Software behemoth Microsoft (Nasdaq: MSFT ) is suing GPS navigation expert TomTom for allegedly infringing on five of Redmond's technology patents. I'd be surprised if this case wasn't settled out of court rather quickly, with TomTom sending over a check or two. Licensing these patents seems so much cheaper and easier than going to court.
The patents themselves hardly qualify as state-of-the-art high technology these days. Most of them have to do with older navigation system patent filings and management of Flash-based storage systems. It's a lesson in how to stretch the research dollar by making old developments pay dividends for a very long time.
Two of the patents at issue were awarded way back in 1996, and they will expire in 2015. They describe how to work around the file naming limitations of older DOS formats and make long, human-readable file names without reformatting the drive or breaking compatibility with older systems.
FAT and its future big brother FAT32 quickly became the industry standard for portable storage, thanks to its simplicity and user-friendliness. The rich get richer, of course, and it's hard to find a Flash drive, digital camera, or MP3 player today that doesn't use this standard. Apple (Nasdaq: AAPL ) iPods ship out with a FAT-formatting option. So does Amazon's (Nasdaq: AMZN ) Kindle 2. A standard is a standard, and going with anything else would keep TomTom's tomtoms from talking to your computer.
If Microsoft had gotten file system management right the first time, this particular licensing gravy train would have already reached its final destination. The 1996 patents are essentially workarounds for problems inherent in older file systems. But of course, the hardware of 1986 couldn't have handled the software upgrades of 1996, so it's a fair cop. Still, it's nice to see a basic technology stretched into the distant future this way.
It's what big R&D departments hope for, every time. Patent licenses can make or break a company, as evidenced by Transmeta and Rambus (Nasdaq: RMBS ) . It's a drop in Microsoft's enormous bucket, but there's nothing wrong with squeezing blood out of every stone in these hard times. Intel (Nasdaq: INTC ) is doing it, too.
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