Storm clouds over Google HQ. Photo credit: Stuck in Customs
“hostile, organized campaign against Android”
A consortium of Google’s competitors recently defeated the search giant in an auction for 6,000 patents belonging to the bankrupt Canadian telecoms company Nortel, and Google is really not happy about losing out. In an unusually belligerent blog post Google’s SVP and Chief Legal Officer, David Drummond, accused Google’s competitors of using the “bogus patents” as a weapon against Android, driving up the cost of the patents beyond their worth and effectively imposing a “tax” on smartphone manufacturers who may want to build Android devices and making the phones more expensive for consumers. According to Drummond, such shenanigans are “anti-competitive.”
- Why is Google so upset? Patents are big business when it comes to smartphones. The more patents you own, the more influence you can exert over the rest of the industry. As Robert Cyran explained in The New York Times, every player in the mobile market “needs or desires more patents for supremacy. Without them, their devices are vulnerable to shakedowns for royalties or, worse, demands to stop using the innovations.” Google has a history of complaining that the US patent system is broken, and that companies shouldn’t be allowed to use patents to squeeze each other out of the market. And they may have a point. As Dan Frommer argued at Business Insider, “It is lame that everyone in the smartphone industry is suing each other using old, silly patents that have little or nothing to do with recent innnovation.”
- Google’s sour grapes. But whether or not Google’s gripes are justified, it’s clear that the company is falling behind in the race for mobile patents. TechCrunch’s MG Siegler believes that Drummond’s outburst is an admission of the fact that Google just can’t afford to compete with the unholy alliance of Apple, Microsoft, Oracle et al. In an unsparing analysis, he explained that Google “have nearly $40 billion in cash and cash equivalents to spend [on patents]. But Apple has almost double that. And if Apple teams up with Microsoft again, they’ll have over $100 billion in buying power. At the end of the day, Google will not be able to out-bid Apple, and they’re running out of options.”
- Microsoft hits back. What makes Google’s high-minded stance seem even more shaky here, is that the company also made an enormous bid for the Nortel patents. And it gets better. In a delicious twist, Microsoft’s General Counsel Brad Smith tweeted in response to Drummond’s blog: “Google says we bought Novell patents to keep them from Google. Really? We asked them to bid jointly with us. They said no.” The plot thickens! No response from Google on that one yet.
- Ding ding, next round. Before anyone can catch their breath, the next patent feeding frenzy is already coming into view. Telecoms company InterDigital is preparing to auction off 8,000 mobile patents and Google, Apple, Samsung and others are lining up to have a shot. Let battle commence!
