What Google Gets With Motorola Mobility

from the yet-another-IP-market-distortion dept

Having already covered the basics of the Google deal to buy Motorola Mobility, we asked Derek Kerton to weigh in with his thoughts on what the deal really means.

Some suggest that Google bought Motorola Mobility Inc (MMI) so that it can vertically integrate and produce flagship phone models that have the polish and seamlessness of the iPhone. But the real reason is a common theme here at Techdirt: Google needs to build its defenses against patent lawsuits in the smartphone industry.

On the very face of it, Google doesn't need a handset subsidiary to make a custom Google phone. They can easily commission a handset exactly how they want it from OEM brands like HTC and Samsung, and have already done just that with the Nexus models. They could easily design their own brand of phones and have it built by contract manufacturers like Foxconn (as Apple does). I've read elsewhere that Google now gets the benefit of better understanding of the challenges of integrating Android into handsets. That's also incorrect. Google has a history of sending teams of engineers to most of their handset and tablet partners to work side by side overcoming those challenges.

Perhaps Google just saw a good deal on Motorola. Its stock price has been dropping through the decade, and also the past year. The market value prior to today was just $7.3 Billion, compared to $20B for Nokia or $13B for RIM. Perhaps, like Nortel before it, the value of Motorola's Intellectual Property (IP) is being hidden by a poor operational record. A buyer like Gordon Gekko (of the 1987 film Wall Street) could have bought up MMI, divested the operational arm from the IP portfolio, and realized a gain by separating the parts (as Gekko famously did to an airline). Of course, that's a 'private equity' view on the purchase, but Google has indicated it will retain MMI for now. Still the sum of the parts might be worth more than the whole. Although not a startup, this seems similar to Masnick's post yesterday that the value of a startup's patents might exceed the value of the operation.

There is also the less-mentioned factor that Google now also owns MMI's set-top-box division, which might give a shot in the arm to the fledgling Google TV business. Bundling Google TV into every STB would be great for Google, but I would expect that, since these boxes are all bought by cable operators, the cable companies would ultimately decide if Google TV actually remained in the box once it was installed on the customer premises. Since Google TV competes with their on demand services, it may end up as popular as the built-in laptop tethering feature is on Verizon's Android smartphones - i.e. Verizon takes it out.

My understanding is that Google intends to run Motorola as independently as possible. That is, no doubt, to head off what is known as 'channel conflict'. Channel conflict occurs when one member of a supply chain, say the Android OS supplier to many handset vendors, expands into another part of the chain, in this case the handset industry. Now they are both a supplier AND a competitor to companies like HTC, Samsung, LG, etc. Historically, the other vendors start to mistrust their OS supplier, and become more reluctant to use the OS as they search for other options.

We've seen this before with Nokia's handling of Symbian. Since 2001, Symbian was, ostensibly, an openly available smartphone OS that any handset manufacturer could use. Nokia got behind this idea full force, not wanting to cede the market to OS companies like Microsoft. They pushed the idea of other handset vendors joining them, in competition against Redmond. Some did adopt Symbian, including Ericsson, Motorola, Siemens, NTT DoCoMo. But Nokia struggled with the notion that Symbian was "too controlled by Nokia" since around 2003, so they spun it off into an open consortium in 2009. Too little too late. The other OEMs didn't ever really believe that Symbian was truly independent. The end result is that very few other handset vendors ever got fully behind Symbian, even during the time when it was the best smartphone OS in the world. So Nokia just ended up buying it back again in 2010, and finally killing it off recently.

With Android linked too closely to Motorola, companies like Samsung might be driven more to their own OS, called BADA, while others like LG could seek new alternatives (Windows, QNX...) Thus, Google now must re-interpret the same dance that Nokia did years ago: "No, don't worry, Android is still open. You will have as equal access as Motorola." This may succeed, but is a precarious position. The dance partners may have changed, but the music is still the same. Let's see if they come up with some new moves.

OEM confidence that Google will keep equal access to Android to all handset vendors is made even more precarious since the recent moves by Google to prefer some vendors of its formerly "open" Android OS. Google only released the latest tablet version of the OS (Honeycomb 3.0) to select partners, shutting out the open source community and other hardware vendors from the OS for now. The first to get exclusive access? Motorola, for the Xoom tablet. This is not the best way to ease OEM concerns around equal access, given that some may be 'more equal than others'.

It becomes clear that what Google truly needs from the acquisition is the patent portfolio of Motorola Mobility. The smartphone patent wars have been raging lately. It seems every handset vendor is getting sued by big competitors and by patent trolls alike on a daily basis. Android vendors, for example, pay nothing to Google for use of the OS... but they must pay about $5 per phone to Microsoft because MSFT had the smartphone patent leverage against Google. In another dire example of the risk of patent assault on Android device makers, the Samsung Galaxy 10.1 Tablet has been shut out of European and Asian markets by injunctions based on patent claims from Apple.

To fend off patent assaults, companies seek to build their own patent arsenals. That, for example, is why so many vultures hovered around the carcass of Nortel, and bid up its patent portfolio to 4x what the market expected. Google bid, but did not win at the Nortel auction. But with Motorola's 14,000+ patent portfolio in the mobile phone industry, Google can not only defend Android much better from the patent assault (by threatening counter-assault), but Google can thus reduce risk and uncertainty for its handset partners, thereby making Android more attractive.

Think about it. One of the biggest features of the Android OS for device makers was the license fee: free. Free, as Techdirt readers know, offers some very powerful mathematical and business implications. Suddenly, building an in-house OS for your car stereo or TV remote control may look less attractive than a more powerful, free, Android OS. Same goes for tablets, fridges, netbooks, or phones. But if MSFT and Apple (and countless others) can layer up license fees, the attractiveness of Android starts to diminish. The power of 'free' disappears, and instead, uncertainty and risk of lawsuit reign supreme.

So, the deal results in two opposing forces for the future of Google: IP cost and risk mitigation, and potential channel conflict. If Google can succeed at making the IP risk mitigation more important than the channel conflict for the OEM vendors of the world, thereby winning more handset and device partners, the Motorola purchase can be a success. If channel conflict is the more important part of the equation, Google loses big. I wonder if Google might someday sell off the handset maker, but keep the IP. Big news, either way. It'll be interesting to see how it plays out.


Reader Comments (rss)

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  1.  
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    Saleh, Aug 16th, 2011 @ 7:27pm

    Is this anything but an IP play?

    Reading the news on this, I thought the headline should be more along the lines of "Google Spends $12.5 Billion to Buy Motorola Mobility Patents... And the Company."

    Google may use Motorola as a testbed of sorts. But, Google's strength comes from having multiple handset makers adopt Android, so it's pretty definitely not in the company's interest to compete with its partners.

     

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  2.  
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    out_of_the_blue, Aug 16th, 2011 @ 7:54pm

    IF you can't get clear of patents in court, then how

    does having more of them help? Google is either infringing or not. Since fighting, their position is obviously not. Retaliation isn't going to help with a loss, as later cases must be separately tried, and is unnecessary if not convicted. And if the patents were any good for the purpose, then Rotomola would have already used them.

    So I'm betting that Google's reported $39 billion in cash and equivalents just inspired rashness.

     

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  3.  
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    Chris Rhodes (profile), Aug 16th, 2011 @ 8:04pm

    Re: IF you can't get clear of patents in court, then how

    Mutually assured destruction. The threat of a counter-suit gives other companies an incentive to settle and cross-license patents.

     

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  4.  
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    Anonymous Coward, Aug 16th, 2011 @ 8:21pm

    Re: IF you can't get clear of patents in court, then how

    Much of this story is sort of repeating what Mike said yesterday, which didn't add up to very much.

    Motorola is valuable as a brand, as access, and as a front for Google's phones. As much as Google can go out and order up phones from HTC, Foxxconn, or just about anyone else, they have a brand that leaves half the people specifically avoiding doing business with them. Some people love Google, others hate them with a passion. Google is not good with the public or handling customer service.

    Android has been a great move to put Google one step away from the public, and having multiple companies using it has been another great step, separating them further from the public. Motorola is one of the big players in cell phones, a known brand, a company that almost every one time cell phone user has had a phone from at one time or another (brick anyone?). Google has bought a mainline brand, and they can put their marketing power and reach to work getting Motorola back to being a top brand.

    The free cash in Motorola's operation is just about enough to pay for the takeover without any changes, and any increase in sales will go pretty much directly to the bottom line.

    Patents are nice, but without a product portfolio, a market, connections, and the ability to produce the phones, Motorola wouldn't be a good buy.

    Further, because of the supposed "patent thicket" that Mike keeps whining about, it would seem weird that Google would want to buy into legal trouble, and it is doubtful that they would put themselves into a bad position. It doesn't seem very logical.

     

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  5.  
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    Shane, Aug 16th, 2011 @ 8:46pm

    Android is not Free

    I use to be under the impression that Android was a free OS for OEMs. This is NOT TRUE. All of the OEMs get their builds with the specific chipset they purchase for the phone. Say the OEM buys the 3G chipset with processor and other "on board" gear from Qualcom the fee they pay includes the "cost" of the license for the OS. Currently the cost of an OS bundled chipset is the SAME for Android and Windows Phone. So Free is not Really Free. This is also the main reason for delays in the deployment of new builds...Qualcom > OEM > Carrier > Customer. Something else to note is that Qualcom "bundles" particular IP and protections with the chipset, so some of these patent issues should be moot.

    Techdirt should really do an article about the OEM BOM (Bill of Materials) that is the magic whole number that they charge for a wholesale phone. The black box that includes some crazy stuff, is almost more concerning than these other fights. Nearly "trojan" code integrated at the chip level that has a license fee but a feature "ransom" to enable the code. Then there is the Google penny for every press of a search hardkey on Android phones.

    Feels like one big Ponzi scheme.

     

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  6.  
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    Derek Kerton (profile), Aug 16th, 2011 @ 9:12pm

    Re: Is this anything but an IP play?

    It was totally "buy one get one free". The company is not worthless, of course, but it was not the part that Google sought out, it was just part of the package deal.

     

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  7.  
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    Jed, Aug 16th, 2011 @ 9:17pm

    Software patents

    A while back there was a post about a lawsuit challenging the validity of software patents. Something was said about either a circuit or appeals court decision stating that software patents are not explicitly included in patent law, and that congress should address this issue. Congress hasn't addressed this issue and that case or another one will eventually make its way (potentially) to the Supreme Court.

    That is the context of my question and here is my question. What impact would a Supreme Court decision that invalidates all software patents have on the technology sector?

     

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  8.  
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    Derek Kerton (profile), Aug 16th, 2011 @ 9:40pm

    Re: Android is not Free

    Where do you get your information? Android is offered free of charge by Google's Open Handset Alliance. Simple.

    Qualcomm is not in the driver's seat when it comes to Android, although they are a leading chip vendor for Android phones.

    Just about any processor based on the ARM (yet another company) chip architecture can run an Android smartphone. I'm not sure if you are just using Qualcomm as an example, or if you think they are somehow the ones really in control. But you do know that several other chip vendors compete for the Android market, right? Most notably Nvidia with their Tegra line.

    So you're saying that since an OS + chipset bundle isn't free, the OS isn't free? That's about as useful as my saying the Android OS and a Starbucks will cost you $4. Really, the cost is mostly in the coffee. Well, all of it, since Android is free.

    Now, as I said, Google doesn't indemnify it's OS customers for any licensing lawsuits they get. This make sense, given the price...you know...of free. MSFT, in contrast, indemnifies Windows Phone OS customers against claims as part of their $15 license fee. So therein lies the point of my whole article. That leaves a big element of risk for Android OEMs, and that specter is coming home to roost. The Motorola patents will help Google defend Android OEMs from attack, and hopefully bring the price back down, you know...to free.

    The reality for Android OEMs was that the OS was becoming "free + external costs" not because Google charges anything, but because of the MSFT license of $5, and the risk of future similar fees from other patent holders.

    I think the source (and more correct version) of the argument you are making is this:

    http://www.businessinsider.com/android-costs

    Those are MSFT talking points about how "Android isn't really so free, so you may as well use our OS." Ballmer also said as much here:

    http://www.gottabemobile.com/2010/10/04/ballmer-androids-not-free-because-of-license-fees-t o-microsoft/

    If you are going to talk about "Google penny for every press of a search hardkey on Android phones." please, drop a reference link or two. I've never heard of this.

     

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    The eejit (profile), Aug 16th, 2011 @ 11:38pm

    Re: Re: IF you can't get clear of patents in court, then how

    However, it gives Google a BIG R
    ED BUTTON to push, if Apple and Microsoft decide that the Nortel and Novell patents are worth the hassle in court.

     

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    mike allen (profile), Aug 17th, 2011 @ 12:17am

    In Europe we don't allow patenting of software copyright yes it is surely possible for the USA to come to the same conclusion and stop all patents as we have.

     

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  11.  
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    Shane, Aug 17th, 2011 @ 1:03am

    Re: Re: Android is not Free

    Derek, I greatly appreciate your comments. And please know I am not trying to waive the flag for any other party.

    I agree that Android as an OS is free, with no other explicit promises. However the reality is that for OEMs and Carriers they are seeing a charge outside of the "bounty" that others are extracting. I was simply trying to make the case that for a majority of handset makers and service providers the "whole number" cost they get when gaining all the supported items they need to make the core components work with the OS, there is some cost, in addition to that paid to others like Microsoft that are collecting a bounty.

    Since Android the OS is free, but those that would put it on a phone are not able to pass that potential cost savings onto the customer it is a major hit to the platform.

    I agree that the patent Cold War of escalating IP threats are not helping the industry and not rewarding hardwork in the form of execution in market. But if that were settled today, and this combat was off the table, there are still major issues with major players and middlemen that are not passing on their OS chargebacks to Googles wallet or customer savings.

    I look forward to the future of Android and the new Google/Moto tag-team, not matter what the strategic reasons for the purchase it is sure to cause more waves in the market/industry. But Android has been doing that since day one.

     

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  12.  
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    darryl, Aug 17th, 2011 @ 2:05am

    Hail the value and worth of Patents !!!!

    It's funny that most here still consider patents and IP worthless.

    When in the real world, from the people and groups who actually DO THINGS and create things of value place a value on knowing how to do things.

    I will say that again for you..

    the groups that want to actually create new things VALUE knowing how to create those things

    The other option and Mikes (and co) preferred option is wait and steal.

    ie, you wait until someone else develops an idea, then you steal it and try to make a buck on it.

    Clear, this does not work, and industry (and most of the planet) understands this perfectly.

    Do you honestly think that Google would have pain $12.5 Billion dollars, if MMI did not have the number of patents they had?

    Do you think MMI's value would still be the same if patents were 'reformed' in the way Mike (and co) promotes ?

    So without IP, ie without KNOWING HOW TO DO SOMETHING, that you are capable of doing it ? if so how ??

    (by employing wait and steal ?)

    As we all know here, (or should know) a Patent is a METHOD of acheiving A RESULT.

    A patent is ****NOT**** THE ONLY possible method of how you can achieve a result.

    So you have several choices, you can be smart enough to develop your own method of achieving the result, you can buy a patent off someone who is smart enough to develop A method of achieving a result.

    Or you can wait and steal !!.

    Wait and steal sounds good at first, but in the long run it means you are always behind the curve, and allways behind the time, and you display to the world that you are incapable of creating your own method, and incable of fairly paying someone who IS smart enough to develop a method.

    Google, obviously values patents, to the tune of Billions of dollars.

    If MMI did not have those patents (that mike thinks are worthless) then there is no way on earth Google would have been interested in MMI.

    Google did not purchase MMI as a "war chest", they perchased MMI because they wanted to KNOW HOW TO DO THINGS, not being smart enough or willing to develop their own methods, they used the only tool they have in their toolbox, that being MONEY.

    They use that money, and say to MMI, "please show us how to do things, so we can do them too, and we will PAY YOU for that IP for that knowledge.

    it is the way the world works, if you do not know how to drive a car, you hire someone to drive for you, or you take a taxi, or a bus.

    Or you can acquire the skills to drive and buy your own car.

    Google has hired a huge taxi, they are not capable of driving themselves, therefore they pay money for value in return.

    That VALUE is the knowledge of how to do things, its A METHOD of achieving a goal or result.

    This is proof that patents are highly valued in industry, and that industry correctly places high value on being able to do things.

    they dont "wait and steal", if they want to lead, or innovate, but they have the option (as we all do) to purchase the IP and skills and knowledge off others to achieve our goals.

    it is really that simple, clearly it is not the patent that has value, it is the information regarding a specific method to achieve a result that has value.

    Industry sees that, and acts upon that.

    Those who cannot innovate, immitate, or acquire innovations from other sources (mmi).

    If it was a 'war chest' then they would immediately release all those patents into the public domain, and destroy the patent system in that area, do you think Google is going to do that ?

    Do you believe that Google is just going to sit on those patents for a rainy day, too attack other companies trying to enforce their patents ?

    Or do you believe that Google will use those patents those methods of acheiving a result and put that IP into products and add value to their company ?

    Google knew what they did not know, they knew that they are not capable of developing methods by themselves, they knew what they did not know. So they found a company that knew what google did not know how to do, that Google WANTS to do, and they purchased that company.

    Mike and other anti-patents appoligists must be crying themselves to sleep every night now, knowing how much more value is placed on what mike calls "junk" and worthless patents.

    Do you believe that there will be major (or any) patent reform that will risk the massive loss of value industry places on knowing how to do things ?

    How from now on Mike (and Co) do you think the perception of the value of patents will be seen by industry, governments and the general public ?

    If you got patents, if you know how to do something in a way no one else can do, that is highly valued by industry.

    Because industry likes to do things !!!! does that surprise you ?

    I would surprise me if you thought they dont !

    Or do you take Mikes mantra to heart, and the best thing industry can do is wait and steal?

    What happens if everyone decides to "wait and steal" ?
    They will all be waiting for a very long time ! forever.

    No patents no IP, no progress, no products and no future.
    (and no hope).

    But if you happen to KNOW how to do something, that is value, because if you know how to do something, that others want to have done for them. THEY WILL PAY YOU.

    But if you do NOT know how to do it, ANY WAY, then you cannot crate something someone will pay for.

    If you cannot do anything, you cannot sell anything.
    If you cannot do something, you cannot sell something.

    knowledge is the only value you have, and patents are knowledge.

    A motor car, is $50 dollars worth of steal, but it is the application of IP, of knowledge that transforms that $50 dolars of steal into a $50,000 dollar motor car.

    If you do not have the knowledge to turn steal into a gearbox, you can have as much steal as you like but you will never build a car with it.

    it is the knowledge that is of value, no one would find a use of a lump of raw steel, but everyone can find a use for that steel if IP has been applied to it.

    Google see's this fact, as does every other successful industry or company.

    Everyone who creates things or who uses the product of their knowledge to survive and make a living understands this.

    That leads me to conclude that most people who follow Mike (and Co) idea's are the small group that adhears to the wait and steal principle.

    Mike, this Google things just shows the world how wrong you are !.

    Do you believe there will be patent reform and a devaluing of patents (even for software) now ?
    Good luck with that.

    Mike, you have stated before that in responce to your Google adds you get very little money from Google, YOU Mike paid to Google to buy MMI.

    Google had that money because you screwed you Mike !!!.

    Just imagine how much extra income you could of gotten if Google did not have to save up to buy knowledge of how to do things ?

    It must be very upsetting Mike to know you helped promote so effectively how good patents are for the economy and for industry.

    And ensuring patents remain as valid and strong as they have allways been.

    All thanks to money Google extracted from you !!! :)
    That must REALLY piss you off!!!! All that money you should of received being spent on purchasing PATENTS !!!!!.

    That is so very amusing !!!...

     

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  13.  
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    Lawrence D'Oliveiro, Aug 17th, 2011 @ 2:07am

    Re: Android is not Free!?

    Yes it is. Look at third-party Android distributions like Cyanogenmod. Do you think they could survive if they had to pay any corporate-style licensing fees? Yet their software is just as good in quality as the big boys—Samsung admitted as much when they gave their latest-hawtness Galaxy S II phones to the top guys on the project, the only request being to get the software running on them.

     

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  14.  
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    Mark Murphy (profile), Aug 17th, 2011 @ 3:14am

    Re: Android is not Free

    All of the OEMs get their builds with the specific chipset they purchase for the phone.


    And how many OEMs have you directly discussed this with? I have direct dealings with many Android OEMs about Android, and your explanation would come as a surprise to them.

    Then there is the Google penny for every press of a search hardkey on Android phones.


    And your proof of this is... what, exactly?

     

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    NotMyRealName (profile), Aug 17th, 2011 @ 3:27am

    Re: Hail the value and worth of Patents !!!!

    I think you may be misunderstanding a few things.
    First: nobody ever said all patents were bad. The common theme, I believe, is that overly broad, ridiculous, or patents on things the rights holder has no intention of producing are bad.
    Second: Google doesn't short people what they are owed because they bought something. The say .5c per click or whatever it is and that's what you get, -not- oh we bought motorola this week you only get .05c per click now.
    Third: When referring to the iron/carbon alloy, steel is the proper spelling.

     

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  16.  
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    Just John (profile), Aug 17th, 2011 @ 4:36am

    Re: Android is not Free

    I van officially tell you, 100%, that you have no clue what you are saying. If I gave you my work email address, you would realize in fact we make a well known tablet that is on the market as well as other Android phones.

    In fact, one of my job duties is the as primary Google contact window. Want to know what that means? I know every cost that goes into my companies device. Want to know our Google royalty? $0.00 USD.

    In fact, our cost basis is simply the shipment fees of the device to Google for certification. Now, want me to personally email Mike and Derek from my work email so they can confirm that I do indeed work at a company they would instantly recognise?

    Now please do not talk about what you do not know about

     

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  17.  
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    Fred, Aug 17th, 2011 @ 4:40am

    Google-Motorola deal

    Good post Derek.
    In general, I'm under the impression that people do not know what to expect. We did a quick post tracking all mentions around the Googlerola deal for the past 5 days http://bit.ly/googlerolainsights and most of the mentions are neutral and positive (at least for now)

     

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  18.  
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    Just John (profile), Aug 17th, 2011 @ 5:03am

    Re: Re: Is this anything but an IP play?

    I still do not 100% agree with you Derek. While I would say that the patents may indeed be a major reason, many in the Android industry also believes this may also become the hardware r&d side so Google can make their own hardware for alpha level development. After saying this, I do agree that they probably won't enter channel distribution.

     

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  19.  
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    Anonymous Coward, Aug 17th, 2011 @ 5:39am

    Re: Re: Re: IF you can't get clear of patents in court, then how

    It is circular logic, because without buying Motorola, Google wouldn't really care if anyone pushed the big red button.

     

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  20.  
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    DannyB (profile), Aug 17th, 2011 @ 5:51am

    Re: Is this anything but an IP play?

    Let's also not forget that Google bought 1000 patents from IBM earlier this month. IBM is one of the world's largest patent holders. I wonder what goodies were in those, no doubt, carefully chosen patents?

     

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  21.  
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    DannyB (profile), Aug 17th, 2011 @ 5:54am

    Re: IF you can't get clear of patents in court, then how

    The name of the game is "let's burn each other's business to the ground!".

    You guys throw Molotov cocktails at my store, I'll throw some back at you. You throw them at Samsung and HTC, they'll throw some back.

    This is going to turn very ugly.

    They don't care what the patents are over, they just care at this point that they can destroy the other party's business, because that is what the other parties are trying to do to them.

     

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  22.  
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    DannyB (profile), Aug 17th, 2011 @ 5:57am

    Re: Re: Re: Android is not Free

    You are confusing free and Free.

    (free cost vs freedom)

     

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  23.  
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    James, Aug 17th, 2011 @ 6:11am

    Re: Is this anything but an IP play?

    Actually, Motorola has had a lawsuit against much of the IP property that Apple is using for a long time. So that property already has been used against Apple.

     

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  24.  
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    Anonymous Coward, Aug 17th, 2011 @ 6:47am

    Wouldn't it have been cheaper for Google to buy Congress than Motorola?

     

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  25.  
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    Anonymous Coward, Aug 17th, 2011 @ 7:19am

    Re: Re: Hail the value and worth of Patents !!!!

    Fourth: troll. Citation where Mike explicitly condones stealing. And proof there are no comments against other trolls like you from Mike where he crushes the same arguments ;)

     

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    CommonSense (profile), Aug 17th, 2011 @ 8:06am

    Re: Re: IF you can't get clear of patents in court, then how

    "Patents are nice, but without a product portfolio, a market, connections, and the ability to produce the phones, Motorola wouldn't be a good buy."

    HUH??? Google already had one of the largest product portfolio's (Products from HTC, LG, Samsung, AND Motorola), one of the biggest shares of the market, and they already had an ability to produce phones (Nexus series). They gained NONE of that from this purchase. They did gain 14,000+ patents though. Maybe you need to read this post again, because you seem to have missed, well, all of it.

     

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  27.  
    identicon
    JN, Aug 17th, 2011 @ 8:39am

    NOT useful patents

     

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  28.  
    identicon
    JN, Aug 17th, 2011 @ 8:40am

    NOT useful patents

    I suspect that Google should look more closely at what it's purchased - Motorola's patent portfolio will probably not turn out to be as useful as they thought.

    1) Much of it is already licenced
    2) It didn't help Motorola when it was involved in IP litigation

    It might rest on the "patents pending" - we shall see, but i doubt it.

    Looks like a panic buy.

     

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  29.  
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    Onnala (profile), Aug 17th, 2011 @ 11:29am

    Patent's Pending

    Way to much back and forth going on here. However the real clue to this being a very good move are the pending patents and that Microsoft hasn't yet cross-licensed with Motorola.

    However, the pending patents are going to be the real killer. For one most of the pending ones are going to be the patents that cover the Original Droid and MotoBlur.

    Over the last two years Apple has been forced in adopt many of the same functions that Android was doing in 2008 and the droid was doing in 2009. So many of the features that Apple and Microsoft are implementing on their phones to compete with Android today, are probable covered by some pending patent.

    I will give it maybe two years before this really sinks in.

     

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  30.  
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    Derek Kerton (profile), Aug 17th, 2011 @ 2:08pm

    Re: Re: Re: Is this anything but an IP play?

    Perhaps. But that's something that they could do with a partnership. I think they already do it with the Nexus phones.

    Apple does it while still outsourcing all production.

     

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  31.  
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    Derek Kerton (profile), Aug 17th, 2011 @ 2:12pm

    Re: Re: Re: Re: IF you can't get clear of patents in court, then how

    What?

    "without buying Motorola, Google wouldn't really care if anyone pushed the big red button"

    So, Google didn't care that Apple pushed their Big Red Button and launched their patent weapons against the Samsung 10.1 Tab, winning injunctions against it's sale in Europe and Australia?

    So, Google doesn't care that MSFT pushed their button, and gets a tax of $5 on every ANDROID device sold? Doesn't care that MSFT makes more money from Android than Windows Phone 7 and that Ballmer uses that as a selling feature of Windows Phone?

    You are very wrong.

     

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  32.  
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    Derek Kerton (profile), Aug 17th, 2011 @ 2:36pm

    Re: Hail the value and worth of Patents !!!!

    Sir,

    When considering your comment on the merits of:

    - organization
    - grammar,
    - spelling
    - brevity / value per word
    - logic
    - awareness of which author you are criticizing
    - awareness
    - avoidance of tautology

    I can only say, as politely as possible, that your work needs improvement.

     

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  33.  
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    Derek Kerton (profile), Aug 17th, 2011 @ 2:49pm

    Re: Re: Hail the value and worth of Patents !!!!

    ...and "could have" is not "could of". That's actually where I gave up reading. I find a comprehension of basic verbs, particularly the very common use of 'to have' with a corresponding past participle, is something that second year English As A Second Language students have mastered (of mastered?). So when native speakers can't conjugate basic verbs correctly, I put them in the lower quadrant pretty quickly. "Could of" isn't just a typo...it's a failed education.

    ...and neither Masnick nor I have ever said that "patents are worthless". What idiot would interpret Techdirt as saying that? Under the current laws, patents are obviously VERY valuable. What we do is: question the policy behind those laws.

    The point commonly made here is: we do not believe that software patents have a net positive impact on the progress of science and the useful arts. We see too many examples of negative implications, and too few examples of positive ones. The validated research backs up our position, but policy, powerful lobbies, and "common sense" back up the current regime.

     

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  34.  
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    Derek Kerton (profile), Aug 17th, 2011 @ 3:02pm

    Re: NOT useful patents

    Valid points, and time will tell. But what we suspect with patents is that sheer number is starting to represent power. With a legal regime that so strongly favors patent holders, grands broad, vague patents, 14,000 could effectively cover EVERYTHING about a mobile phone. That's just like the stockpile of nuclear weapons could blow up the earth many times over, and why we draw the analogy of Mutually Assured Destruction.

    It doesn't matter if the patents are precisely relevant, or if they remain valid after review, or if there was any prior art. What matters is whether you can use the patents to impede the progress of your rivals. Are the patents good enough to go to court? Are they even good enough for an injuction? If so, that's good enough. You don't have to win. There's no penalty for suing and losing.

    And, since patents are deliberately written so broadly, and since the USPTO grants these vague, broad patents. It is highly likely that there will actually be a few winners within a treasure trove of 14,000. And these are the patents from the company that made the FIRST cellular phone. Make no mistake, despite what some may think of Motorola, they have contributed a tremendous amount of real innovation to the industry. And they've acquired a bunch of other companies that have some relevant IP, say Good Technology for example, or sync technology like Starfish or Zecter. Could it be that Apple's Wi-Fi sync violates some Motorola patent? Sure, why not, just as an example.

    I promise you one thing, no practicing entity - not Apple, Microsoft, not Nokia, not Samsung - wants to have Google point that IP cannon at their face, and bet that they're just shooting blanks.

     

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  35.  
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    Just John (profile), Aug 17th, 2011 @ 9:25pm

    Re: Re: Re: Re: Is this anything but an IP play?

    Actually, given we are one of their partners, I can completely understand why Google may in fact want more control over the hardware that they are trying to innovate new OS ideas on.

    See, Google still has to rely on the hardware producers to send them samples of their innovative new ideas, which sometimes Google doesn't get.

    It cannot control what the partners are working on, since normally Google is approached when the producers encounter problems, not when they are planning their new innovations around the Android OS.

    It actually puts Google on the reactive instead of proactive, because hardware producers comes up with an idea they did not think of, and then Google must react, trying to make the system the vendors are working on work correctly, sometimes without the necessary tools.

    Also, you don't tend to find Google engineers working on vendor sites, you find the vendors working on Google sites, which limits their exposure to what is being done on their OS. Honestly, I can understand how it would be easy to assume that it works easily, but it isn't as smooth of a process as you think it is.

    It is also very different from Apple's models.
    All Apple devices are designed by Apple, with the specs given to the OEM to make the final product.

    Google gives required specs for things such as the Nexus line, but does not actually design the phone. HTC and Samsung designed them, so Google only gets the information HTC ad Samsung choose to share with them. Obviously, it is in these companies to be as open and forthcoming as possible, given that Google might change who is making their stuff if they are not happy, but transparency does not occur in the "ideal" world, but instead you are still limited by normal communications. What people choose to share, what they choose to not share, and how the messages are perceived by both sides.

    Again, not saying patents have nothing to do with it, but I am saying I do not think that 100% of the Motorola pie is only for its patents, and for nothing else.

     

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  36.  
    identicon
    patent litigation, Aug 23rd, 2011 @ 5:35am

    Although its entry into the patent-war big leagues didn't start out very smoothly, perhaps Google is better off now with the IBM and Motorola portfolios than with the Nortel patents. It will certainly have more patents at its disposal now than if it had bid higher than Pi at the Nortel auction.

     

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  37.  
    identicon
    iphone 5, Aug 24th, 2011 @ 6:06am

    Interesting. The main reason the iPhone has dominated the Android is because Apple has full control over both the software and hardware on the device, allowing a more "integrated experience", if you will. Now that Google has this is well, it will be very interesting to see if the soon to be released iPhone 5 can maintain Apple's dominant position.

     

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  38.  
    identicon
    Rich, Apr 12th, 2012 @ 3:50pm

    Such a well written column!

    This column is so well written, with such good insight. I really appreciated reading this and will be sure to be back to the site :)
    I wish to leave also a column I wrote about Facebook taking on Google in search (the threat of it)
    http://www.richmakesyourich.com/2012/03/most-interesting-company-in-world-its.html

    Anyways, i should have probably looked around and read your website before i wrote it. I;m sure you have something here on it if I dig.

    Cheers, and thanks for the column. I realize my reply is late!

     

    reply to this | link to this | view in thread ]


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