Analyst: Apple may be planning big patent purchase to ‘strike back’ at Google, Motorola

Aug 18, 2011
Tech

Earlier this week, Google spent $12.5 billion to acquire Motorola Mobility, mostly to get its huge trove of patents and use them in an escalating war between itself, Microsoft, Apple and others. Google has been having a tough time in these patent wars, finding itself and its partners that use its Android mobile operating system […]

Earlier this week, Google spent $12.5 billion to acquire Motorola Mobility, mostly to get its huge trove of patents and use them in an escalating war between itself, Microsoft, Apple and others.

Google has been having a tough time in these patent wars, finding itself and its partners that use its Android mobile operating system on the losing end of court battles. In some cases, Android partners have been stuck paying licensing fees to patent holders in order to use technology covered by those patents. This drives up the cost of using Android, and ultimately, the cost of selling Android phones.

But the patent system in the U.S. is a bit of a mess. Software patents cover all kinds of things and there are literally thousands of patents just floating around that may or may not be in play for smartphones. By snagging up Motorola’s patents, Google gained several thousand patents that it can use against Apple, Microsoft, or whoever when they come calling with patents of their own. The mobile OS providers are arming themselves for deterrence, with the plan being mutually assured licensing fees.

Google’s acquisition of Motorola was in response to Apple and Microsoft teaming up to take down patents from Nortel, but one analyst thinks Apple will now be in the market for a new big patent acquisition in order to strike back at Google, according to a story from Apple Insider. Jeffries & Co. analyst Peter Misek predicted in a note to investors that he thinks Apple might try to strike up a patent deal with a competitor, perhaps Nokia, InterDigital or BlackBerry maker Research In Motion, in order to counteract Google’s patent buy.

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Misek has identified what he thinks are about 500 key patents, for both 3G and 4G, among Motorola’s portfolio, now in Google’s hands. That means Apple could need some (more) armor of its own, but it has the cash to pay for it: something like $76.2 billion in its coffers.

Here’s a quote from the Apple Insider story:

Apple may already be paying Nokia ‘significant royalties for cross-licensing,’ Misek said, adding that the Finnish handset maker owns ‘at least 50 essential 4G patents and likely over 100 essential 3G patents’ of interest.’ Another potential target, RIM, is said to have spent over $5 billion in developing its own patent portfolio with InterDigitial also on the analyst’s list as a potentially interesting purchase for Apple.

Of course, there’s no evidence Apple is pursuing purchasing anybody for their patents, much less Nokia or RIM. But then again, Google snagged up Motorola without much warning precisely for the reason of getting hold of its patents, and there will likely be added benefit to the company as it allows Motorola to operate as a separate business. If Apple chooses carefully, it too may be able to get some quality new patents along with a business it can use to bolster its mobile market share.

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Phil Hornshaw

Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his profile.

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