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Eric Schmidt, Googles Executive Chairman and former CEO, has reiterated that the companys proposed $12.5 billion acquisition of Motorola Mobility is about more than just patents. At the Salesforce.com Dreamforce conference, Schmidt said, We did it for more than just patents. We actually believe that the Motorola team has some amazing products coming. He continued, Were excited to have the product line, to use the Motorola brand, the product architecture, the engineers. These guys invested the RAZR. We know them well because theyre Google Apps users. He also said, [We enjoy] having at least one area where we can do integrated hardware and software.
Schmidts views are in line with the statement made by CEO Larry Page at the time when the deal had been announced. Larry had said, Motorola Mobilitys total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers. However, Larry Page had also opined that Motorolas extensive patent portfolio would greatly assist Google and its Android partners in defending Android against patent complaints from the likes of Apple and Microsoft. Motorola has an extensive portfolio of more than 25,000 issued and pending patents.
Most smartphone vendors using the Android platform have come out in support of Googles $12.5 billion deal, which they see as a protection from legal attacks. However, recently Nokias chief of patent licensing, Paul Melin, said in an interview, There are tens of patent lawsuits ongoing against Android. As we have understood, (Google) acquiring Motorola won't solve one of them. Many other analysts have also expressed similar views. At the Dreamforce conference Schmidt has expressed the view that the current patent regime in the world is plagued with longstanding issues, which are the result of the fact that during the early 1990s and 2000s, lot of patents that were very broad had been issued.
He also said that the best way to curb these legal wars over patents would be to publicly publish the patents, so that everyone can comment on them. However, under the current laws in USA, this kind of disclosure would be considered illegal. Schmidt accepted this fact in his speech. He also pointed out that currently there was the legislation in the Senate that would hopefully fund the patent office more and give them the rights to kick out a lot of the bogus patents, which had been issued earlier. The software industry, he said, was able to avoid an impasse over patents, because it was an industry defined by creativity rather than by its patents.
If we go by sheer numbers, Google seems to have got a much better deal as compared to the consortium comprising of Apple, RIM and Microsoft that purchased Nortels and Novells patents. The consortium paid $4.5 billion for about 6,000 patents, whereas Google picked up four times the patents (24,000) for the less than three times the price. Google has also done a really good job of showcasing itself as the victims of shady patent practices in the tech industry. The company is a late entrant in the Silicon Valley scene; hence it didn't have the time to acquire the kinds of software patents that other companies used both as ammunition to beat back competition and as a shield when sued for infringement.
Googles Motorola Mobility deal is yet to be concluded. If the deal fails to pass the regulators scrutiny or gets dropped due to any other reason, Google will have to fork out a substantial sum of money. Perhaps Schmidt has been understating the patent related problems that the company is facing. The road ahead for Android OS continues to be murky, but this murkiness could also turn out to be advantageous to Google. It is only a question of playing the right cards at the right time. In the war of patents Google has to keep fighting like a tactful warrior, because in its rapid rise to the top, it has spawned lot of determined rivals. As Sun Tzu has written in the Art of War, To know your Enemy, you must become your Enemy.
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