Patent wars

What Google's latest move means for Android and mobile innovation

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Patent wars Google has amassed a war chest of patents
By  Daniel Shane Published  August 16, 2011

Along with Microsoft's purchase of Skype, Google's decision to splash out $12.5 billion on mobile device manufacturer Motorola Mobility has been one of the more surprising M&A activities of 2011 so far.

For one, the move comes just months after loss making Motorola's two main divisions, Mobility and Solutions (which sells infrastructure to telcos), went their separate ways in February 2011.

The obvious interpretation of the deal is that it gives search giant Google an entry into the booming mobile hardware market, which includes devices such as smartphones and tablet computers. While nowhere near the force Motorola was in the late 1990s, products such as the recent Motorola Xoom tablet have proved reasonably successful, with more than 250,000 devices being shipped to date.

The acquisition of Motorola's handset business does seem to be at odds with Google's mobile strategy, however. With its open source Android operating system, Google has so far promoted an ecosystem of various device manufacturers (such as HTC, Samsung and LG), which have been licensed the platform for use on their own handsets.

Google has insisted that Motorola Mobility will be operated at arm's length, and will not be absorbed under the Google brand. Still, companies manufacturing Android-based handset may feel ill at ease, and will need convincing that Google is still its partner, and not a competitor.

Furthermore, some industry analysts have raised the suggestion that Google could give preferential access to Android code to Motorola, which could drive device manufacturers toward other software platforms, most notably Microsoft's Windows.

There is another, perhaps more significant, motive behind Google's most expensive acquisition ever.

Last month, it was announced that a consortium including Apple, Microsoft, Ericsson and BlackBerry maker Research In Motion had bought one of the last few remaining assets of bankrupt telco Nortel. The portfolio of 6,000 or so patents relating to wireless technologies, 4G, data networking, among other things, seemed like a shot against Google's bows, with that company claiming it had been intentionally shut out of the deal.

As part of the Motorola Mobility purchase, Google will receive a treasure trove containing approximately 17,000 patents. Google made no bones about this being a key reason behind the acquisition: "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 Larry Page, CEO, in a company blog post.

This is unquestionably a defensive move from Google in a market where legal action over mobile device patents is becoming depressingly common. In August 2010, for example, software goliath Oracle brought legal action against Google over its alleged use of patents related to Java in its mobile platform Android. Oracle itself had only acquired those patents through its purchase of Sun Microsystems earlier that year. The Motorola deal will likely give Google some ammunition with which to defend its case against Oracle.

Similar anecdotes of patent ‘trolling' in the mobile device space abound. Korean conglomerate Samsung and consumer electronics business Apple have been slinging patent-related legal action back and forth at one another for most of this year. At one point, Apple accused Samsung of "slavishly copying" its iPhone and iPad devices. Taiwanese phone maker HTC has at some point sued both Apple and Samsung over patent claims.

The smartphone and tablet spaces are two of the fastest-growing technology markets at present. Both have been the source of some commendable innovations, from touch screens, to applications stores, to data networking. With the battle lines now drawn, and each camp sitting its own war chest of patents though, there must be some uncertainty over how innovation can continue unhindered.

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