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Will Microsoft Snatch Motorola's Patents from Google?

Something just doesn't seem right here. We've long defended the importance of intellectual property and patents in this space, noting that IP is the lifeblood of capitalism. And we still believe that it is. But this is just weird.

Most of you know by now that Google's announced intention to buy Motorola for $12.5 billion isn't really about Motorola's hardware, manufacturing facilities or expertise in making smartphones. It's about patents -- pretty much entirely about patents. In fact, with Apple and Microsoft teaming up to try to whack Google with the patent stick and destroy Android, the whole smartphone business is now, apparently, about patents.

The idea is that if you're a smartphone maker and you're worried that you've violated a patent -- or if you're pretty sure that you have -- you can just buy a company that has a similar patent to the one you might have violated and then say, "See? We didn't do anything wrong. We own this patent. It's close enough." Or something along those lines.

It's that kind of patent-collecting frenzy that has one analyst -- who says he saw Googarola coming when nobody else did -- suggesting that Microsoft could actually swoop in and steal Motorola away from Google before the deal closes. OK, yeah, so it's just one guy giving his opinion. But apparently he's a dude who holds some sway because his story is growing legs.

At the same time, despite a fall from grace nearly worthy of Nevin Shapiro (seriously, check this guy out), Research In Motion doesn't have investors worried. Not really, anyway, because they figure that it's entirely possible that some other smartphone company will buy RIM...for the patents. So much for the supposed addictiveness of what was once called the CrackBerry.

Now, your editor is obviously not a patent lawyer (or a lawyer of any kind, for that matter), but something does seem amiss with this scenario. The reason we've always found patents important is because -- in the spirit of the law, we believe -- they encourage innovation and let companies protect hard-earned competitive advantages. In that sense, being able to buy up companies just for their patents, something we realize is hardly new, just seems to run counter to the purpose patents are supposed to serve.

OK, maybe Motorola isn't too upset about getting scooped up for a $12.5 billion price tag, and maybe its patents did serve the company well in the long run. But if Google really did violate Microsoft (and Apple, and Oracle) patents, it seems somehow unfair -- somehow counter to the idea of a patent, which we thought was supposed to be unique -- for Google to be able to cover itself by purchasing somebody else's inventions and then saying that the company is shielded from any sort of patent lawsuit with a sort of get-out-of-jail-free (or, in this case, for $12.5 billion) card. Rip off somebody else's stuff? No big deal. Just go buy some other company's IP and cover your Android. Suddenly, it was all your idea to begin with! (To be fair, we're not saying that Google did that. In fact, as a happy Android user, your editor really hopes that the company didn't. But the phrase "cover your Android" was just irresistible.)

The much bigger problem with patents, though, seems to be that companies can now patent just about any process, including tiny and mundane things that competitors almost wouldn't be able to help from "inventing" themselves at some point. ("Hey, what if we patented the process of dialing a phone number by pushing buttons!" OK, so that's not a real example, but evidently it's not too far off of how the patent process works.)

And here's where we're thinking that maybe Google might be mostly innocent, and that maybe the search giant's (or eventually Microsoft's) buyout of Motorola is kind of a necessary waste (to coin a phrase). If most of these patent-related legal actions amount in all practicality to annoyingly effective nuisance lawsuits, it seems unfortunate for the industry and maybe for the economy in general that any company would be compelled to spend double-digit billions of dollars just to fend them off.

We're guessing that patent lawsuits, if they really are just a hassle more than anything else, retard innovation rather than promote it, and we also suspect that they probably destroy more jobs than they create. Is that the purpose the lifeblood of capitalism is supposed to serve? It sure doesn't seem as though it should be.

What's your take on the patent wars in the smartphone industry? Leave a comment below or send your thoughts to [email protected].


Posted by Lee Pender on August 17, 2011