Late January 29, in Lenovo to acquire Motorola Mobility, CEO Larry Page announced that Google had just signed an agreement to sell Motorola Mobility to Lenovo for $2.91 billion.
Mr. Page explains "we acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users." He claims "both the Moto G and the Moto X are doing really well, and I’m very excited about the smartphone lineup for 2014. And on the intellectual property side, Motorola’s patents have helped create a level playing field, which is good news for all Android’s users and partners." Mr. Page concludes "Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem."
Google is smart to sell Motorola to Lenovo and keep the patents, because it may generate another strong Android handset maker, it will allow Google to focus solely on improving Android software, and it will strengthen its own patent portfolio. The Motorola patents may prove useful in the future, but Motorola Mobility has not been winning many of its patent infringement actions in recent years. Motorola's patents have not so far created a level playing field. Beside the standard problem of getting through a court with finding of patent infringement, some of the widely used Motorola patents are standard essential patents (SEPs) subject to fair reasonable and non-discriminatory terms (FRAND). Thus, winning only results in relatively modest damages.
In selling the operating business and keeping the patents, Google has become a non-practicing entity (NPE) on a huge scale. Congress has let the patent litigation abuse concerns fuel bills that may adversely impact all NPEs. For example, see the bills including fee shifting if a patent owner loses. Hopefully, Google will help Congress to recognize this NPE distinction is not based on the law, nor actually anything and its lobbyists will focus patent reform efforts to more precisely target bad actors rather than all NPEs engaging in patent licensing and enforcement.
Copyright © 2014 Robert Moll. All rights reserved.