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November 9th, 2011 
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Barnes & Noble is fighting back against Microsoft’s claims that its Android-powered Nook devices violate its patents, angling to involve regulators as the tech giant ramps up intellectual property battles.
The bookseller on Tuesday submitted to the International Trade Commission a letter sent to the Department of Justice’s chief counsel for competition policy, accusing Microsoft of attacking Android device makers with patent-related legal action. The letter, along with supporting documentation, was part of a presentation to the ITC in response to a complaint brought against Barnes & Noble by Microsoft.
Microsoft previously accused Barnes & Noble’s Nook e-reader of infringing on five of its patents, filing a complaint with the ITC against the bookseller and seeking to have imports of the Nook blocked.
“Microsoft is embarking on a campaign of asserting trivial and outmoded patents against manufacturers of Android devices,” said Barnes & Noble to Gene Kimmelman, the Justice Department’s chief counsel for competition policy. “Microsoft is attempting to raise its rivals’ costs in order to drive out competition and to deter innovation in mobile devices.”
Barnes & Noble’s submission to the DoJ comes as Microsoft ramps up patent-related legal action against Android device makers in recent months. Generally, tech companies have settled out of court with the Redmond, Wash.-based company, choosing to pay licensing agreements rather than face potential product bans or lengthy court actions.
Samsung, for example, agreed to pay Microsoft $10 per device and to manufacture a Windows Phone device. HTC pays the tech giant $5 per Android device under their agreement, and Chinese mobile unit maker Huawei Tuesday admitted it is in talks with Microsoft over the patents.
“All modern operating systems include many patented technologies,” Microsoft said in a statement, according to Bloomberg News. “Microsoft has taken licenses to patents for Windows and we make our patents available on reasonable terms for other operating systems, like Android. We would be pleased to extend a license to Barnes & Noble.”
Barnes & Noble, though, says Microsoft is using its patent holdings to drive up rivals’ costs and prevent Android devices from taking away sales from Microsoft’s Windows sales. Google offers Android as a free open-source OS to manufacturers, which would have to pay to use the Windows OS.
Microsoft says it is willing to negotiate patent licensing fees, but Barnes & Noble says the software maker is demanding the same amount in patent fees that it would charge users to switch to the Windows Phone OS.
A trial on Microsoft’s claims against Barnes & Noble is set for February, if the two companies don’t come to a settlement. Barnes & Noble may be holding off on a settlement as it moves away from traditional book sales and toward providing digital content.
The company sold $880 million worth of Nook readers in fiscal year 2011, said Bloomberg, and forecasts sales this year to double to $1.8 billion, representing one-fourth of the company’s revenues.
Barnes & Noble is also set to release its new Nook tablet, which is expected to generate high sales. The bookseller, by fighting the Microsoft lawsuit, likely hopes to keep a percentage of profits from both the Nook e-reader and upcoming tablet from going into Microsoft’s coffers.
Nevertheless, like others before them, Barnes & Noble may reach a settlement with Microsoft if the company determines that paying a licensing fee would, in the long run, be less expensive than a drawn-out trial.
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