal problems for Apple. The company really doesn't want to be labeled with a big Scarlet Letter as an open-source opponent. Apple has benefitted from open-source community development. It's a vocal group Apple doesn't want to piss off. Then there are all the nasty legal issues and potentially damaging precedents should Apple make a frontal open-source assault.

8) The iPhone-Android phone market looks much like the Mac-Windows PC market did in the 1980s and 1990s. Apple unsuccessfully sued Microsoft for infringing on Macintosh user-interface intellectual property. The lawsuit dragged on for years, ending in settlement in 1997. But what if in the early days of the Windows PC, Apple had sued clone king Compaq instead? Compaq was more vulnerable to a UI copyright claim than Microsoft, and other DOS/Windows licensees would have received the message to back off. By attacking HTC, Apple hopes to prevent a repeat "us against everyone else" scenario.

What Apple Fears

Apple has good reasons to fear Android. In the three months from December to February, Android's US smartphone subscriber share shot up from 2.8 perent to 7.1 percent. Worldwide, in 2009, Android smartphone market share -- based on sales -- rose from 0.5 percent to 3.9 percent, according to Gartner (The first Android phone, the T-Mobile G1, shipped in late 2008). Last month, Google CEO Eric Schmidt asserted that 60,000 Android handsets are shipping by the day.

All this circles back to my claim that the patent lawsuit is a bluff. My reasoning:

1) Apple chose HTC, not Google. There is no immediate risk to any patent claims against HTC. Since the real claims are against Google, Apple may find the court -- or even the ITC -- reluctant to rule against an Android licensee in good faith. There is perceived risk, but none in the short term, which is long enough for a united Android front to do market damage against iPhone -- particularly in emerging markets.

2) Apple filed against HTC and not other licensees. Apple had its chance to take on Android licensees, choosing instead to go after one. HTC is enough:

• If the claims are shaky.
• If Apple is looking for one case to establish precedent.
• If the more immediate objective is to scare off existing or would-be Android licensees.

HTC being enough for this lawsuit isn't enough to legally or even logistically hurt other Android licensees.

3) Apple is unlikely to sue other Android licensees anytime soon. A good legal strategy -- from cost and logistical perspectives -- is to make a single case. Rather than being afraid, existing and would-be Android licensees should feel emboldened by the HTC lawsuit. Behind the bluster, Apple has really given the all clear -- it's safe to go ahead; that's Apple's tell. Apple's bluff is meant to convince other licensees that they can't win; so they lay down their Android hands. Yes, Apple could file against other Android licensees, but the only immediate benefit would be to create more fear -- that licensees should fold their hands. Hardware manufacturers should look at Google's backing HTC; there is a heavy-sitting ally at the table across from Apple.

Bing gains show why Microsoft-Yahoo search deal is a dumb idea

By Joe Wilcox, Betanews

One of Microsoft's major justifications for the Yahoo search deal is scale. CEO Steve Ballmer has repeatedly asserted that greater scale would allow Microsoft to improve search accuracy. Just last week he told Search Marketing Expo West attendees: "The ability to put together Yahoo's volumes and Microsoft's volumes and use that in a way that improves the experience more, let's call it all involved parties, we think is absolutely fantastic."

But the scale argument presumes that Microsoft and Yahoo would combine search share. The deal is in place but not fully implemented, and already Microsoft's Bing is taking away search share from Yahoo -- not Google. In February, Bing's US search share reached 11.5 percent, up from 11.3 percent month over month, according to ComScore. Yahoo share declined to 16.8 percent from 17 percent during the same time period. In June 2009 -- the month before announcing their search deal -- Yahoo search share was 19.6 percent and Microsoft 8.4 percent. But Microsoft already was rising, because of the Bing launch and millions of dollars in supporting advertising. For perspective, Google search share was 65.5 percent in February and 65 percent in June 2009.

The Microsoft-Yahoo search deal is a dumb idea, for three main reasons:

1) Microsoft's marketing push behind Bing shows that share can be gained organically, without taking on the expense or logistical hassle of managing Yahoo's search business.

2) Microsoft search share gains foreshadow the inevitable: Microsoft-Yahoo combined search share will diminish rather than aggregate. Combined share would have been 28 percent in June 2009; 28.3 percent in February. At first blush, the numbers might seem encouraging for aggregated share but the cost is declining Yahoo share. Cannibalization is inevitable.

Also the ComScore share data is for search engines and doesn't include heavily searched cross-domains like YouTube. Americans conducted 9.9 billion searches at Google in February, 2.496 billion at Yahoo and 1.498 billion at Bing. YouTube (and a few other Google sites): 3.553 billion or about 30 percent more than Yahoo. If ComScore ranked YouTube like Google, Yahoo would be No. 3 in search share.

I first warned about flawed combined search share math about a year before (May 2007) Microsoft gave up its hostile Yahoo takeover: "There is no guarantee a Microsoft-Yahoo could successfully aggregate search share." Bing is more likely to cannibalize Yahoo share than combine with it over the next 12 months. In July 2009 I predicted: "Combined Microsoft-Yahoo share will be less than 20 percent within 12 months of the deal's closing." We'll see.

3) Search is -- or was -- Yahoo's crown jewel. Yahoo started as a search engine and remained a contender even as Google gained share. As I asserted in May 2008: "Removing search would be akin to lobotomizing Yahoo." That's essentially what the Microsoft search deal will do to Yahoo.

Yahoo's banner advertising business is still big, but its future is uncertain during the Microsoft search-take-over transition. Meanwhile, Google has added banner ads to YouTube and to mobile search.

Yahoo is little more than a beloved brand without search, particularly with CEO Carol Bartz dismantling the company's other prized assets. You know, little things like disbanding the mobile group earlier this week. Would someone please take away the axe from that woman!

So what do you think? Should Microsoft and Yahoo have cut that search deal? Please answer in comments.

Italy launches a beta of Microsoft Tags for tourism

By Tim Conneally, Betanews

Last week, I wrote a little article about Microsoft's four-color approach to QR black-and-white barcodes, the still-in-beta Microsoft Tag, which was also related to the company's first official Android application.

I only briefly touched upon the many things that are being done with QR codes: advertisements that you scan with your cell phone camera to pull up related content on the Web, business cards that you can scan for an instant call to the card's owner, or boxes that you can scan for an instant Web-based list of contents.

One area that I neglected to mention is tourism. For the last couple of years, more and more cities have begun to employ black-and-white QR codes as virtual tour guides. Historical sites and points of interest are being labeled with QR codes that tourists can scan with their mobile phones to obtain relevant information.

One of the first places that started using these codes was San Francisco, where restaurants were tagged with QR codes in the front window that linked to Citysearch listings and user-submitted reviews. Likewise, New York City's Gotham Tours has slapped yellow QR stickers all over Manhattan which provide more information about famous locations in the area.

The barcoding craze is now being picked up by tiny American towns that recognize it as a cheap way to keep tourists interested. This week, Long Beach, Washington (pop. 1,283 as of the last census) announced that it has tagged sites such as the "World's Longest Beach" arch, the "World's Largest" frying pan, the World Kite Museum & Hall of Fame, a gray whale skeleton, and a 20-foot tall bronze evergreen tree as scannable points of interest in its town. It may not be the most enriching stuff, but it has its uses.

Today, the Northern Italian city of Turin (Torino), site of the 2006 Winter Olympics, announced it has joined in on the craze as well. But it's the first city to use Microsoft's four-color HCCB Tags instead of the more common black and white QR codes. With the TagReader app, users can scan Tags around the National Museum of Cinema, Palazzo Madama, Museum of Oriental Art (MAO), Civic Gallery of Modern and Contemporary Art (GAM), and the Borgo and Rocca Medioevale Museum. All of these launch mobile browser pages with text information, video, or MP3 content.

Again, it's over: Microsoft loses second review of Word appeal

By Scott M. Fulton, III, Betanews

A permanent injunction against Microsoft selling versions of Word that contain XML editing ability effectively remains in place today, after a shot-in-the-dark appeal by Microsoft of its appeals loss last December was shot down Wednesday by the DC Circuit Court of Appeals.

Although Microsoft is no longer distributing versions of Word or Office with an XML editor that a jury found infringed upon the patents of former development partner i4i, it made a face-saving effort to change the record of history. Such a change would have shown that Microsoft did not borrow the ideas behind a Word plug-in that i4i demonstrated, for its own purposes, knowing that i4i held a patent on those ideas.

What may be more historically important about Wednesday's ruling -- which replaces the December ruling -- is that it may re-establish an older legal precedent with respect to patent infringement. Patent reformers, including Supreme Court judges, have been utilizing their own judiciary discretion with respect to a benchmark for damages. Legislation still on the table in Congress would change US patent law so that judges must estimate what a product would have been worth had it not been infringed upon, under normal market circumstances, in setting damages.

The reason many damage awards by juries reach into the hundreds of millions of dollars, using formulas that sometimes seem arbitrary, is because they agreed with plaintiffs' attorneys that the real-world damage is so great that any attempt to really estimate loss in monetary value is pointless. That was the case in the i4i trial, where in District Court, a jury decided there was no real formula for measuring the extent of Microsoft's transgression.

The problem considered with the District Court trial was that the base of the damages award was set at $200 million, a figure which admittedly came from a rough estimate of how many copies of Word that Microsoft probably sold during the period in question (2.1 million) times the amount of royalties i4i contended it should have received for each of those copies ($95). Microsoft argued against that formula for numerous reasons, including the fact that not all 2.1 million users of Office or Word would even see the XML editor function in question. Weighing against the need to consider the validity of that strict formula was the notion that i4i had suffered irreparable injury, which the law literally defines as something the law cannot define.

Specifically, i4i argued, Microsoft destroyed the relevant market, so that you couldn't measure it any more. Given that set of circumstances, how would it look for judges to go questioning the jury's formula on nickel-and-dime issues of royalties?

"The district court concluded that there were inadequate remedies at law to compensate i4i for its injury," wrote Judge Sharon Prost for the three-judge panel. "The district court found that before and after Microsoft began infringing, i4i produced and sold software that practiced the patented method. The district court found no evidence that i4i had previously licensed the patent, instead finding evidence that i4i sought to retain exclusive use of its invention. It was not an abuse of discretion for the district court to conclude that monetary damages would be inadequate. In this case, a small company was practicing its patent, only to suffer a loss of market share, brand recognition, and customer goodwill as the result of the defendant's infringing acts. Such losses may frequently defy attempts at valuation, particularly when the infringing acts significantly change the relevant market, as occurred here. The district court found that Microsoft captured 80% of the custom XML market with its infringing Word products, forcing i4i to change its business strategy. The loss associated with these effects is particularly difficult to quantify. Difficulty in estimating monetary damages is evidence that remedies at law are inadequate."

So the injunction stands, but not after tossing Microsoft the most hollow of victories: Sixty days, the Appeals Court decided, was not a fair amount of time for Microsoft to comply with the District Court's order, so it extended the period to five months...from the date of the order. That means the injunction now takes effect on January 11...two months ago.

[EDITOR'S NOTE: On Microsoft's request, we changed our original headline, taking note of the fact that Microsoft did not file a complete appeal on December 22. What it did file was a petition for an en banc rehearing of the existing appeal, and that petition was actually granted, even though the revised opinion issued Wednesday effectively clarifies the Appeals' Court's earlier stand.]

In a more complicated gaming world, OpenGL 4.0 gets simpler, smarter

By Scott M. Fulton, III, Betanews

Despite the fact that game console manufacturers still drive studios toward exclusivity for individual titles, so that a popular Xbox 360 game isn't available for PlayStation 3 and vice versa, developers within those studios are insisting more and more upon cross-platform flexibility and portability. While they may be restricted to one console, they don't want those borders to extend to computers or to handsets.

For this reason, the Khronos Group has become more and more important to developers, and OpenGL is no longer being perceived as some kind of fallback standard, as in the phrase, "Your graphics use only OpenGL. Today, OpenGL is developers' ticket to portability between PCs, consoles, and handsets, and it's the only technology shining a ray of hope for cross-console portability should it ever become politically feasible.

Today at the annual Game Developers' Conference, Khronos (whose principal members include AMD, Nvidia, and Sony) unveiled on schedule the 4.0 version of its OpenGL cross-platform rendering language for 3D virtual environments. To understand the significance of this event, you have to understand a bit more about the challenges that game developers are facing. Specifically, as screen sizes become larger on average, screen resolutions grow finer, and screens by number increase beyond one per system, the types of simplifications that made 3D scenes look "good enough" for older PCs actually look bad on modern systems. More finely-detailed systems make typical "fuzzifications" (my word for it, not Khronos') look more obvious.

It's still too arithmetically costly to expect 3D games and artistic applications to be ray tracers -- they can't assume the shading values for a huge number of traveling photons in space in real-time. We've talked before about how some graphics cards, including the first DirectX 10.1 cards from ATI in late 2007, can track a few photons, and fudge the remaining shader values for the rest.

But applying that type of calculation to OpenGL -- so it can be used with ATI and Nvidia (Intel? Maybe someday) -- requires the application to calculate how much...or more accurately, how little detail it can get away with, for certain points in space. Typically in OpenGL, developers have used lookup functions to determine the level of detail required to map any given area. As screen dynamics change, the number of functions required for a given space may increase, and their efficiency may decrease. As a result, it could take exponentially more time to make a scene look realistic -- to fuzz the focus of areas that are on the sidelines or out of range, or to blur regions that we're supposed to be flying by.

Khronos' engineers tackled this problem by extending the research begun earlier in the last decade (PDF available here) by SGI, the company that originally got the ball rolling for OpenGL. Technically, the whole technique is called "level of detail," but another way to refer to it is shader simplification. Used judiciously, it's a way to make certain elements of a scene seem clearer by selecting which others appear not so clear.

Screenshot of an early build of the Icarus Scene Engine, an OpenGL-based 3D scene editor that is itself rendered in 3D, using the OpenTK toolkit.

As scenes are processed, OpenGL effectively determines the active level of detail for any given shader (the equivalent of what Direct3D calls a "pixel," which isn't always a "pixel" per se). OpenGL 4.0 expedites this process by realizing that levels of detail should be remembered, so that when a function looks it up from the outside, it doesn't have to be recalculated. Thus, top of the list on version 4.0's list of changes is the new textureLOD function set, which will not impact how developers use the API -- it's like a retroactive fix. The new functions recall levels of detail rather than recalculate them.

These new functions are actually necessary for OpenGL to work (properly) on ATI Radeon HD 5xxx series graphics cards, which began shipping last year. Now developers are looking forward to ATI upgrading its 5xxx drivers to enable 4.0, now that 4.0 has enabled them.

The result may be an avoidance of the exponential lags that developers had been seeing as resolution and screen complexity increased. Double-precision floating-point vectors will be supported for the first time, also signifying the new dynamics of 3D rendering. And now, cube map textures can be layered, potentially for more iridescent effects that will substitute for bump mapping. As one contributor to Khronos' OpenGL forum noted this morning, "I just had a look on the extension, it's so much more than whatever I could have expected! I think there is a lot of developer little dreams that just happened here."

The first rollout demonstrations of OpenGL 4.0, along with its WebGL counterpart, were scheduled for late this afternoon, West Coast time. That's probably where we'll see our first screen shots of the final specification at work.

We'll also learn more about just how viable the new edition is for cross-platform development. This afternoon, another forum contributor from Montreal noted the remaining political roadblocks to true cross-platform development: "As a cross-platform developer I would like to use OpenGL exclusively but it's commercially unviable to use it on Windows, due to the fact that OpenGL just doesn't work on most machines by default, which forces me to target my game to both DirectX and OpenGL. The OpenGL shortcomings on Windows aren't a big deal for hardcore games where the users are gonna have good drivers (although they are a cause of too many support calls which makes it inviable anyway) but it's a show-stopper for casual games...Until OpenGL isn't expected to just work in any Windows box, it is dead in the Windows platform. Do something about this please."

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