In light of the ever increasing, expanding and confusing smartphone patent litigation and licensing landscape, we have put together a three part series to apprise you of the current developments. Hopefully part one begins to untangle the mess for you. If you missed Parts 1 and 2, please find links here: Part 1 and Part 2.
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In the last installment, we discussed the basics of patent pooling, a cooperative approach to patent licensing, as well as some of the reasons why such an approach was not able to develop here. What actually has developed is exactly the type of scenario that patent pools are often used to avoid. The smartphone industry is now locked in an uneasy détente, a patent Cold War that could conceivably go hot with massive, industry-crippling lawsuits at any instant. For a time, Google appeared to be falling behind in the arms race, as the apparent "patent gap" loomed between the Android operating system and its competitors at Microsoft, Apple, and Research in Motion. This worry came to a head after a recent auction for a suite of patents owned by now-defunct Nortel, when a consortium including these three companies appeared to have succeeded in blocking Google from what some considered its last real chance of catching up. In one fell swoop, Google's acquisition of Motorola Mobility and its portfolio of more than 17,000 issued patents has gone quite a long way toward closing the gap and bringing the industry to an equilibrium that is relatively stable, if somewhat tense. Essentially, Google has secured the intellectual property equivalent of Mutually Assured Destruction.
Just as in the real Cold War, it is likely that what we see on the surface represents only a fraction of the maneuvering that continues just outside the public eye. One interesting line of conjecture holds that the purchase of Motorola Mobility was Google's long-term objective all along. According to this line of reasoning, Google has been interested in buying Motorola Mobility ever since it was spun off from its parent corporation of Motorola in January of this year. The somewhat unusual collection of technologies comprising Motorola Mobility - including smartphones and internet television, two areas into which Google has recently expanded - lends credence to the idea that Motorola packaged the company intentionally and specifically to appeal to Google. According to this theory, Google shied away from the purchase after government regulators, including the Federal Trade Commission, began to make noise this summer about antitrust investigations into the software giant. Google then proceeded to pursue other portfolios, including the Nortel patent suite, in part to goad its competitors into taking action. When they banded together to defeat Google in that auction, Google took the opportunity to cry foul, and to spin its long-planned acquisition of Motorola Mobility as a purely defensive move designed to protect itself from what it called anticompetitive practices. Whether or not this version of events is accurate, it exemplifies the type of wheels-within-wheels strategic maneuvering that occurs under the type of patent détente in which these companies are engaged.
A number of lessons can be learned by companies who want to avoid Google's apparent missteps. First and foremost, the most obvious lesson is that you should join or start a patent pool or other cooperative arrangement if you can. If the situation permits, patent pools are really excellent tools for creating and increasing efficiency in a technological area. They allow potential competitors to collaborate, and therefore mitigate the waste of resources that is often the result when large technology companies engage in extensive patent litigation. In essence, patent pools allow companies to avoid the courtroom and focus their energy on simply doing business.
Second, if you decide to go it alone, understand the dangers you face. There are many reasons why cooperative strategies such as patent pools don't work out. If that happens, it is important to anticipate the type of standoff that will result if you are successful within a technological space. Google was almost left out in the cold. For a long time, their business strategy lacked an emphasis on intellectual property, and this very likely could have resulted in the death of the Android operating system. Although it appears that the Motorola Mobility purchase has salvaged the situation in relatively dramatic fashion, Google could have saved itself a major headache and a significant amount of money if it had incorporated a robust program of patent acquisition into its overall strategy from the outset.
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