While there’s no question Google’s bid for Motorola was predicated on the company’s huge intellectual property war chest of 17,000 patents (7,500 pending), some say the phone maker sold its quality patents.
Others argue that it doesn’t matter. While it’s become something of a he-said, she-said, it highlights an interesting dichotomy in legal strategy.
Thanks to a broken software patent system, where companies are too easily tempted to sue others because they own overly broad patents, Google is shelling out $12.5 billion largely to provide IP nukes in this growing patent cold war.
The company more or less said as much in blog posts from Chief Legal Officer David Drummond and CEO Larry Page.
While Motorola’s patents won’t help Google with its current litigation over Android, or help OEMs with their litigation against Android, having a big stockpile of even lousy, latent patents could serve as deterrence versus patent trolls and other corporate, lawsuit-happy hoodlums. That’s the theory Google openly espouses.
But David Martin, founder and chairman of patent consulting firm M-Cam, told Bloomberg Google’s bid for Motorola, a whopping 63 percent premium over its stock market value last month, is an “immense mistake.”
Martin called Motorola’s current patent portfolio “crap” and asserted Motorola sold its quality MPEG patents to General Electric and other IP from its acquisition of semiconductor provider Freescale. Check out his interview:
That’s Martin’s take, which his firm deigned to support in a study that found 48 percent of Motorola’s patents are “potentially inadequate to protect Google and its corporate activities”, or “crap” in Martin’s parlance.
Another popular theory holds that even if 16,000 of the 17,000 current Motorola-owned patents are crap, Google would be loathe to use the quality patents in a legal dispute.
Why? Because the company wouldn’t want to risk losing a case, which would render the good patents invalid and Google susceptible to further attacks.
Just like in war. You wouldn’t necessarily send out your best troops–say Army commandos or Navy Seals and other top-notch soldiers–to protect your nation in a big blitz war.
Those soldiers are saved for more tactical attacks, such as hunting down and neutralizing a target. You want to preserve your good patents for important missions.
FOSS Patents blogger and IP expert Florian Mueller disagreed with this sentiment:
“Companies do fire their best bullets in critical patent litigation. I know this from both corporate decision makers and litigators. The idea of all patents being weak and quality not making a difference in a broken system is wrong in my view. You can’t win a case by arguing that you have thousands of patents. You must pick a few, maybe 10 or so per lawsuit, and then try to obtain decisions in your favor that really give you leverage. Weak patents work fine for trolls because they speculate someone will settle just for an amount below the cost of a proper defense–but when major strategic issues are at stake, patent quality does matter and companies won’t just settle if they’re confronted with weak patents.“
That’s certainly another war strategy, which could also apply to poker and other strategic games. It will be interesting to see what happens if Google does succeed in buying Motorola and has to put the patents to test in a court of law.