Quick and easy fix for all Android patent problems. Google should buy Motorola

You may not know it from the meteorically rising device sales, but right now Google’s Android is in deep trouble.

It is being besieged by various patent holders, demanding licensing fees or an outright stop of Android device sales. Furthermore, those suing Google right now are no ordinary patent trolls. The biggest challenges come from such tech giants as Oracle, Microsoft and Apple.

And there is very little Google and Android OEMs can do about it. Except to try and drag the whole process in courts for as long as they can, searching for some other way out. Google is a young company, with very small patent portfolio to use in a fight. And there are some indications that they have played fast and loose with IP issues, while creating Android. In the end, anyone putting Google’s mobile OS on their gadgets, might end up paying $60 or more per handset in patent fees.

But Google has a way out. An easy fix, that could solve all their Android IP troubles at once:

Google should buy Motorola Mobility Holdings (MMI).

Motorola’s mobile device and home entertainment unit has been spun off of into an independent company at the beginning of this year. And it is not doing too well.

Motorola’s CEO bet their whole company on Android, and they have had some early successes, including the launch of the original Verizon Motorola Droid, which started the Android growth explosion. But now – due to an un-inspiring product mix and execution blunders like the delays of LTE device releases, Motorola is being killed in the market by HTC and Samsung. While Motorola’s 80% Android device unit growth this year might seem impressive on the surface, it is actually very low. Their main Asian rivals are now growing much faster (HTC at 124% a year and Samsung at 400%) and from a higher initial unit base. Thus eating away at Motorola’s market share and profits. After a few profitable quarters MMI started losing money again.

The way things are unfolding in mobile, the future of Motorola Mobility as independent company is very much in doubt. Motorola’s management is already showing a signs of fatigue. And they are signaling their readiness to sell to Google.

I first noticed interesting undertones in Sanjay Jha’s (Motorola’s CEO) interview with Fortune a month ago. Here are the interesting tidbits:

“I expect consolidation to occur. Our customers are consolidating, and our supply base is also consolidating. But my view is that consolidation occurs in some interesting ways. I’m not convinced that handset manufacturers acquiring other manufacturers is the best way for value to be created for shareholders. Consolidation across content manufacturers and hardware and software manufacturers — I see a bunch of different ways for this consolidation to occur, to create shareholder value and create different structures to the industry… Do we expect Motorola to be an independent company? I don’t know yet. I hope very much that we are. I believe our strategy is the right strategy and will deliver the shareholder value we’ve promised.

Q.It sounds as if Motorola consolidating possibly with a software outfit of some kind is not unimaginable?

A. There are lots of opportunities for us to combine different resources and create more shareholder value.

Sanjay Jha does not sound like a CEO who strongly believes that what he is doing will make Motorola a success and keep them independent, does he? Any chance of Peter Chou (HTC’s CEO) saying anything remotely like this? And that “software outfit” they are talking about – can they mean anyone BUT Google here?

Last week Motorola provided another interesting hint. During their earnings conference call, Sanjay Jha started touting Motorola’s patent portfolio – 17000 granted U.S. patents, 7000 pending. And said that they plan to start monetizing it more aggressively, by going after “new entrants to mobility industry with big revenue streams”. The problem is – all those new entrants are predominantly using Android. By going after them, Motorola will be hurting ecosystem on which it depends 100%. Why would they do such a thing? One reason might be that they do not really care, as long as they can get some additional cash from their patents, and make their own Android devices a bit more competitive, at least on price.

But there might be another reason – Sanjay Jha might be sending a veiled hint/threat to Larry Page: “Just buy us, or else!”.

Recently Google was ready to spend upwards of 4 billion dollars for Nortel’s 6000 strong U.S patent portfolio, but have been outbid by a consortium led by Apple, RIM and Microsoft. Currently Motorola Mobility’s market value is around $6.5 billion. And it’s 17K patent strong portfolio is probably of much better quality to anyone in mobile, then Nortel’s was. So just by offering $10-12 billion for Motorola, Google will actually spend less per relevant patent, then it was willing to spend on Nortel.

And, by buying Motorola, Google will get a world class mobile device hardware R&D team, that can help push Android limits with a Nexus line. They then could use their Nexus devices as a state of the art reference models. And send a clear signal to OEM partners like Samsung and HTC, that Google is not interested in getting into mobile sales biz, if partners continue to do a great job with their own Android gadgets. I think OEM’s will be more happy with such arrangement, then with what Google is doing now – giving one of them early exclusive access to latest versions of Android, thus leaving others at a considerable disadvantage.

As for the rest of Motorola business – the sales&logistics organizations, set top box business, etc; – they can sell it in pieces and make some nice profit in the end. Who knows – Google may even find something good and interesting there for their fledging TV initiative.

And, if Google made a serious offer for MMI – there is no danger of a bidding war like the one over Nortel’s patents, erupting. The key player – Apple – is out of the game on anti-trust considerations. Microsoft is now firmly in bed with Nokia, and there’s too little synergies with what Motorola does today, for MSFT to put up a serious fight. The rest in mobile industry are simply to weak to win.

Android is a key strategic asset for Google, and it is now in a serious danger due to Google’s weak intellectual property portfolio. By letting Palm to go to HP, and losing out on Nortel bid, Google has already squandered two great opportunities to address a key vulnerability of one of their most precious assets.

With Motorola  deal, which will probably be cheaper then what they were ready to pay for Nortel portfolio, Google can now solve most of their intellectual property problems at once. They might still have to reach accommodation with Oracle, but with Motorola’s IP, nobody in mobile industry will be able to seriously impede Android growth via patents anymore.

The more I think about it, the more Google buying Motorola makes sense. I’m actually struggling to find any reason for Google not to buy Moto.

Can you name one?

 

Author: Stasys Bielinis

While I like to play with the latest gadgets, I am even more interested in broad technology trends. With mobile now taking over the world - following the latest technology news, looking for insights, sharing and discussing them with passionate audience - it's hard to imagine a better place for me to be. You can find me on Twitter as @UVStaska'

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  • Brother451

    Best x company should buy z company post I’ve seen in a long time. I completely agree. Plus, the one thing that would get me to buy a Motorola device would be if it had stock Android on it and none of that motoblur garbage on it.

  • Michel Lesoinne

    Where is the “correct the grammar mistakes” button when you need it?!?!

  • http://twitter.com/generosity9 Britain Demmick

    Very interesting idea. I’m not sure if Google wants to get into hardware manufacturing, but they definitely do need something to fight back with, or all of their handset makers will be in big trouble.

  • http://twitter.com/generosity9 Britain Demmick

    Very interesting idea. I’m not sure if Google wants to get into hardware manufacturing, but they definitely do need something to fight back with, or all of their handset makers will be in big trouble.

  • lem

    +1 this

  • gerrr!

    There isn’t much of a chance that Google would buy a manufacturer, for fear of crowding out its Open Handset Alliance partners.  Instead, MMI could sell a portion (or all) of its IP, in exchange for a perpetual license agreement, including if Google were to sell the patents.  Or The Open Handset Alliance could create a similar IP pool much like MPEG-LA does.

  • Anonymous

    The problem Google has is that of Microsoft – value chain .

    If a SW maker to an ecosystem of HW makers buys into HW then it pretty much kills it’s own ecosystem.

    Android currently lives through the likes of Samsung, HTC and the rest of the HW mfgs.

    If Google gets into the HW business, all those makers will disappear very quickly.

    Then it will be Google alone vs. Apple alone against MS with a growing ecosystem.

    Further, Google has no interest in SW business and especially not in HW business.

    It’s in cloud / advertising / software profiling business. It is even giving Android away for free.

    It is a much better strategy to leave most of the legal battles to the handset makers and just fight the big one against Oracle.

    That way it can avoid big disruptions to it’s core business (remember IBM lawsuits in the 80s?).

    No, I don’t think it makes sense to buy Motorola per se.

    Now, buying the patent portfolio alone or buying Motorola along with an investment partner to whom it divests the hardware business while keeping the patents, now that *might* make sense, but is a complicated deal.

  • http://www.staska.net Staska

    Agreed, that is a possibility. But the problem with buying just MMI’s patent
    portfolio, from Google’s POV, will be that I don’t think there is a way for them
    to buy it through direct negotiations.

    If they decide to sell it, MMI will probably have to solicit and receive
    alternative offers, otherwise they might be sued to oblivion by shareholders for
    failing to get the best price for it. And putting it up for auction will create
    the same problems for Google as in Nortel case. A rival consortium lead by
    Apple, with even deeper pockets then Google has. The price could skyrocket and
    Google may lose again.

    By offering to buy MMI outright, Google eliminates Apple as a bidding rival.
    I think that there is no chance that FTC and EU Competition authorities will
    ever approve Apple buying a major Android maker. The anti-trust issues are just
    too big to let such a deal pass. And, because of the deal with Nokia, Microsoft
    will probably be also on the sidelines if we are talking about outright MMI
    acquisition.

    With two strongest rivals out of the game, it should be fairly easy for
    Google to win the bidding was for MMI. And once they bought it – nobody says
    they have to keep it. They can keep the patent portfolio, and then sell the
    dumbphone biz and Moto brand to some Chinese upstart with global ambitions (e.g.
    ZTE or Huawei), home entertainment biz to someone else. Then decide what to do
    with Moto’s Android smartphone biz – keep it for themselves, or sell to ZTE and
    Huawei too.

  • http://www.staska.net Staska

    Agreed, that is a possibility. But the problem with buying just MMI’s patent
    portfolio, from Google’s POV, will be that I don’t think there is a way for them
    to buy it through direct negotiations.

    If they decide to sell it, MMI will probably have to solicit and receive
    alternative offers, otherwise they might be sued to oblivion by shareholders for
    failing to get the best price for it. And putting it up for auction will create
    the same problems for Google as in Nortel case. A rival consortium lead by
    Apple, with even deeper pockets then Google has. The price could skyrocket and
    Google may lose again.

    By offering to buy MMI outright, Google eliminates Apple as a bidding rival.
    I think that there is no chance that FTC and EU Competition authorities will
    ever approve Apple buying a major Android maker. The anti-trust issues are just
    too big to let such a deal pass. And, because of the deal with Nokia, Microsoft
    will probably be also on the sidelines if we are talking about outright MMI
    acquisition.

    With two strongest rivals out of the game, it should be fairly easy for
    Google to win the bidding was for MMI. And once they bought it – nobody says
    they have to keep it. They can keep the patent portfolio, and then sell the
    dumbphone biz and Moto brand to some Chinese upstart with global ambitions (e.g.
    ZTE or Huawei), home entertainment biz to someone else. Then decide what to do
    with Moto’s Android smartphone biz – keep it for themselves, or sell to ZTE and
    Huawei too.

  • http://www.staska.net Staska

    Agreed, that is a possibility. But the problem with buying just MMI’s patent
    portfolio, from Google’s POV, will be that I don’t think there is a way for them
    to buy it through direct negotiations.

    If they decide to sell it, MMI will probably have to solicit and receive
    alternative offers, otherwise they might be sued to oblivion by shareholders for
    failing to get the best price for it. And putting it up for auction will create
    the same problems for Google as in Nortel case. A rival consortium lead by
    Apple, with even deeper pockets then Google has. The price could skyrocket and
    Google may lose again.

    By offering to buy MMI outright, Google eliminates Apple as a bidding rival.
    I think that there is no chance that FTC and EU Competition authorities will
    ever approve Apple buying a major Android maker. The anti-trust issues are just
    too big to let such a deal pass. And, because of the deal with Nokia, Microsoft
    will probably be also on the sidelines if we are talking about outright MMI
    acquisition.

    With two strongest rivals out of the game, it should be fairly easy for
    Google to win the bidding was for MMI. And once they bought it – nobody says
    they have to keep it. They can keep the patent portfolio, and then sell the
    dumbphone biz and Moto brand to some Chinese upstart with global ambitions (e.g.
    ZTE or Huawei), home entertainment biz to someone else. Then decide what to do
    with Moto’s Android smartphone biz – keep it for themselves, or sell to ZTE and
    Huawei too.

  • http://www.staska.net Staska

    Agreed, that is a possibility. But the problem with buying just MMI’s patent
    portfolio, from Google’s POV, will be that I don’t think there is a way for them
    to buy it through direct negotiations.

    If they decide to sell it, MMI will probably have to solicit and receive
    alternative offers, otherwise they might be sued to oblivion by shareholders for
    failing to get the best price for it. And putting it up for auction will create
    the same problems for Google as in Nortel case. A rival consortium lead by
    Apple, with even deeper pockets then Google has. The price could skyrocket and
    Google may lose again.

    By offering to buy MMI outright, Google eliminates Apple as a bidding rival.
    I think that there is no chance that FTC and EU Competition authorities will
    ever approve Apple buying a major Android maker. The anti-trust issues are just
    too big to let such a deal pass. And, because of the deal with Nokia, Microsoft
    will probably be also on the sidelines if we are talking about outright MMI
    acquisition.

    With two strongest rivals out of the game, it should be fairly easy for
    Google to win the bidding was for MMI. And once they bought it – nobody says
    they have to keep it. They can keep the patent portfolio, and then sell the
    dumbphone biz and Moto brand to some Chinese upstart with global ambitions (e.g.
    ZTE or Huawei), home entertainment biz to someone else. Then decide what to do
    with Moto’s Android smartphone biz – keep it for themselves, or sell to ZTE and
    Huawei too.

  • gerrr!

    I would think they could sell directly, considering IBM did so, you know?

  • http://www.mobileinfoplanet.com MIP

    Good analysis, and I agree; something big, like a Motorola purchase, will likely happen soon:

    http://www.mobileinfoplanet.com/2011/07/07/will-google-pay-android-royalties-to-microsoft/

  • http://plus.google.com/100780849097348485078/posts Stynkfysh

    Great blog post!  Couldn’t Google just sign a patent agreement with Motorola though?  Costs less, Motorola maintains autonomy, and Android is protected?

  • http://plus.google.com/100780849097348485078/posts Stynkfysh

    Great blog post!  Couldn’t Google just sign a patent agreement with Motorola though?  Costs less, Motorola maintains autonomy, and Android is protected?

  • http://pulse.yahoo.com/_7J6XM6AFXIYOMKP2WDSLK2QKY4 Jim

    Now Motorola has NO reasons to exist as an independent company. They just can’t compete and lose money despite sales growth. Their patent portfolio is really powerful. 
    They can’t create (lazy, slow or no vision) WHAT customers want and seems like don’t understand the RULES: thin, powerful, visually perfect, sleek, looking and feeling premium aluminum smart devices, named properly and launched without anything that is not ready. And one more thing- *worldwide*, not in the U.S. on Verizon.

    Motorola will stop existing in the nearest 2 quarters, failing to compete with growing and growing giants HTC and SAMSUNG.

    Motorola Mobility could be bought by goliath SAMSUNG. Yes, they should be interested in this deal. 

    Another perfect combo is HTC-Motorola MERGER and ‘Motorola’ brand shutting down. It’s too aged. It’s cellular. It’s yeasterday. HTC is tomorrow. >>> In this scenario we will get new, heavy-weight HTC Corp., sitting on almost 18,000 wireless patents and Motorola’s stuff (with some cuts), working in growing, extremely dynamic, globally beloved, already very successful company.

    If you can’t compete with HTC, Motorola, merge with it;)
    Waiting.

  • http://pulse.yahoo.com/_7J6XM6AFXIYOMKP2WDSLK2QKY4 Jim

    Now Motorola has NO reasons to exist as an independent company. They just can’t compete and lose money despite sales growth. Their patent portfolio is really powerful. 
    They can’t create (lazy, slow or no vision) WHAT customers want and seems like don’t understand the RULES: thin, powerful, visually perfect, sleek, looking and feeling premium aluminum smart devices, named properly and launched without anything that is not ready. And one more thing- *worldwide*, not in the U.S. on Verizon.

    Motorola will stop existing in the nearest 2 quarters, failing to compete with growing and growing giants HTC and SAMSUNG.

    Motorola Mobility could be bought by goliath SAMSUNG. Yes, they should be interested in this deal. 

    Another perfect combo is HTC-Motorola MERGER and ‘Motorola’ brand shutting down. It’s too aged. It’s cellular. It’s yeasterday. HTC is tomorrow. >>> In this scenario we will get new, heavy-weight HTC Corp., sitting on almost 18,000 wireless patents and Motorola’s stuff (with some cuts), working in growing, extremely dynamic, globally beloved, already very successful company.

    If you can’t compete with HTC, Motorola, merge with it;)
    Waiting.

  • http://www.staska.net Staska

    Maybe. But I doubt that. 

    One thing is IBM selling a small part of it’s patent portfolio, probably very few of them related to mobility/communications, and, probably, bought by Google for it’s suit with Oracle and protect other parts of it’s core biz. 

    Quite another thing is Motorola selling a portfolio of communications/mobility related patents, highly relevant to their core business. Especially after the Nortel deal, when it was clearly show what it could be worth on the open market. 

    Even if they get upwards of $10 billion for it directly from Google, it can be argued that auction would have netted much more.And it probably will be argued

  • http://www.staska.net Staska

    Maybe. But I doubt that. 

    One thing is IBM selling a small part of it’s patent portfolio, probably very few of them related to mobility/communications, and, probably, bought by Google for it’s suit with Oracle and protect other parts of it’s core biz. 

    Quite another thing is Motorola selling a portfolio of communications/mobility related patents, highly relevant to their core business. Especially after the Nortel deal, when it was clearly show what it could be worth on the open market. 

    Even if they get upwards of $10 billion for it directly from Google, it can be argued that auction would have netted much more.And it probably will be argued

  • http://pulse.yahoo.com/_K3MVOVHEK4AZY777NI5KWHGL5U David Jenkins

    It seems Staska STILL cannot use “its” and he continues to use “it’s”. Pathetic.

  • http://twitter.com/RyaNCAA Ryan Knudson

    It would be HUGE. Motorola is already on the cutting edge of hardware, imagine what their phones would be like if they were used the way Google saw fit. 

  • http://profiles.google.com/kevintimmons11 Kevin Timmons

    See, if google doesnt up its IP, companies like HTC and samsung may be barred from importing phones into the U.S., thus killing android. By buying Motorola, they would get the IP they needed to cross licence and trade off IP for cash. Though i dont necessarily think that Google would buy a Hardware company, if they want to keep android alive, and make a little money in the Handset market, it would be wise. But Google could purchase motorola, and allow motorola to do business as usual, but google could have complete control over the UI and guarantee updates make it to those phones, and guarantee that under pressure it wont back off the android platform. I hope the Oracle suit goes Google’s way,  Oracle is a pile of crap, its too bad Sun had to sell out to them. Point being google needs to purchase intellectual property and fast.  

  • Anonymous

    The problem with that is that is does not provide patent protection for anyone else. 

    If Google buys the patents they can then offer patent protection to any firms that want to use Android for zero costs. 

  • Anonymous

    I pretty sure they can sell the hardware section off to someone else. 

  • http://plus.google.com/100780849097348485078/posts Stynkfysh

    I guess Google has to OWN the patents in order to counter-sue for patent infringement.  Although the consortium that bought the Nortel patents do not individually own all of them, do they?  What a friggin’ train-wreck.  I think I will patent the on-off switch.  That way, anything that turns off and on needs to pay me a royalty.   Like it would be some genius idea to do that…  Some of these patents are equally asinine. Apple patented putting a power plug on the side of their devices as well as the short edge so they can be docked in different orientations…. Genius!!!  Good thing that is patented.  Knobs.  Seems like there should be some sort of complexity requirement for technology related patents…

    I am off to patent the circle….  I think its available…

  • Brendan Robert Davis

    The main reason would be that it would shove the other hardware manufactures, in the Open Handset Alliance, into a corner with their stockholders; far more reasonable would be a purchase of their patent portfolio as Ichan suggested.  ( With the understanding that all of the patents would be freely available to members of the open handset alliance. )

  • Brendan Robert Davis

    The main reason would be that it would shove the other hardware manufactures, in the Open Handset Alliance, into a corner with their stockholders; far more reasonable would be a purchase of their patent portfolio as Ichan suggested.  ( With the understanding that all of the patents would be freely available to members of the open handset alliance. )

  • Brendan Robert Davis

    The main reason would be that it would shove the other hardware manufactures, in the Open Handset Alliance, into a corner with their stockholders; far more reasonable would be a purchase of their patent portfolio as Ichan suggested.  ( With the understanding that all of the patents would be freely available to members of the open handset alliance. )

  • Brendan Robert Davis

    The main reason would be that it would shove the other hardware manufactures, in the Open Handset Alliance, into a corner with their stockholders; far more reasonable would be a purchase of their patent portfolio as Ichan suggested.  ( With the understanding that all of the patents would be freely available to members of the open handset alliance. )

  • http://twitter.com/drdougdeep Dr Doug Deep

    Their IBM patent acquisition was a key move, and a great start. Motorola may be the next move.

  • http://twitter.com/drdougdeep Dr Doug Deep

    Their IBM patent acquisition was a key move, and a great start. Motorola may be the next move.

  • Dmritard96

    I apologize in advance for my potential stupidity but I am failing to see why this could potentially solve all of the patent issues that Google is having? Are you suggesting that by buying and threatening to enforce all of these Motorola patents that Google could ward off all of these (and future) lawsuits?  Furthermore, do you really think that this will repel these other companies?  I can kinda see your angle but it seems pretty risky and unrealistic.  What if they bought MMI or their patents – Apple shouldn’t be scared off by that – have you seen how much $$ they have.  It seems like absolute worst case for Google is that they have to own up to their legal stupidity and then correct their issues for the future.  If that means rewriting some code that they copied and/or settling some licensing fees, I think Google is probably well equipped for this.

    Also, are you somehow related to MMI or Motorola – ? “Synergy” seems to be the butt of all exPat Motorola employees in my office.

  • Dmritard96

    I apologize in advance for my potential stupidity but I am failing to see why this could potentially solve all of the patent issues that Google is having? Are you suggesting that by buying and threatening to enforce all of these Motorola patents that Google could ward off all of these (and future) lawsuits?  Furthermore, do you really think that this will repel these other companies?  I can kinda see your angle but it seems pretty risky and unrealistic.  What if they bought MMI or their patents – Apple shouldn’t be scared off by that – have you seen how much $$ they have.  It seems like absolute worst case for Google is that they have to own up to their legal stupidity and then correct their issues for the future.  If that means rewriting some code that they copied and/or settling some licensing fees, I think Google is probably well equipped for this.

    Also, are you somehow related to MMI or Motorola – ? “Synergy” seems to be the butt of all exPat Motorola employees in my office.

  • Chairsofter1138

    Well, Google buying Motorola is VERY un-Google and will never happen because of legal reasons. What they SHOULD do is get all of the other members of of the Open Handset Alliance to agree to countersue any company that sues an OHA member. That would be attractive to OHA members because they would receive a very beefy patent defense. The collective patent portfolios of all the OHA members would be enough to destroy the likes Oracle, Microsoft, and Apple if they should continue to wage a patent war. It’s an elegantly cheap and simple solution.

  • Chairsofter1138

    Well, Google buying Motorola is VERY un-Google and will never happen because of legal reasons. What they SHOULD do is get all of the other members of of the Open Handset Alliance to agree to countersue any company that sues an OHA member. That would be attractive to OHA members because they would receive a very beefy patent defense. The collective patent portfolios of all the OHA members would be enough to destroy the likes Oracle, Microsoft, and Apple if they should continue to wage a patent war. It’s an elegantly cheap and simple solution.

  • http://www.staska.net Staska

    Well, I agree that this will be the cheapest and most elegant solution. 

    Unfortunately, I don’t think it is likely. Especially in the light of the latest Motorola earnings CC, where they clearly signaled that they are ready to join Android IP racket themselves and may start suing other Android vendors like HTC and Samsung for patent infringement. http://www.unwiredview.com/2011/08/01/did-motorola-just-hint-they-are-ready-to-join-android-ip-racket-with-their-own-patent-fee-demands/

    And multi-OS vendors do not have any emotional attachment to the Android OS, to start fighting Google’s IP battles for it, and pool their resources with fierce competitors. They are happy and are making Android devices in droves, because they sell well, and they can make a profit. If Android becomes too expensive, and Windows Phone gets good enough as an alternative, they can switch to MSFT OS as fast as they ramped up Android production last year

  • http://www.staska.net Staska

    Owning Motorola’s patent portfolio will not help much against patent trolls like Intellectual Ventures and Lodsys. And it won’t help much with Oracle, I guess. 

    But it will be a big club to wave in response to any patent lawsuits from mobile industry competitors like Apple, MSFT, RIM, Nokia or HP. 

    Right now Apple can say to HTC – “screw you, either rework your stuff in non-infringing way, or stop selling it in U.S.” And some of the patents are pretty broad and hard to work around.   With Moto’s patents, on some of which Apple may infringe too – Google can say – Ok, then we are stopping iPhone imports too. It does not matter how much money Apple has. If they are found to infringe on a non standard essential patent – Google can just say No, without any obligation to license it. Apple may or may not have a way around such patents, but it’s a pretty big club to wave, to get Apple to negotiating table on much more favorable terms 

    And when the times comes to negotiate license fees with MSFT, Apple and others – Google can pull out the patents, essential to 3g/4G LTE technologies, for which no one can work around, because they are part of communication standards. And then compare to what competitors have and negotiate either cross-license or some serious license fee reductions.     

    And no, I’m not related in any way to MMI or Motorola

  • http://www.staska.net Staska

    Owning Motorola’s patent portfolio will not help much against patent trolls like Intellectual Ventures and Lodsys. And it won’t help much with Oracle, I guess. 

    But it will be a big club to wave in response to any patent lawsuits from mobile industry competitors like Apple, MSFT, RIM, Nokia or HP. 

    Right now Apple can say to HTC – “screw you, either rework your stuff in non-infringing way, or stop selling it in U.S.” And some of the patents are pretty broad and hard to work around.   With Moto’s patents, on some of which Apple may infringe too – Google can say – Ok, then we are stopping iPhone imports too. It does not matter how much money Apple has. If they are found to infringe on a non standard essential patent – Google can just say No, without any obligation to license it. Apple may or may not have a way around such patents, but it’s a pretty big club to wave, to get Apple to negotiating table on much more favorable terms 

    And when the times comes to negotiate license fees with MSFT, Apple and others – Google can pull out the patents, essential to 3g/4G LTE technologies, for which no one can work around, because they are part of communication standards. And then compare to what competitors have and negotiate either cross-license or some serious license fee reductions.     

    And no, I’m not related in any way to MMI or Motorola

  • Charles West

    This is an awesome piece. Bottom line, Google is running out of options and an aggressive move like this would be worth the time and money to make happen. If Google drags its feet like it did with acquiring Palm and the Nortel portfolio there may be no Android in the future. Litigation and licensing cost will only increase for OEM’s using Android. The message should already be clear by now, Google. MAKE – IT – HAPPEN

  • Anonymous

    I agree on the fears, but this is how Google sees it:

    Phone Mfgs are making money off android phones, they will heed the bill on the legal battles.

    This makes sense from strategic and operative point of view, not to mention legal.

    Samsung is big enough to fight off MS and Apple. So is LG. HTC might require a bit of hand-holding, but Google rather let HTC do the main battle.

    As for buying Motorola and letting it’s run it’s business in HW, no dice. THe ecosystem would start to crumple very fast, leaving Google alone to try with Motorola.

    Google cannot go to hw business (yet). Not untill Android market saturates and the infighting begins.

    IMHO, YMMV.

  • Anonymous

    I am guesting the consortium that bought the patents from Nortel will set up a separate entity to license the patents freely to the consortium partners. Why also either licensing the patents to Google and partners for a fee or use the courts to enforce those patents. I also suspect the consortium who bought the patents will come under attack by the competition watch dogs if they do not arrange a fair licensing deal with Google and it partners.

    I agree that there need to be a more comprehensive barriers put in place to stop the abuse of the patent system. Through how you do that without herting the little guy is a difficult question to answer. I personally think the best way is just to beef up the patent office, may be have some sort of fee system so a single guy in his garage does not have to pay anything but be corps like IBM and Google have to 100,000 thousand dollars for the Patent office to issue a Patent. The money use is then invest the money into developing better ways to evaluated a patents sent to the patent office.

    Also adding some sort of implementation requirement could be a possibility.

  • Anonymous

    I am guesting the consortium that bought the patents from Nortel will set up a separate entity to license the patents freely to the consortium partners. Why also either licensing the patents to Google and partners for a fee or use the courts to enforce those patents. I also suspect the consortium who bought the patents will come under attack by the competition watch dogs if they do not arrange a fair licensing deal with Google and it partners.

    I agree that there need to be a more comprehensive barriers put in place to stop the abuse of the patent system. Through how you do that without herting the little guy is a difficult question to answer. I personally think the best way is just to beef up the patent office, may be have some sort of fee system so a single guy in his garage does not have to pay anything but be corps like IBM and Google have to 100,000 thousand dollars for the Patent office to issue a Patent. The money use is then invest the money into developing better ways to evaluated a patents sent to the patent office.

    Also adding some sort of implementation requirement could be a possibility.

  • Gregory Miller

    How appropriate.  You signed it “Pathetic.”

  • Gregory Miller

    How appropriate.  You signed it “Pathetic.”

  • http://twitter.com/generosity9 Britain Demmick

    Good point, perhaps even HTC or Samsung

  • http://twitter.com/generosity9 Britain Demmick

    Good point, perhaps even HTC or Samsung

  • Gregory Miller

    OMG!  I know!  Hopefully when they come out with it, they’ll put it right next to the “grammar police filter” button.

  • Gregory Miller

    Great article!

  • Guest

    I’m not sure that Jha touting Motorola’s patent portfolio means that he is either asking for his company to be bought to gain that portfolio or a vieled threat at Google. I’m pretty sure he is just trying to score some extra cash for his company by following a business model that he is familiar with. Coming to Motorola from Qualcomm, I’m sure Jha is now realizing why Qualcomm’s business model relies heavily on patents and why they abandoned the mobile handheld market years ago.

  • Anonymous

    IDCC makes much more sense than motorola … 3G, 4G(LTE), M2M and Video Compression … 8,000 patents and 10,000 in the pipeline … jmho