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Acquiring Patents for the Sake of Innovation

Google’s acquisition of Motorola Mobility could spur the organic evolution of the Android ecosystem without fear of patent litigation.

When news trickled in that Google has completed its acquisition of Motorola Mobility for approximately  $12.5 billion, those familiar with contemporary software patent disputes were not surprised. The telecom industry and patent disputes are no strangers (this infographic illustrates the major cases as of October 2010) and corporations have realised the importance of a solid patent portfolio to continue development of products and services in a highly competitive market.

It becomes amply evident that Google’s acquisition has as much to do with creating an exhaustive patent portfolio as it does with the vertical integration of software (the Android operating system) and hardware (Motorola manufactures handsets on various platforms). Larry Page, the CEO of Google declared that the acquisition would help “better protect Android from anti-competitive threats from Microsoft, Apple and other companies”.

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At the most basic level, the difference between Google’s mobile operating system compared to Apple’s is that the latter controls both, the software and hardware elements in the iPhone. But a large corner of the smartphone market is controlled by Google, which allows its Android platform to be installed on handsets from various manufacturers including Samsung, HTC and LG. In such a market, the value in acquiring a handset manufacturer and all of its patents cannot be overstated. Interestingly, Motorola Mobility also controls the cable television and set-top box division, which would help Google in its IPTV and cable television offerings in the future. Google has announced that it will run Motorola separately and will treat the other Android licensees such as HTC and Samsung at par with Motorola. So the next flagship Google phone need not be one manufactured by Motorola.

There is enough evidence to suggest that patents were central to the Motorola acquisition, especially since approximately $6 billion went towards buying its patents alone. Over the years, Apple has aggressively attacked Samsung for violating its patents (for example the iPhone home button which resembles that on the Samsung Galaxy phones as well). As Larry Page observes, there is much to be gained by combining Google’s financial strength with Motorola’s patent portfolio, in order to defend the Android operating system from patent litigation.

For the average consumer, this acquisition could be a boon if it actually allows the Android ecosystem to develop organically without the fear of impending lawsuits. Hopefully with increased competition, these corporations will innovate and produce better products. That said, one wonders about the utility of the current patent system, with businesses engaging in tireless acquisitions in a new-age Cold War.

(Illustration by Ritwick Roy for myLaw.net)

This was originally published on myLaw.net

About Amlan Mohanty

Amlan is a lawyer based in India. He engages in research, writing, speaking and teaching at the intersection of technology, law and policy.