The German Patent Court has invalidated one of Microsoft’s most lucrative patents. The ‘common name space for long and short filenames’ FAT patent has been used by Microsoft for years to harass Android manufacturers into paying it royalties for every device that uses Google’s mobile operating system. The original judgement that allows all of the strong arming was won against the Linux operating system and since Android uses the Linux Kernel at it’s core Microsoft has been able to negotiate licencing agreements from more than 20 Android manufacturers or around 70% of all Android devices manufactured.
The estimated revenue from the licencing has been estimated to be around $2bn a year making it one of the most lucrative business units for Microsoft who notably measure success based on whether a business unit does $1bn in revenue per annum. Android apparently makes more money for Microsoft through royalties annually than Windows Phone and Windows RT, not hard to believe considering the fact that over 100 million Android devices were activated between May and September this year.
Microsoft have already had the FAT patent nullified and reinstated once before and will of course be throwing some considerable legal muscle behind the defence of one of its biggest money spinners. Although Windows Phone is on a growth spurt at the moment, Microsoft will not be receiving licencing fees from its biggest partner Nokia for much longer after purchasing the Finnish smartphone manufacturer so, for now, the Android slaying FAT patent is worth fighting tooth and nail for to keep the money rolling in.