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Google's Motorola acquisition: Microsoft patent case takes a new turn

By | August 15, 2011, 5:03am PDT

Summary: With the Google announcement that it intends to buy Motorola Mobility, the Microsoft vs. Motorola patent battle just took a new turn.

The Microsoft vs. Motorola patent case just took a new turn on August 15, with Google’s announcement that it plans to buy Motorola Mobility for $12.5 billion.

Microsoft and Motorola have been warring over patents for the past several months. Microsoft sued Motorola on October 1, 2010, over alleged infringement of Motorola’s Android smartphones on Microsoft’s patents. On November 9, Microsoft sued Motorola again over wireless and video coding patents that are used by the Xbox and smartphones. In the latter case, Microsoft claimed that Motorola is charging excessive royalties for its patents.

Motorola retaliated with its own countersuit on November 10, claiming infringement of 16 of its patents by Microsoft’s PC and server software, Windows Mobile and Xbox products.

Google execs cited patents as a key reason it is seeking to purchase Motorola.

“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” said CEO Larry Page in a new blog post.

I’ve asked Microsoft for comment on the effect of Google’s intended purchase on its patent cases against Motorola, but have not yet received a statement.

“It takes time to close such major transactions and I believe all litigation involving Motorola will continue, likely including the disputes with Microsoft as well as Apple and others,” said FOSS Patents’ Florian Mueller.

Mueller also said he believed that Google’s acquisition of Motorola could negatively affect Android handset makers outside the patent realm, as those companies “would have to compete head-to-head with the supplier of their operating software.”

Google execs recently blogged claimed Apple, Microsoft and other tech vendors which outbid Google for a Nortel patent war chest are behaving in an anti-competitive way.

Update 1: Motorola split into two companies, Motorola Mobility and Motorola Solutions, earlier this year. (Thanks to my ZDNet colleague Ed Bott for the pointer.) Motorola Mobility is the company Google is seeking to acquire and the one which has been embroiled in the Microsoft patent cases.

Update 2: You’ve got to wonder whether Motorola was shopping itself around, especially given Motorola executives’ recent statements that they’d be willing to team with Microsoft if they could get a Nokia-like deal. And, indeed, that appears to be the case, with Om Malik posting that Microsoft supposedly kicked the Motorola Mobility tires recently. Malik said Microsoft wasn’t in discussions to buy the company, but did inquire about buying Motorola’s patents.

Update 3: Things could get interesting on the tablet front with this acquisition, as @artfuldodga noted on Twitter. Will we see a Motorola Chrome OS tablet? Or some other hybrid?

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Topics

Mary Jo has covered the tech industry for more than 25 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

Disclosure

Mary-Jo Foley

Freelance journalist/blogger Mary Jo Foley has nothing to disclose. WYSIWYG (what you see is what you get). I do not own Microsoft stock or stock in any of its partners or competitors. I have no business ventures that are sponsored by/funded by Microsoft or any of its partners or competitors.

Biography

Mary-Jo Foley

Mary Jo Foley has covered the tech industry for 25 years for a variety of publications, including ZDNet, eWeek and Baseline. She has kept close tabs on Microsoft strategy, products and technologies for the past 10 years. In the late 1990s, she penned the award-winning "At The Evil Empire" column for ZDNet, and more recently the Microsoft Watch blog for Ziff Davis.

Got a tip? Send her an email with your rants, rumors, tips and tattles. Confidentiality guaranteed.

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RE: Google's Motorola acquisition: Microsoft patent case takes a new turn
tomlin21-24319035676893835085146735905770 11th Oct
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I do not think those manufacturers have anything to worry about. Look to Google dispose of Motorola mobility manufacturers and design units fairly quickly to a Chinese competitor.
@Knowles2 If this were to happen, they could likely drop it to HTC for half the investment and then HTC and Android become synonymous.

Either way, this is going to eliminate the $15 tax that Android Vendors have to pay MS and Googles next acquisition will likely address the Apple portion...

All of this is going to continue to open the doors for Android to thoroughly dominate the Mobile Market for Years to Come!
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Actually ...
jscott69 15th Aug
@Peter Perry ... this doesn't necessarily eliminate anything.

MS obviously felt its patents were stronger than MMI's or it wouldn't have sued and sought licensing fees. Nothing about that has changed yet. A) MMI is still part of Moto until a sale is approved by necessary government agencies; B) MMI's patent portfolio may actually lose a few patents that remain with Moto Solutions, so its case may actually be slightly weaker (though I doubt Google would be trying to purchase MMI if the patent portfolio wasn't a treasure trove of wireless patents).

With the sale pending, MMI probably won't agree to MS' licensing demands. And Google is probably even less likely to ever agree. So, MS' fight is likely to wind up in court after all ... sooner rather than later. Then we'll see what MS' patents are and how strong they are. If they're as strong as MS seems to believe they are, Google/MMI would still lose, which means all of Google's Android partners will be guilty of infringing, too. So, if anything, this may just hasten judgment day on Android.

The situation is the same with Apple: it supposedly has very fundamental patents that would be next to impossible to work around, which puts it in the driver's seat still. And Apple has nothing to gain by licensing its technology for use in Android -- it certainly doesn't need the money. If Apple can prevent Android from being installed on phone and tablet devices, then all the Android partners will be up the creek without an OS -- they'd have no choice but to either modify Android so that it doesn't infringe or to use an alternate OS ... or exit the markets, altogether, which is unlikely. (From what I hear, WebOS and RIM's OS also infringe the Apple patents, but haven't come under fire yet, due to their smaller size.)

But Google's announcement doesn't change anything yet. It only raises more questions. And perhaps hasten the timeline a bit on things.
@jscott69 Actually I'd say that ALL of the following vendors have 'fundamental' patents that could not easily be worked around: Nokia, Motorola/Google (on wireless phones); Apple (on touchscreens); Microsoft (smartphone OS); Palm/HP (smartphone OS).

It's not quite M.A.D., as Team Nokia-Microsoft and Apple have the upper hand -- but with Google + Motorola it's now highly unpredictable how the legal all-in wrestling rumble will end.
@Peter Perry MMI may not have been as willing to fight the long legal battle, especially with their earnings down, but google has a much bigger stake in this and their legal team is willing to fight longer. I suspect Samsung, HTC, and the others Microsoft is collecting android royalties from, were probably not willing to enter into the long fight either, and just gave in. What happens in the next months (or years) will be very interesting.
Next controlling how Android is changed and used. Will android end up on one brand of phone in the end?
@imsimsj Nope, not at all!
@Peter Perry I hope not.
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Nahh...
cosuna 15th Aug
@imsimsj : Since Google is not really a hardware company... it's almost certain that they will retain management and let Android spin by itself...

Not sure how HTC will take this and if this is going to prompt Microsoft to buy Nokia... sooner than later...
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Motorola was one of Google Apps marquee customers, used as a poster child of enterprise adoption of Google Apps. It makes you wonder how far back these acquisition talks go, considering Motorola's troubled past. "If you use our Google Apps, we will buy you so you do not have to pawn the silverware."
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More loyal partners for WP7
adacosta38 15th Aug
Is this a April Fools Joke in August? Looks like the Nokia and Microsoft combination is indeed a serious threat. I hope this will gain more loyalty for Microsoft WP7 amongst manufacturers such as HTC and Samsung etc. I am sure the Android partners are p****d with this decision to buy Motorola though. You can't be both our OS provider and competitor.
@adacosta38 Why would they do that? Android just got a whole lot more Muscle behind it!
@adacosta38

Your assumptions aren't facts, but keep on hating Google all you want...
@adacosta38

WP7 is as big a failure as the Kin. Why would any manufacturer move from the leading OS to one with 1% and stagnating market share?

The handset manufacturers seem pretty pleased about this buyout, at least in public:

http://www.google.com/press/motorola/quotes/

?We welcome today?s news, which demonstrates Google?s deep commitment to defending Android, its partners, and the ecosystem.?

? J.K. Shin
President, Samsung, Mobile Communications Division

?I welcome Google?s commitment to defending Android and its partners.?

? Bert Nordberg
President & CEO, Sony Ericsson

?We welcome the news of today?s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.?

? Peter Chou
CEO, HTC Corp.

?We welcome Google?s commitment to defending Android and its partners.?

? Jong-Seok Park, Ph.D
President & CEO, LG Electronics Mobile Communications Company
@Nickkuk

Yeah, those quotes don't sound like these execs are reading from a Google provided playbook at all. What else are they going to say? They have to toe the Google PR line until they decide what their options are and where to go next.
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Yep...
cosuna 15th Aug
.... it appears that rather than create a foe for the partners... what Google is doing is actually *eliminating* one...

Most probably... MMI will remain competitive by polishing the Xoom (into an Ice Cream Sandwich 4.0 version) and the Atrix... not sure they will continue with the Droid... but I don't see them abandoning the small Android phones (like the FlipOut)...

Also, most probably... the company will be renamed in some way, only to license the Motorola name (just as Lenovo did for some time with IBM)... for a while... under a mixed Google-Motorola form... this will allow the "older" Motorola side to retake control of the brand...
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@Nickkuk I have to agree with @adacosta38. The purchase of MMI could have long term impact on Google's ability to add hardware partners. The announcement today was riddle with Google positioning this as defense of Android from "anti-competitive behavior by Apple, Microsoft, etc. I'm thinking this will play out very differently in the long run. The information purchase if MMI enables Google to uniquely control the end user experience within the android portfolio. Don't tell me that Google spent 12.5B today to defend a platform.
@Nickkuk
Sounds like a single prepared statement, with just some minor variations... I wonder who drafted the original statement???
@Lamerz:
that is easy to say isn't it? "Oh those quotes are probably que carded by google...." You don't think each one of those CEOs weren't a little afraid that Google might give up on Android or consider it a losing cause considering how much litigation there is against it?
It is VERY obvious to everyone that this (Google buying Motorola) is a genius move by Google and is obviously a solid way of saying "don't worry partners, we are into Android for the long haul". I mean, why wouldn't they want to keep this going with Android as it is the #1 mobile OS today.
@adacosta38 It's highly unlikely any Android partners are pissed. Here's why... Motorola was thinking about suing other Android hardware makers over patents. Googles acquisition puts an end to that. This acquisition is more about the 17k-24k patents, and not so much the equipment.

Mobile OS is about to become a two team race - Andoid and IOS. Where are HTC and Samsung going to go?
@jdelaney60 It's a three-team race. The combined patents of Nokia and Microsoft are still significantly stronger that Google's, and it's in the interests of neutral handset makers like HTC to keep multiple mobile OSes alive.
Wait a minute, google. I thought patents were bad and to be ignored? I guess they're not so bad after all?
@Cylon Centurion
boy you need to use some logic if arguing with adults:
Are patents bad? in many case yes
Are patents to be ignored? only a fool can asses something like this, never heard from anybody...
@Cylon Centurion Who said they were to be ignored?
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Message has been deleted.
jk_10 Updated - 15th Aug
  • Flagged
@Cylon Centurion

Long ago, Microsoft was anti-software patent too, but that was not a realistic position and they changed their tune, so Google is just doing the same thing.
@Cylon Centurion They're bad when other companies use them as blunt force instruments to halt technological innovation.
@indio7777 ... patents don't prevent innovation ... they prevent copying. It's a subtle difference, but an important one.
@Cylon Centurion I may speak out against gun violence, but in a war of bullets, I'm going to want all the guns I can get my hands on.
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Google...
fjpoblam 15th Aug
...the new Standard Oil
Motorola's biggest weakness has always been its understanding of the market. They have been lost ever since the peak of the RAZR. However, they are great hardware engineers so look for Google to get serious leverage for their software platforms. Google may divest the manufacturing, but look for them to retain the engineering design team.
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... licensees over the fact that it contains Linux, which MS claims violates over 200 of its patents? It seems to me MS could sue licensees of Android and most forms of embedded Linux, to eliminate the OS's free cost advantage. When this is added to the fact that Android may have violated the terms of the GPL, and any number of contributors to the OS to could sue to stop its distribution, Android could be in a heap of trouble.
@P. Douglas Sure. Because a billion dollar company which just bought another billion dollar company can't afford attorneys to think about things you just wrote about. I think I'll put more faith in their plans, than your questions.
If you look at Google's evolution from search engine to software and now hardware developer I wonder how this will affect their relationship with the open market. Android has evolved due to the open market and as it closes that door will they be able to keep pace with MSF?
@primartcloud Keep pas with MS? Like MS is a "leader" in mobile.
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What is Different Now
WebSiteManager 15th Aug
If Microsoft sues Motorola (and the other way around), and both sue the other on the merits of their patent stack, what's the difference when Google replaces Motorola to do the same with the same patents? Microsoft wasn't going to run out of cash to litigate. Did Motorola not have the funds to finish a court battle? Otherwise, what's really different?
@WebSiteManager EXACTLY!
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HINT: It makes no difference
wackoae 15th Aug
Are people really this dumb? If Moto didn't have/used a cross patent defense before what in the world you see changing with Google in the middle?

I don't see anything changing in the case ... because NOTHING CHANGED. The same patents MMI had are the same patents they now have to defend themselves.
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Re: Motorola V's Skype
pinds 15th Aug
This deal makes much more sense than the Microsoft acquisition of skype. Skype is way overvalued and is really of little relevance when you consider other competitors that are out in the market. The cost of acquiring motorola is really a bargain compared to skype. Microsoft have more money than sense!!! They should take a leaf out of googles book and maybe bid for nokia.
@pinds
If you believe that Microsoft has more money than sense, do you really expect them to design better hardware than Nokia in a short period of time? Nokia already committed to running their software... . Why buy them?
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Re: The big losers
pinds 15th Aug
The big losers will be HTC and the up and coming companies that rely on android.
@pinds Not necessarily, Android is now more protected so they don't have to worry as much about the likes of MS and Apple suing them.
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Oh that's just delightful Mary Jo. You can always get reliable info
Dietrich T. Schmitz * Your Linux Advocate 15th Aug
from Florian Mueller
Yes, that's right!

Haven't read a better write-up from you!
Google was already a failed Android competitor with the Nexus. I don't believe that anything changes on that front but the reviewing of patents will get more challenging now as the patent front becomes a more & more difficult legal challenge. This could really be fun. I think I see the beginning of the end of software patents
..
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RE: Google's Motorola acquisition: Microsoft patent case takes a new turn
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RE: Google's Motorola acquisition: Microsoft patent case takes a new turn
tomlin21-24319035676893835085146735905770 11th Oct
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