Google, according to a report out of Reuters, has agreed to settle all of its patent litigation with the Rockstar consortium, which consists of a variety of tech companies including Apple, Sony, BlackBerry and Microsoft. The Rockstar consortium paid $4.5 billion for Nortel Network Corporation’s huge patent portfolio in 2011, outbidding Google at the time. The Rockstar consortium originally sued Google and a handful of Android manufacturers in October of 2013, claiming that the companies infringed on seven Nortel patents.
Google is making moves this week to protect its Android partners as the Apple, Microsoft-backed “Rockstar” patent group seeks to sue numerous Android partners. Google has asked a San Jose court for a declaratory judgement to rule that Google and thereby the Android ecosystem does not violate seven of Rockstar’s patents.
Google, Samsung, and several other Android handset manufacturers are being sued by Rockstar, a consortium backed by Android competitors Microsoft and Apple, over alleged infringement of several search patents acquired by Rockstar from Nortel in 2011. Last year HTC reached a ten-year agreement with Apple as part of a patent infringement settlement. That deal would result in both companies licensing existing and future patents from one another, but it seems that agreement does not apply in this case.
According to an SEC filing made by Motorola today (seen after the break), Motorola was able to get $3 billion more out of Google before they were acquired for $12 billion — even without any other bidders present. But it isn’t that simple.
Today’s report contradicts August’s, saying Andy Rubin actually assisted in the acquisition when he reached out to Motorola first. It was previously stated that Rubin has no knowledge of the acquisition until the buyout was close to being announced. Rubin and company reached out to Motorola to buy patents, after losing the Nortel deal according to the filing.
The story continues as follows: Motorola’s Sanjay Jha told Google that Motorola wouldn’t only sell patents, rather the whole Motorola Mobility sector. Motorola than rejected two of Google’s offers which were $30 and $37 a share respectively, until both companies finally settled on a final price of $40 per share. Google, it appears, was in a hurry to get the deal done and bid pretty close to Motorola was after in order to avoid going to a long, drawn out auction process.
The smoke has cleared on Google’s $12.5B purchase of Chicago-based Motorola and now that almost everyone has had a chance to speak, I think we’re starting to understand what went down.
Google purchased Motorola (MMI) for $12.5B, a 63% premium over its weekend closing price. Motorola, however, has around $3B in cash and securities, which makes the real purchase a slightly more reasonable $9.5B for Google. For instance, if Google wanted to slice and dice Motorola, they’d take the cash and patents and sell off the cable box and device divisions for a couple billion dollars each and come away with about what they would have paid for Nortel – and get double to triple the patents. On sheer numbers of patents alone, it seems like a good buy. Obviously some patents are worth more than others.
If the deal doesn’t go through, Google owes Motorola $2.5B for the trouble, so Google is dead serious about this play.
But back to what Motorola does: They have IP, they make smartphones, they make tablets and they make cable top boxes. It seems like almost too good a setup for Andy Rubin’s Android to just want to sell off piecemeal.
But did Google want to pick up a hardware company? I reported earlier this year that the Android Hardware division that Andy Rubin had started up with former Danger Co-founders had intentions to build physical devices, not just Operating Systems.
That scale is what attracted and the former Danger founders to get the band back together, with their goal being to build the hardware and features they want to see show up in new Android devices. It’s not enough for Google to just provide Android software to carrier — now they hope to influence what handset makers build, too.
Newsweek Technology Editor Dan Lyons makes some great points this morning regarding Google acquiring Motorola Mobility for $12.5 billion. First he talks about TechCrunch MG Siegler’s remarks that Google made themselves “look like huge asses in retrospect”. Lyons pretty much says Siegler’s opinions were just foolish. Lyons also makes an interesting point that Google most likely didn’t actually want the Nortel patents, they were just driving up the price for Apple and Microsoft with their PI (3.14 billion) bid.
And today it all makes sense. Google just sandbagged its rivals. The whole thing was a rope-a-dope maneuver. Google never cared about the Nortel patents. It just wanted to drive up the price so that AppleSoft (those happy new bedmates) would overpay. Today, with the Motorola deal, Google picks up nearly three times as many patents as AppleSoft got from Novell and Nortel. More important, Google just raised the stakes in a huge way for anyone who wants to stay in the smartphone market.
In the end of things, Google is earning 3 times the patents than they would have in the Nortel deal, but for three times the price. One last word from Lyons:
In January of 2010, Kodak sued Apple and RIM for infringing on their patent to preview photographs. The lawsuit is still going on, but today Wall Street Journal is reporting that Kodak is currently looking to sell 10% of their patent portfolio, which includes the patent Apple and RIM are bring sued for.
The 1,100 patents include patents covering capturing, storing, organizing and sharing digital image. WSJ credits the sale to Kodak’s loss in profit over the last two quarters.
Chief Executive Antonio Perez has been using Kodak’s intellectual property as a means of funding the company’s long and expensive transformation. In 2008, Mr. Perez put forth a goal to generate between $250 million and $350 million a year from Kodak’s patent portfolio.
Google is fresh off acquiring 1,000 patents from IBM and is likely still in a buying mood as it battles everyone from Oracle to Microsoft to Apple-by-proxy in the courts. Apple, who outbid Google for the Nortel patent portfolio is obviously on the offensive.
Anticipating Android backers will face legal hurdles as Apple now has the upper hand in its case against HTC (here and here), Google has stepped up and bought more than a thousand IBM patents for an undisclosed sum. The news was first reported by the blog SEO by the Sea and picked up byThe Wall Street Journal. The search company might use IBM inventions as a leverage against pending lawsuits that indirectly involve its Android software.
Google failed to outbid the Apple-led consortium which paid $4.5 billion for Nortel’s treasure chest of more than 6,000 patents covering wireless technologies, among them crucial inventions related to fourth-generation cellular networks. The new patent deal is in line with Google’s focus on snapping up patent portfolios left and right in creating a “disincentive for others to sue Google”, as noted on their official blog back in April. The 1,030 granted patents Google bought from IBM cover varied technologies, including…
In order to acquire more patents, Wall Street Journal is reporting Google is in talks with InterDigital regarding an acquisition. In past weeks, Google lost the bidding war against Nortel, which would of landed the company numerous amounts of patents. Currently, Google has a small portfolio of patents which could lead to lawsuits over Android. For Google, the only logical thing is to acquire more. As CNetnotes:
“We continue to be optimistic about the prospects for the company under its current business plan,” Terry Clontz, InterDigital’s chairman, said in a statement. “That said, over the past year we have seen the value of intellectual property rise substantially as major players in the mobile industry increasingly understand the strategic and economic value of this type of asset.”
As of now these talks with InterDigital are preliminary and no price has been set. Apple is also rumored to be involved.
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