Google and Motorola Mobility: It's all about the patents

Some people see Google buying Motorola Mobility as Google moving into the hardware business. I think it's entirely about trying to win, or at least drawing, the mobile patent wars.
Written by Steven Vaughan-Nichols, Senior Contributing Editor

I can't prove it, because I didn't write about it, but I've thought for a long time now that Google buying Motorola Mobility made a lot of sense. It wasn't my idea though. I give full credit to billionaire investor Carl Icahn. In July, Icahn said that Motorola should shop around its patent portfolio, in particular Motorola Mobility, to wireless technology companies such as Google. His proposal made sense to me, and, what's important, it made sense to Google as well.

As Icahn said at the time, with 17,000 approved patents and another 7,500 in the pipeline, Motorola Mobility "has one of the strongest and most respected patent portfolios in the industry." Sure, Google can build its own Android phones now, but so what? The real value here for Google is in those patents.

Also: By the numbers: Google, Motorola Mobility deal values hardware at 'next to nothing'

Motorola knew Google needed them as well. When Motorola CEO Sanjay Jha said in the company's latest earnings call said that they would be aggressively monetizing its intellectual property (IP) by going after "new entrants to mobility industry with big revenue streams," many assumed Jha was talking about going after other Android players such as HTC and Samsung. It now seems what he was really doing was trying to drive up the price Google would pay for Motorola Mobility.

Why would Google do this? Haven't you been watching what's happening with Android? Although Android's popularity has been growing by leaps and bounds, it's been under near constant IP attack by Apple, Microsoft, and Oracle.

Sure, there are other reasons besides patents for Google to make this deal, but I don't they amount to a hill of beans compared to Google's need to put an end to the IP lawsuit siege on Android. Google, since it hasn't had a significant patent portfolio, to counterattack its IP enemies has been largely helpless against its opponents.

You see software patents are merely ammunition in business wars. In 2011, patent lawsuits are largely used to extort money and kill off innovation and competition. As Stephan Brunner, a programmer told NPR recently, I have to say that every single patent is nothing but crap."

In a more business-like fashion, Chris Sacca, the venture capitalist, said to NPR that "We're at a point in the state of intellectual property where existing patents probably cover every behavior that's happening on the Internet or our mobile phones today, The average Silicon Valley start-up or even medium sized company, no matter how truly innovative they are, I have no doubt that aspects of what they're doing violate patents right now. And that's what's fundamentally broken about this system right now."

Exactly so. Every IP lawyer I've spoken with, and I know dozens, agrees that the patent system is fundamentally broken.

But no matter how much business, legal and developer experts may agree that the current IP legal landscape is insane--as can be shown by the recent German court decision that Samsung's Galaxy Tab 10.1 design violated Apple's iPad design because, well, it looked like a tablet--it's the IP legal system we're stuck with for now.

Since that's the case, Google had to load its guns. As Kevin Burden, vice president of mobile networks, for the research house ABI Research, put it "All its [Google Android] licensees are now feeling their legal positions have just been reloaded."

As Larry Page, Google's CEO himself put it, "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."

Thus, Google will be able to use the patents, which includes database patents, it recently bought from IBM against Oracle and the Motorola Mobility patents against Apple, Microsoft, and other mobile patent enemies. The goal of all this? Google will get the best result anyone can get from a patent war: A draw with it competitors that will force Apple, Microsoft, and Oracle to compete in the marketplace with quality products instead of in the courtroom with lousy software patents.

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