The main attraction of Android for mobile
phone manufacturers has been that it is free, but as phone makers like Samsung
and HTC have found out, Android’s encumbrance is that it is constantly pursued
in courts all over the globe by Apple and Microsoft.
Samsung has already agreed to pay millions
to Microsoft (MSFT) for licensing patents related to Android.
Some investors may be surprised to know
that the biggest blow landed on Android may not be coming from the fist of
iPhone maker Apple, but instead from the samurai sword of Larry Ellison at
Oracle.
Jury selection begins today in San
Francisco in a trial that pits Google against Oracle. Oracle is
suing Google over intellectual property related to Java that was previously
owned by Sun Microsystems. Oracle bought Sun Microsystems. Google’s defense
is that Java was free and that Sun was a supporter of Android.
Obviously Oracle disagrees. Oracle’s
arguments may include an email from a Google engineer concluding that Google
should seek a license from Oracle to use Java.
Barring a settlement, we will know the
results soon as the trial is expected to last only eight weeks.
If Oracle wins, it will be in a position to
seek an injunction against the sale of Android devices. In all
likelihood, Oracle is not after an injunction, because it is not in the mobile
device business. Oracle is angling for licensing payments. If
Oracle wins, it may seek $5.00 to $7.00 in royalties per handset.
Over a period of time, royalty payments may
add up. Such royalty payments may cripple Android as it will take away its
advantage of being free.
Even if Google wins, Android is facing a
big challenge from Apple. (Please see Apple To Make Billions On Google’s
Android and Apple Could Rake In Billions From Android Licensing Instead Of
Enriching Lawyers.)