...from: http://techcrunch.com/2011/08/04/googles-patent-problem/
Why Did Google Blog About Patents Today?
Because The Nortel Loss Was Just The Beginning.
MG SIEGLER posted 11 hours ago40 Comments
As you’ve undoubtedly seen by now, Google decided to go on the offensive today with regard to patents. No, they didn’t go after any company for violating their patents. Nor did they spend billions acquiring new ones. Instead, David Drummond, Google’s SVP and Chief Legal Officer, took to the Google Blog to lash out at Microsoft, Apple, Oracle, and others for using “bogus patents” to attack their Android mobile platform.
But why now? In the past, Google has remained fairly mum on the topic. And they certainly weren’t calling out rivals by name. They’ve talked generally about the broken patent system, and even did a post explaining why they were willing to spend big money on the Nortel patents — for defensive purposes. But those approaches haven’t worked. Google is now arguably more vulnerable than they’ve ever been. And the stakes are about to go even higher.
When Google lost the Nortel bidding, they’re believed to have bid north of $4 billion before dropping out. Apple, backing Rockstar Bidco, eventually won with a bid of $4.5 billion. Now a battle for an even bigger treasure of patents looms.
Both Apple and Google have been looking into making bids to acquire InterDigital, according to multiple reports. Samsung is also now looking to get into the action as well, Bloomberg reports today. You can bet Microsoft is sniffing around as well. Whereas the Nortel win granted Apple, Micrsoft, RIM, and the other consortium partners access to over 6,000 mobile patents, InterDigital holds around 8,800 patents in the same space.
In other words, this latest battle is going to be insane. We’re looking at $5 billion easy, and likely even higher, based on the Nortel deal.
Google is clearly willing to pay to acquire patents, but they’ve reiterated time and time again that they won’t overpay for them. “This anti-competitive strategy is also escalating the cost of patents way beyond what they’re really worth. Microsoft and Apple’s winning $4.5 billion for Nortel’s patent portfolio was nearly five times larger than the pre-auction estimate of $1 billion,” Dummond wrote today.
Of course, Drummond failed to mention Google’s own $4 billion+ bid on those same patents. It just happened to be a losing one. (He failed to mention something else too.)
The $4 billion+ bid was likely well out of Google’s comfort zone, but they knew they had to win. Well, at least until they realized they likely couldn’t win against Apple, Microsoft, etc.
The same is likely to be true here. And Google knows it. They have nearly $40 billion in cash and cash equivalents to spend. 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.
Google’s official line is that there are plenty of patent opportunities out there. And the truth is that there are a lot — look at the deal they reportedly just did with IBM, for example. But that deal was for only 1,000 or so patents. This effectively doubled Google’s arsenal. But they’re still nowhere near Apple’s 10,000+ patents after the Nortel deal. And Microsoft should be well over 20,000 now. If Apple or Microsoft get another 8,800+ from InterDigital…
It’s massive deals like these that Google needs to be going after. And there aren’t too many of them.
Google’s only play is try to acquire enough patents to work towards a mutual assured destruction agreement with their rivals. But again, that’s going to be hard given who they’re going up against. This leaves three options: 1) appeal to the courts. 2) appeal to the public for support. 3) pray.
Today’s blog post was Google moving on to option 2. Option 3 may be just around the corner…
= - = - = - = - = ...and the other thing not mentioned...
...from: http://techcrunch.com/2011/08/03/microsoft-just-kicked-google-in-the-nuts/
Google Threw A Punch, Microsoft Fires Back With A Missile
MG SIEGLER posted 14 hours ago107 Comments
Earlier today, Google came out swinging. Seemingly sick of being continuously slapped in the face by the patent issue, Google’s SVP and Chief Legal Officer, David Drummond, wrote a blog post calling out several of Google’s rivals for attempting to use “bogus patents” to destroy Android. Chief among the rivals called out was Microsoft. Drummond noted that the software giant had been getting in bed with other rivals to hurt Google.
Among the accusations was that Microsoft teamed up with Apple to buy Novell’s old patents, implying that they did so in order to keep them away from Google.
Microsoft didn’t take too kindly to that remark.
“Google says we bought Novell patents to keep them from Google. Really? We asked them to bid jointly with us. They said no,” Brad Smith, Microsoft General Counsel tweeted out in response.
Damn. Shit just got real.
Just in case that wasn’t enough, Frank Shaw, Microsoft Head of Communications, followed up with the real heat-seeker. “Free advice for David Drummond – next time check with Kent Walker before you blog. ,” Shaw tweeted, referring to another Google SVP and General Counsel. Attached to that tweet was the picture of an email Walker apparently sent to Smith on October 28, 2010. It reads as follows:
Brad –
Sorry for the delay in getting back to you — I came down with a 24-hour bug on the way back from San Antonio. After talking with people here, it sounds as though for various reasons a joint bid wouldn’t be advisable for us on this one. But I appreciate your flagging it, and we’re open to discussing other similar opportunities in the future.
I hope the rest of your travels go well, and I look forward to seeing you again soon.
– Kent
While it’s only one instance, this really does undercut Google’s entire argument. Google was attempting to set up a pattern of Microsoft teaming up with other Google rivals to damage them. But the first instance listed was actually the result of Google turning Microsoft down, as the email shows. That does not look good for Google.
Does that mean Google’s totally wrong and Microsoft is totally right? Of course not. But it sure makes Google look pretty stupid. And it reinforces something that many observers think about Google’s position here: that they simply weren’t taking the patent situation too seriously until recently, and now they’re all up in arms about it.
God I love it when Google and Microsoft take these fights to the streets.
@BradSmi Brad Smith Google says we bought Novell patents to keep them from Google. Really? We asked them to bid jointly with us. They said no. about 19 hours ago via webReplyRetweetFavorite @fxshaw Frank X. Shaw Free advice for David Drummond – next time check with Kent Walker before you blog. http://t.co/PfKle9H
