John Paczkowski

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Defense Spending: Google Arms Itself With Moto Patents

With its $12.5 billion deal to acquire Motorola Mobility, Google is gaining not only a major Android handset manufacturer, but a vast trove of intellectual property with which to defend it.

As Google CEO Larry Page wrote in a blog post announcing the deal:

“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.”

Motorola, after all, holds what is said to be one of the strongest patent portfolios in the wireless industry with some 17,000 patents granted and another 7,500 pending across a wide range of technologies–2G, 3G, 4G LTE, and video compression and decompression. This would be one of the biggest patent purchases ever and provide Google with quite an arsenal, one that it may be able to use to indemnify its Android licensees outright. Certainly that’s the impression one gets from reading the canned quotes Google’s assembled from its Android partners (or wrote for them …).

“We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem.”
– J.K. Shin, President, Samsung, Mobile Communications Division

“I welcome Google’s commitment to defending Android and its partners.”
– Bert Nordberg, President & CEO, Sony Ericsson

“We welcome the news of today’s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.”
– Peter Chou, CEO, HTC Corp.

“We welcome Google‘s commitment to defending Android and its partners.”
– Jong-Seok Park, Ph.D, President & CEO, LG Electronics Mobile Communications Company

Notice a common theme here? It’s the phrase “commitment to defending Android and its partners” (during a call with Google execs this morning, it was the word “protect”). Which speaks to what this acquisition is really about: gaining a strong IP position in wireless from which to protect and defend the Android ecosystem against mounting legal challenges from a cabal of rivals Google claims is conspiring to hamstring the OS’s growth by buying up some of the mobile industry’s most valuable IP.

In July, Google lost a bidding war to buy up some 6000 patents from Nortel through which it hoped to achieve something similar. With this deal to acquire Motorola Mobility it’s managed something it believes is even better. The company’s patent portfolio is about 4 times larger than Nortel’s and it will be Google’s alone, not shared among members of a 6-company consortium.

In Google’s hands, Motorola Mobility’s patent portfolio could become a club with which to beat that cabal down and a deterrent to anyone else considering taking Google or one of its Android licensees to the mat. Recall that in October of 2010, Motorola sued Apple, claiming infringement of 18 patents related to wireless communication technologies, antenna design, and software application management, among other things.

As Motorola Mobility chairman and CEO Sanjay Jha said just last week, “We have a very large IP portfolio, and I think in the long term, as things settle down, you will see a meaningful difference in positions of many different Android players–both, in terms of avoidance of royalties, as well as collecting them. And that will make a big difference to people who have very strong IP positions.”

People like Google and its 39-plus Android OEMs.

“I think that we’ve seen some very aggressive licensing demands in the Android ecosystem,” Google Chief Legal counsel Dave Drummond said during a call today to discuss the Motorola deal. “And we think that having the patent portfolio will make sure that Android is open and vibrant, and the kind of platform that lots of companies can remain on.”

[Image credit: Patent chart courtesy Trip Chowdhry, Global Equities Research]

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