Google Acquires 1,023 IBM Patents to Shore Up Android Defense
Google (NAS: GOOG) has acquired 1,023 patents from IBM as it continues its battle to defend its Android mobile operating system from legal threats mounted by the likes of Apple (NAS: AAPL) , Microsoft (NAS: MSFT) and Oracle (NAS: ORCL) .
Patent assignments recorded earlier this week on the U.S. Patent and Trademark Office website indicate that Google acquired the IBM patents on Aug. 17. Bloomberg reports that Google had already purchased 1,030 IBM patents in a separate agreement finalized in July. Google confirmed the latest transaction without divulging details or additional terms. IBM declined to comment.
Google finalized the second IBM patents deal just days after revealing an agreement to acquire Motorola Mobility (NYS: MMI) for roughly $12.5 billion. In a blog entry announcing the Motorola purchase, Google CEO Larry Page stated the company made the deal in large part to enhance its product portfolio in an effort to "protect Android from anti-competitive threats."
An Oracle suit filed last year seeks billions in damages against Google, alleging "approximately one-third of Android's Application Programmer Interface (API) packages" are "derivative of Oracle's copyrighted Java API packages" and related documents. (Oracle acquired Sun Microsystems and its Java programming language in April 2009.) According to court filings submitted in late June, Oracle wants Google to pay $0.9 billion to $1.4 billion upfront for infringing on its patents. Oracle also wants 15 percent of mobile advertising revenues generated across the Android platform. Late last year, Google said its mobile ad business operates at a run rate of $1 billion annually.
Earlier this year, Google also lost out in a patent auction to a coalition of six companies including Apple, EMC, Ericsson (NAS: ERIC) , Microsoft, Research In Motion (NAS: RIMM) and Sony for Nortel's patent portfolio. The consortium paid $4.5 billion, and Apple contributed $2.6 billion, though antitrust officials at the Justice Department are reportedly investigating the sale. Google has subsequently been rumored to be interested in purchasing InterDigital for that company's patent position.
A scathing blog post published last month by Google senior vice president and chief legal officer David Drummond alleges Apple, Microsoft and Oracle are attempting to "strangle" Android by leveraging "bogus patents" that could drive up costs for devices running the mobile operating system. Drummond contends that Google's opponents have banded together to acquire patents held by firms like Nortel and Novell "to make sure Google didn't get them ... Our competitors want to impose a 'tax' for these dubious patents that makes Android devices more expensive for consumers. They want to make it harder for manufacturers to sell Android devices. Instead of competing by building new features or devices, they are fighting through litigation."
Last week, Apple upped the stakes again, alleging Android began taking shape almost two decades ago while Google senior vice president and Android chief Andy Rubin was employed within the Apple ranks. In a reply to the International Trade Commission's ongoing investigation into Apple's complaint against Android device manufacturer HTC, Apple states "Mr. Rubin began his career at Apple in the early 1990s and worked as a low-level engineer specifically reporting to the inventors of the '263 [realtime API] patent at the exact time their invention was being conceived and developed ... It is thus no wonder that the infringing Android platform used the claimed subsystem approach of the '263 patent that allows for flexibility of design and enables the platform to be 'highly customizable and expandable' as HTC touts."
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