SAN JOSE, Calif. – Google's $12.5 billion bid for Motorola Mobility is all about the patents. The only people really happy about Google acquiring a smartphone and set-top business are Android's competitors.
By merging Motorola's 17,000 issued patents with its own, the Internet giant hopes to create a legal shield that protects the Android ecosystem from death by a thousand patent suits. Indeed, the legal threats against Google and its mobile partners have been growing as fast as Android's market share.
But a Motorola acquisition also creates a hornet's nest of problems for Google and its Android smartphone and set-top partners. A wide community of embedded developers in everything from airplanes to X-ray machines will now watch to see how well the ecosystem weathers the inevitable storms.
In the end, there's no doubt Google was bold, but it may take years before anyone knows whether it was wise.
Don't believe for a second Google wants to be a maker of smartphones or set-tops. Such hardware businesses with their complex supply chains and rapid product cycles are anathema to Web companies today.
Google clearly felt it had its back against the wall. In an August 3 blog post, Google's chief legal officer, David Drummond, signaled the rising heat when he made accusation of "a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents."
Oracle shot one of the first big volleys in August 2010 when it filed a broad suit against Google for infringement Java patents in Android. Drummond pointed to separate suits against Android partners including Barnes & Noble, HTC, Motorola and Samsung.
In a more low profile effort, Apple, EMC, Microsoft and Oracle quietly created a consortium called CPTN Holdings LLC to buy 882 Novell patents that read broadly on areas including open source software including Linux and virtualization. The U.S. Department of Justice forced the companies in April to revise their deal in an effort to ensure the patents would be fairly licensed.
The big blow came last month when a consortium including Apple, Microsoft and Research in Motion acquired for $4.5 billion about 6,000 Nortel patents, many of them said to be fundamental wireless patents. Google quickly bought 1,000 patents from IBM, but it clearly thought the move was not enough.
With the Nortel patents, competitors could levy patent licensing fees of as much as $15 per Android handset, Drummond said in his blog. Press reports suggested Microsoft stood to make more on the sale of Android handsets than on its one Windows Mobile 7 software.