Microsoft charges more to Android resellers for licensing six of its patents than it does for its entire Windows Phone 7 operating system.
It’s a brilliant strategy, since Android’s most obvious advantage is its “free” price for handset makers.
The strategy is revealed in Monday court filing from Barnes & Noble (PDF here).
Microsoft sued Barnes & Noble last month for patent infringement because the bookseller used Android in the Nook and Nook colour.
In a filing dated April 25 and revealed by ZDNet and Geekwire earlier today, Barnes & Noble says Microsoft approached it and said that Android infringes on six of its patents. But Microsoft wouldn’t offer more details about the claims unless the bookseller signed a non-disclosure agreement. B&N refused, noting that the patents were a matter of public record.
Microsoft came back and threatened that it could shut down B&N’s use of Android entirely.
Then, according to B&N, the company outlined royalty rates that were “shockingly high.” As B&N puts it:
On information and belief, the licence fees demanded by Microsoft are higher than what Microsoft charges for a licence to its entire operating system designed for mobile devices, Windows Phone 7.
Microsoft also wanted to charge more than twice as much for licensing the patents in the Nook colour because it’s closer to a full computing device, not just a simple e-reader.
Based on past statements by mobile president Andy Lees and other execs, Microsoft charges $10 to $15 per handset for Windows Phone 7, which was the result of three years of design and development.
By charging more than that for patents allegedly used by Android, Microsoft hopes to makes Android more expensive for handset makers than its own OS.
But it only works if companies sign the licensing deals.
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