Google doesn’t have a lot of patents, relatively speaking, so it is vulnerable to patent suits from competitors–in particular, its Android smartphone is vulnerable to patent threats by competitors such as Apple (iPhone), Microsoft (Windows phone), and RIM (Blackberry).1 So Google understandably bid on the 6000 patents from bankrupt Nortel, going as high as $pi billion. The idea is: Microsoft (say) might be afraid to sue Google for infringing Microsoft’s patents, because it would realize Google could take a look in its own patent portfolio and find some patents that Microsoft is arguably violating and then countersue Microsoft for this. Thus, even companies that do not want to use patents offensively need to acquire them to keep other patent aggressors at bay.2
But a consortium including Apple, Microsoft, RIM, and others beat Google with a $4.5 billion bid.3 The obvious purpose was to leave Google relatively defenseless from patent suits, and to acquire even more weapons with which to attack Google. If you can’t beat a competitor with better products and technology and service and reputation, then sometimes it’s easier to use an anti-competitive government monopoly privilege to hammer them.
As Google’s bid to spend billions of dollars of its precious capital on defending itself from outrageous lawsuits failed, naturally it is looking to other means to defend itself, including beefing up its own patent department4 and looking to acquire other companies’ patents.5 There were reports Google may be seeking to buy patents from InterDigital,6 and now there are reports that Google has bought or licensed over 1000 patents from IBM. ((Google buys IBM patents to beef up portfolio.)) As BusinessInsider describes it: “What Google did was buy abstract legal rights as a form of racketeering protection.”7 No telling how much Google has had to pay for this “racketeering protection.” What a shame. What a waste.
- See Can patent licensing fees derail the Android express?; Patent Cross-Licensing Creates Barriers to Entry. [↩]
- See Patent Cross-Licensing Creates Barriers to Entry. [↩]
- See Nortel Patents Sold for $4.5 Billion to Consortium Which Includes Apple; Google General Counsel Says Patents Are ‘Gumming Up’ Smartphone Innovation; Bundle and Sell These Units of Extortion Protection; Intellectual Property Advocates Hate Competition; The Mainstream Patent Pendulum Swings Back. [↩]
- Google Staffing Up On Patent Lawyers And Experts. [↩]
- Google ready for war, plans to hire patent experts. [↩]
- Apple and Google may be in a bidding war over InterDigital patents. [↩]
- Google Buys More Ammunition In The Global Patent War. [↩]