Google -- Microsoft sues over Android because Windows Phone 7 has failed

The war of words between Google and Microsoft has heated up even further, with Google's patent counsel essentially charging that the only reason Microsoft has been going after Android phone makers for patent infringement is because Microsoft's mobile phone strategy has failed. He also warns that the patent system is broken and may dramatically slow down innovation.
Tim Porter, Google's patent counsel, was interviewed by SFGate. He pulls no punches about Microsoft's motivations for suing Android manufacturers, or threatening them with suits as a way to get them to pay royalties. He says:

This is a tactic that Microsoft has used in the past, with Linux, for example. When their products stop succeeding in the marketplace, when they get marginalized, as is happening now with Android, they use the large patent portfolio they've built up to get revenue from the success of other companies' products.

Porter takes aim not only at Microsoft, but at the entire patent system, and comes close to arguing that software simply shouldn't be patentable. First he says:

You can look at the development of the software industry and see a point when (software wasn't being patented) and it was a period of intense innovation. You didn't see Microsoft's first software patent until 1988. By that time it had come out with Word, not to mention DOS. So there's just no question you can look back and see that innovation happens without patents. It's also true that since there weren't patents, there wasn't software patent litigation.

Then when asked point-blank whether software should be patentable, he hems and haws, not quite calling for an end to software patents:

I think the question is whether the current system makes sense. During the period I talked about, software was protected by copyright and other legal protections. There are certainly arguments those are more appropriate.

Microsoft, of course, takes a very different approach, and says that the infringing Android patents cost the company money, and all it's doing is getting paid fairly for its work.
And Microsoft gets paid very well, indeed, by Android manufacturers who have signed royalty agreements with it. Goldman Sachs estimates that Microsoft will get $444 million from Android royalties for fiscal year 2012. Microsoft Executive Vice President and General Counsel Brad Smith and Corporate Vice President and Deputy General Counsel Horacio Gutierrez write in a recent blog that the Android agreements:

...ensure respect and reasonable compensation for Microsoft's inventions and patent portfolio. Equally important, they enable licensees to make use of our patented innovations on a long-term and stable basis.

Who's right here, Google or Microsoft? In this instance, I can't say that I know. But I do know that in general Google is right that the patent system is broken when it comes to software, and needs to be significantly reformed. Google's Porter points out that

The period of intense patent assertions (against things like the steam engine) resulted in decades-long periods of stagnation. Innovation only took off when the patents expired.