Google confirmed that it bought over a thousand patents from IBM but details were not revealed. Some sources report that the patents bought are 1,029, according to other sources they’re 1,030, either way the amount paid by Google wasn’t disclosed.
The important fact is that the acquired patents cover technologies related to hardware and in particular the production of microprocessors and memories but also Internet-related technologies.
Ever since Google entered the field of mobile devices and cell phones with the creation of Android the company has been directly or indirectly involved in various lawsuits. In particular Apple got into litigations with various mobile phone makers, Microsoft is trying to get paid by the producers of Android smartphones threatening lawsuits for alleged patent infringement and Oracle is demanding billions of dollars from Google for the use of Java technology in Android.
There’s an arms race by large companies operating in the telecommunications field and today the weapons are patents. Any company can use its patents to try to get money from other companies or simply to block the actions of a competitor. Lately there has been an escalation in the use of patents in the telecommunications field, so their value has increased and the impression is that an economic bubble around them has been created.
A few weeks ago six thousands of Nortel patents related to technologies in the telecommunications sector have been sold for about $4.5 billion to a consortium which includes Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony, in essence Google’s competitors. Definitely a big deal for Nortel, which was in very poor economic conditions.
This acquisition was so important that the U.S. Department of Justice decided to open an investigation to assess if it was done in order to initiate lawsuits against Google or some Android smartphone manufacturers.
It’s therefore possible that restrictive conditions are decided on the use of Nortel’s patents, which means that the U.S. Department of Justice recognizes the danger that they’re used in a manner harmful to the market and consumers. In April a decision went in that direction concerning the acquisition of Novell’s patents by a consortium led by Microsoft: the Department of Justice, together with the German antitrust authority, had amended the deal so as to eliminate a danger to competition.
During July there was also the acquisition of S3 Graphics by mobile phone manufacturer HTC, which essentially paid $300 million for 235 patents. Thus HTC strengthened its position to better address the crossed lawsuits that see the company in litigation with Apple.
Recently Google expressed criticism about the use of patents as weapons against competitors but obviously the company can’t remain defenseless. Google hasn’t many patents so until the situation doesn’t change, perhaps as a result of political decisions, it’s clear that it must buy them from someone else.
IBM is an ideal partner for Google. Both companies have invested heavily in Linux, though in very different ways as IBM installs it on its high-end systems while Google has made it the basis for Android and Chrome OS. Thus they are two companies that have interests close enough to lead to a deal like this but far enough for them not to step on each other’s toes. The philosophy that the enemy of my enemy is my friend can be important and the two companies have some common enemies.
IBM has gazillions of patents of all types, it will be interesting to see what Google actually bought and how the company will use those patents. It would also be interesting to know how much they were paid. Presumably we’ll soon know the new moves by Google, waiting for the next battle in this patents war.