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KB3001
They better do that quickly then, Microsoft and Apple are not standing still. It ...
kdboyce
tb1: Thanks for the link. In more detail, Motorola spells out their patent ...
Google's Moto bid: It's all about the patents
Rick Merritt
8/15/2011 1:48 PM EDT
The fact that a group of competitors could orchestrate a set of legal moves that threaten to freeze free software out of the market is a potent indictment of the current patent system. The top-line consequences of Google's reaction are equally stunning.
Google is paying an estimated 63 percent premium for Motorola, making it the biggest proposed acquisition of it history to date. Google even agreed to pay a whopping $2.5 billion fee if it walks away from the deal, according to the New York Times.
The all-cash deal uses about a quarter of Google's cash reserves. The fact that such a large big is motivated primarily to protect a strategic part of its patent portfolio further underscores the absurdity of the situation. But this is not the first time this absurdity has come to light in the electronics industry.
Even in the smartphone sector, Research in Motion was stung in 2006 by a $612 million settlement when it mishandled a suit against its implementation of mobile email.
In recent years a herd of so-called patent trolls have emerged solely to acquire and assert patents. They have spawned a separate set of companies geared to help large product companies cope with their threats including Intellectual Ventures, Allied Security Trust and RPX Corp.
The rise of patent litigation has turned up the heat in recent years for patent reform. The Supreme Court has handed down several decisions on a wide variety of issues to deal with some of those problems. A bill still awaiting final approval in Congress aims to tackle others, but experts say none of the moves will impact the heated patent battle around Android.
Google would not comment on how the acquisition of Motorola's patents—including about 7,500 Motorola patent applications in process—might shift its legal strategy in the many Android suits. "But we will be in a very good position to protect the legal situation for all the [Android] partners," said Drummond on a conference call announcing the deal.
"Motorola’s IP team has lots of experience dealing with the patent assertion in the wireless space, and you would expect Google to make good use of that team," said Mike McLean, a vice president of professional services at TechInsights, an IP consulting group part of UMB LLC, the publisher of EE Times.
"Having a [Motorola] product business in this space should provide a strong position for injunctive relief if [Google] pursues litigation," McLean added.
The deal requires approval from antitrust regulators already examining Google for dominance in other areas such as online advertising. Drummond expressed confidence in getting the approvals given Google's current lack of a hardware business and the broad industry use of Android.
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chanj
8/15/2011 2:35 PM EDT
All about the patent... would the other Android smartphone vendors see the same? Where will Android smartphone go in the future? Will Google become a smartphone vendor in addition to supplying Android?
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junko.yoshida
8/15/2011 2:57 PM EDT
These are all good questions, chanj. But how effective Motorola Mobility's patent portfolio may become for "protecting the future of Android" still remains to be seen in my opinion. See my blog: http://www.eetimes.com/electronics-blogs/rambling--round/4218792/Tell-me-how-exactly-Google-can--supercharge--Android
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Patk0317
8/15/2011 2:45 PM EDT
I agree - it is all about the patents - otherwise why would Google increase its employee base by 60% and get into the dog eat dog world of mobile phone manufacturing?
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terion
8/15/2011 4:05 PM EDT
Where is this business (or any other business) end, when this amount of effort and money is spend on patent wars over some some really ridiculous patents.
Being IP lawyer in these days is much more profitable than being engineer. Innovation isn't value anymore.
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Frank Eory
8/15/2011 4:13 PM EDT
The Motorola patents are certainly a rich prize, but I'm not sure it's all about the patents.
It's interesting to hear people ask why Google would want to be in the hardware business, like that's a dumb idea, and yet it makes perfect sense that Apple is in the hardware business.
This acquisition makes Google look much more like Apple on many levels, and puts the two companies on more of a direct collision course, as others have already noted.
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Matt.Ronning
8/15/2011 8:19 PM EDT
Frank: I agree with you! Matt
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wirelessworm
8/15/2011 10:09 PM EDT
I really agree that they are now "on more of a direct collision course". Google walks along a similar way as Apple?
But of all things, google need to protect itself from being torn down by other giants
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Tunrayo
8/16/2011 9:11 AM EDT
I also believe it's not only about patents. Google needs to have more control on the hardware (smartphone) it wants to run its Android software on.
With the PC, Google's business is based on the internet and that has worked so well over the years. However, with the smartphone, which is predominantly device-based and app-based, Google needs to have more control on the device and optimize it for Android among other future products.
I feel Google wants to have a hand in making the device as well, so it doesn't have to be limited by how innovative other manufacturers will be. (HTC, Samsung etc)
And of course if it can make a few bucks selling devices, why not? Apple continues to show that people will pay up to $600 for a phone ... that is as expensive as some laptops.
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Jared Mahonrimoriacamer
8/15/2011 4:30 PM EDT
What do you think patents are? They are to protect innovation - they are legal descriptions of innovative ideas.
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cdhmanning
8/15/2011 10:06 PM EDT
That might have been the original intention, but patents are highly destructive to innovation.
It is really, really, hard to write any software or design any product that does not infringe or a patent, or get so close to infringing that you will end up in court.
As an engineer do you really have the time to assess the implications of patents on the work you are doing? No! All that happens is that one day you get a call saying that your original work infringes on a dubious patent.
I have a heap of patents in my name, only a few of those are really innovative.
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Etmax
8/15/2011 10:12 PM EDT
Interesting you should say that, as the patent requirement is that it should be non-obvious to someone trained in the art, ie. even if innovative it may be obvious, but if it isn't innovative then it is almost certainly is obvious.
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Robotics Developer
8/15/2011 5:02 PM EDT
This move felt like a IP patent blocking exercise to protect Google from the Novel and Nortel new patent holders. I wonder if there are future plans to expand into the mobile market with a next generation device that is Google centric in terms of on-line web access but focused on the mobile market?
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Joseph.Schachner
8/15/2011 5:08 PM EDT
I hope Google values what I think is Motorola Mobility's most valuable asset, their staff of employees with specialized knowledge and long experience building the radio part of cell phones. I've always used Motorola phones, and in places where my wife's (competitor) phone couldn't connect mine would. Now she has a Motorola phone too. That's important, I hope Google will preserve what they invested in.
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Etmax
8/15/2011 7:54 PM EDT
Just proves again that parents are evil and stifle rather than foster innovation. If all of these companies spent their money on engineers and development instead of patents and lawyers there would be a lot more VALUABLE people employed and a lot more innovation would be happening. Linux made it from a students desk to something better than virtually all alternatives in such a short time because there were no patents stifling it. Android leapt from that base to 48% market share in only a couple of years. I reckon the antitrust people should look at the Apple/Windows duopoly before ruling against Google's necessary move based on this stupid patent situation.
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nosubject
8/16/2011 2:09 PM EDT
Reality is dirty. Just accept it, even I fully agree with you and I have several patents.
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iniewski
8/15/2011 7:54 PM EDT
Yes, Moto has 3x number of patents compared to Nortel so that patent portfolio is very important. But if this is just about patents should expect a layoff of several thousands of Moto employees, obviously not...getting into the phone business for Google just doesn't feel right, culture clash within Google/Moto combo, competing with Android customers like Samsung, managing complicated hardware supply chains, not pleasant at all...how about keeping the patents and selling the Moto back to whoever wants to manufacture Android phones? I bet within a year we will see just that, mark my words ;-)...Kris
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The MicroMan
8/16/2011 11:46 AM EDT
Ah, duh. Motorola already does all this "complicated h/w, supply chains" etc. It's not like Google has to develop or figure out anything. They bought kit and caboodle. There's nothing wrong with seeding the market with reference designs either (has Intel ever done that?)
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JoshGrot
8/15/2011 8:03 PM EDT
If this is ALL about the patents, then why didn't Google do what they did with IBM and merely buy or cross-license the patents? Certainly the market didn't value the patents as highly as Google must have if this was merely about the patents.
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eewiz
8/15/2011 9:49 PM EDT
Note that Apple havent sued Google, but only Android phone makers. If Google cross licenses MMI patents, that doesnt necessarily all Android licensees are protected. Of course they can make the licensing terms such that other companies are also covered, but then the price might be almost the same.
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Tunrayo
8/16/2011 9:13 AM EDT
This is why I believe it is not only about patents ... Google needs to create an identity in the smartphone market. Apple has a strong identity, and Android has done superbly well so far.
This move can only make Android better.
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Etmax
8/16/2011 10:04 AM EDT
What has made Android so immensely successful in such a short time is its openness. This is what made the early PC so successful when compared to all of the computers of the time which were all closed. IBM sold more PC's because of the clones than they ever would have sold had they had it closed. that's why All the big names like TI fell by the wayside, because they were closed. You could only buy a printer from TI for TI computer. As a result innovation flourished. The reason why Linux has grown so quickly is because it's open and everyone wants to be part of the freedom that it brings. Compare that to Apple where you have to jump through clunky hoops to print a picture from your phone to a printer and forgot about sending SMS to a group or syncing YOUR calendar to anything other than a MAC desktop. Given the choice of Android were developers don't have their arm twisted behind their back with someone saying no you can't do that we won't let you. It's no wonder Apple and MS are running scared and are trying to strangle this opposition. Google understands this is why Android is so successful, so they won't kill the goose that lays the golden egg. You will see Motorola making phones in an open market and if Google sees that they can't run it successfully they'll spin it off keeping the patents. Still, given Moto makes great phones and the existing management understands how to run it why would you behead it? Again, Google is too smart for that.
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iniewski
8/16/2011 11:04 AM EDT
Yes, Moto makes nice phones but they struggled somewhat in market execution. Addition of Google will not help. And competition against other Android phone makers will hurt...Apparently Microsoft wanted to buy Moto. In this light Google acquisition makes perfect defensive sense....Kris
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selinz
8/16/2011 11:27 AM EDT
Well, I think Moto has a couple of the best phones on the market, bar none. My motorola Photon is making longtime Apple fanboys drool with envy. So no question, they have have great phones. But who is going to try to fight them from an IP standpoint with all of Moto's patents! I'm sure it was a financial decision.
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LarryM99
8/16/2011 1:31 PM EDT
I second your comment on Moto hardware (I have an original Droid and a Xoom), but I think Google will use the design capability more than the manufacturing arm of Moto. I see them designing and licensing handsets (with patent protection to licensees) rather than competing in the market directly.
Larry M.
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rick.merritt
8/16/2011 11:29 PM EDT
I agree with those who say Google might spin Moto off in a year or two after it puts protective cross licenses in place for both companies and key partners. This would make more sense than owning a Moto that it can never get synergies from because it has to treat them as an equal partner to other Android OEMs. Googlre can NOT be another Apple because it cannot let there be close technical ties between Moto hw and Google sw without poisoning the Android ecosystem. And you will never see Moto do its own A4/5/6 like ASIC for Android. So cross license and spin off would seem to be the right strategy.
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KB3001
8/17/2011 10:45 PM EDT
They better do that quickly then, Microsoft and Apple are not standing still. It would be interesting to observe the reaction of Android OEMs in the coming weeks and months. Whether they received assurances from Google or not, we will know.
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kdboyce
8/17/2011 2:52 AM EDT
To continue to grow Android in the marketplace, Google needs the other cellphone makers. One way to appease them would be to offer some protection against suits by Apple in that they now have a sizable patent portfolio to counter attack with.
Whether this is the intention or not, I don't know.
From a story of Nov. 10, 2004, (http://www.zdnet.co.uk/news/regulation/2004/11/10/microsoft-adds-ip-indemnity-to-linux-fight-39173136/) it is stated that "Microsoft will indemnify nearly all its customers against any claims that their use of Microsoft software infringed on any intellectual property claims."
The same tactic might be used by Google for all its Android users, and as Rick suggests, get out of the hardware business or sell it to an existing Android HW cell phone maker.
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jeremybirch
8/17/2011 9:53 AM EDT
Perhaps Google will just move the patents and the patent lawyers into a Google division and then sell of all the hardware side as a new company, which has a license to the patents. It can also choose to license some or all of the patents to its Android customers.
Notice that all of this is on the size of the patent stack, not on someone having a fundamental patent that prevents anyone else doing anything in the mobile market. Patent licensing deals might as well be done with a ruler and a calculator ie "my stack is two inches deeper than yours so you owe me $20million". Engineers can always find a way around a patent, but that is often a terrible waste of creative effort.
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Frank Eory
8/17/2011 5:49 PM EDT
Funny, for years I have heard the joke that patent licensing deals are based on the weights of the stack, i.e., "my stack weighs 1247 pounds and yours only weighs 968 pounds, so you owe me $20 million."
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Winston2010
8/17/2011 10:23 AM EDT
I suspect that White Space utilization is another goal of their purchase. Both Google and Motorola are heavily involved in that area.
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Frank Eory
8/17/2011 5:51 PM EDT
Good point! I had completely overlooked the whitespace issue. That could be extremely important.
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tb1
8/17/2011 12:39 PM EDT
Check out this Motorola web page describing their patent portfolio (near the bottom):
http://www.motorola.com/Consumers/US-EN/About_Motorola/Technology/Approach
Motorola apparently has MPEG patents too, which will probably help in their fight with the MPEG consortium.
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kdboyce
8/17/2011 7:26 PM EDT
tb1: Thanks for the link. In more detail, Motorola spells out their patent positions as:
"As of January 2011, Motorola will own approximately 24,500 patents and patent applications, worldwide. These include substantially all of the patents unique to Mobile Devices and Home businesses. Our patent portfolio generally relates to wireless, audio, video, security, user interface and product design, along with applications and services related to our products. Our Mobile Devices business segment will have approximately 14,600 granted patents and 6,700 pending patent applications, worldwide. Our patent portfolio includes numerous patents related to various industry standards, including 2G, 3G, 4G, H.264, MPEG-4, 802.11, open mobile alliance (OMA) and near field communications (NFC). The Home business segment will have approximately 1,900 granted patents and 1,300 pending patent applications, worldwide. Further, we believe our portfolio of patents in 4G will position our customers well in the upcoming technology transition from 2G to 3G."
What company won't be affected by one or more of these?
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