Barnes & Noble has filed its response to Microsoft's claim from earlier this year that the Android-based Nook e-reader violates Microsoft patents -- complete with allegations around Microsoft's tactics around patent-enforcement tactics and royalty-charging plans -- saying that the software giant is using the legal system to try to eliminate competition for its Windows Phone 7 operating system.
Microsoft sued Barnes & Noble, Foxconn and Inventec alleges that Barnes & Noble's Nook and Nook Color ebook reader products infringe on Microsoft patents. But in a counterclaim filed in federal court in Seattle, Barnes & Noble says Microsoft is misusing its patents. Here's part of the Barnes & Noble counterclaim:
Indeed, Microsoft's misusing these patents as part of a scheme to try to eliminate or marginalize the competition to its own WP7 mobile device operating system posed by the open source Android operating system and other open source operating systems. Microsoft's conduct directly harms both competition for and consumers of eReaders, smartphones, tablet computers and other mobile electronic devices, and renders Microsoft's patents unenforceable.
"On information and belief, as part of Microsoft's recently announced agreement with Nokia to replace Nokia's Symbian operating system with Microsoft's own mobile device operating system, Microsoft and Nokia discussed and apparently agreed upon a strategy for coordinated offensive use of their patents," says the B&N filing. "This type of horizontal agreement between holders of significant patent portfolios is per se illegal under the antitrust laws, threatens competition for mobile device operating systems and is further evidence of Microsoft's efforts to dominate and control Android and other open source operating systems."
"Microsoft did not invent, research, develop, or make available to the public mobile devices employing the Android Operating System and other open source operating systems, but nevertheless seeks to dominate something it didn't invent," B&N's complaint says.
According to the complaint, upon telling B&N officials that the Nook infringed six patents that Microsoft claimed to own, Microsoft officials said they'd share details only if B&N officials signed a non-disclosure agreement. B&N refused to sign an NDA, claiming the patents were public and the infringement allegations were on a public product. As a result, according to B&N, Microsoft officials would only discuss the alleged infringements "on a high-level basis."
"Microsoft nevertheless maintained that it possessed patents sufficient to dominate and entirely preclude the use of the Android Operating System by the Nook," according to the complaint. "Microsoft demanded an exorbitant royalty (on a per device basis) for a license to its patent portfolio for the Nook device and at the end of the meeting Microsoft stated that it would demand an even higher per device royalty for any device that acted "more like a computer" as opposed to an eReader."
B&N's complaint says that Microsoft was seeking a more than double per device royalty for the color version of the Nook -- an amount B&N officials believed be "higher than what Microsoft charges for a license to its entire operating system designed for mobile devices, WP7."
B&N is denying it has infringed the patents highlighted by Microsoft, and is calling into question whether some of the patents in question should be considered operating-system-related at all.