[brudgers]

[IANAL]

It appears to me that:

1. B&N is arguing that Microsoft's patents are invalid based on prior art rather than that Android does not use the methods covered by the patents. This makes Microsoft's assertion of their interest legitimate even if their patents should be overturned based on prior art (or if software patents themselves ought to be abolished, altogether). This form of competing claims is exactly the sort of matter appropriate for patent litigation.

2. Given their financial situation and the choice of the Nook's operating system being non-central to B&N's overall profitablity, it seems to me that B&N's decision to litigate (somewhat on Google's behalf) seems to be an attempt to swing for the fences and hope for a big settlement rather than focus on business fundamentals.

3. The DOJ appeal seems particularly week given the market share of iOS devices.

[pyre]

Placing the licensing fee for these patents at the same cost as licensing WP7 seems: 1) extremely anti-competitive and 2) unreasonable.

This seems like Microsoft is still trying to stay relevant via patent litigation rather than actual innovation. If WP7 tanks, then they are still getting the same amount of licensing fees for every Android handset sold, so who cares (from their perspective) that WP7 tanked...

[brudgers]

>"Placing the licensing fee for these patents at the same cost as licensing WP7 seems: 1) extremely anti-competitive and 2) unreasonable."

[IANAL]

To me, equivalent pricing seems to be plausibly consistent with the fair market price of a mobile operating system which incorporates Microsoft technology... [edit] at least from the perspective of a lawyer representing Microsoft.[/edit]

It is hard to argue that Microsoft is placing Android at a disadvantage relative to WP7 when the price is equal since this allows Android to compete upon its technical merits and any perceived market advantage the brand provides.

[pyre]

How is it the the license for a handful of patents is equivalent to the license for an entire operating system that incorporates a lot more than just those patents?

It comes out looking something like this:

  license for WP7     (1000 MS patents) = $40/device
  license for Android (6 MS patents)    = $40/device

(obviously the numbers are made-up, but you can get the gist)

"a mobile operating system which incorporates Microsoft technology" is a gross simplification.

[brudgers]

>"How is it the the license for a handful of patents is equivalent to the license for an entire operating system that incorporates a lot more than just those patents?"

Because your question requires an understanding of the ways markets equilibrate, perhaps the Market Economics Fairy can provide an appropriate answer regarding the way in which the market establishes the exchange value of mobile operating systems based on supply and demand.

[tankenmate]

1. Product tying, especially if there are threats w.r.t. Windows Licenses, is illegal if you are a monopoly.

2. The choice of the Nook OS does affect their profitability, cost control is the primary way a company can gain price flexibility / increase margins. Using Android means no license fees, no restrictions on how you implement it (apart from those you impose on yourself and / or technical limitations). B&N will probably have a large sunk cost on research, development, and operations by going with Android; doubling or more of that sunk cost because of a "bully" will put the back up on more than one or two execs. B&N are probably feeling they are at the point that it might be cheaper to litigate, or they feel that this might be a bet the company moment.

3. If you are going to take a punt on some anti-trust action you don't instruct teams like Cravath; you go to them if you feel you have a good chance to prevail or have more money than sense; B&N at first blush don't strike me as the second.

[brudgers]

>"Using Android means no license fees, no restrictions on how you implement it (apart from those you impose on yourself and / or technical limitations)."

[IANAL]

If Microsoft's patents are not infringed or they are invalid, that is correct.

However, the former does not appear to be part of B&N's argument, while the latter is obviously subject to debate at this time.

Therefore, it appears to be premature to assume that this premise of your argument is well supported from a legal standpoint.