All of this money could have been spent on improving the products and services that are offered to us, the consumers. Instead, companies have to spend hundreds of millions and even billions to protect themselves against companies like Apple.
We all lose.
If you can’t rack up patents, acquiring them looks like a swell idea. Just ask HTC, which sued Apple in another patent lawsuit between the two parties.
On Monday, HTC filed a lawsuit against Apple over three patents: 7,417,944, 7,672,219 and 7,765,414. Of those patents, only one comes from HTC organically. The other two come via ADC Telecom. HTC paid $75 million to pick up those patents in April.
Sound familiar? Of course it does. HTC acquired S3’s patents, which can be used as ammunition to fend off Apple’s various lawsuits. The International Trade Commission already ruled that Apple is infringing on two S3 patents.
And the mother lode of patent acquisitions appeared yesterday via Google’s $12.5 billion purchase of Motorola Mobility. That deal was all about the patents—specifically 17,000 of them. If you assume Nortel’s 6,000 patents set the benchmark for intellectual property purchases at $4.5 billion, Google basically justified its Motorola Mobility deal with patents. The hardware business is worth next to nothing.
These are wild times in the patent landscape. A company like HTC can spend $375 million acquiring patents (S3 and ADC combined) and justify the returns based on lawsuit defenses. On the surface, HTC’s latest patent lawsuit looks run of the mill. But judging from the patent acquisitions of late you can assume there will be many more lawsuits on deck.
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