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Samsung verdict: Do Google's Motorola patents shield Android from Apple?

August 27, 2012|By Jessica Guynn
  • Will Google's Motorola patents help shield Android from Apple?
Will Google's Motorola patents help shield Android from Apple? (Ahn Young-joon / Associated…)

About $12.5 billion. That’s how much Google paid for Motorola Mobility.

The deal that handed the search giant patents to boost its intellectual property arsenal closed in May. But it’s become more important than ever following Apple’s resounding victory over Samsung on Friday as it wages a broader war against Android.

A jury, after three days of deliberations in a complex U.S. District Court trial in San Jose, awarded Apple more than $1 billion after finding that Samsung had infringed on six out of seven patents by copying the look and feel of Apple's mobile devices. Samsung is one of the biggest users of Android.

Google’s mobile software has become a key point of contention between the two tech giants, allies turned adversaries whose campuses are just 10 miles apart in Silicon Valley.

Google now must aggressively defend its Android software, which has surpassed Apple’s operating system, and it will turn to its Motorola patents to do it. But it’s unclear how effective those patents will be in insulating Android, said Macquarie Securities analyst Ben Schachter.

“The verdict does remind us that the value of Google’s Motorola Mobility remains very much an open question. Thus far, and it is clearly still early, we have yet to see any meaningful evidence that Google’s acquisition of Motorola’s [intellectual property] can protect various players in the Android ecosystem,” Schachter said in a research note. “Additionally, and again it is still clearly early, the combined companies have yet to release any meaningful products.”

The larger dispute is over a battle for share in the lucrative smartphone market. Apple is looking to protect any further erosion to its market share as Android rises in popularity.

Google’s Motorola, Apple and Microsoft are already brawling before the U.S. International Trade Commission and federal court in Delaware. In fact, some of the battles between Apple and Motorola Mobility go back as far as 2010.

“In theory, the Motorola patents do matter, because they give Google some leverage against Apple,” UCLAlaw professor Douglas Lichtman said. But, he said, this is still “not an even fight.”

“Motorola was not Apple's complete peer before its acquisition, and so owning Motorola does not make Google a complete peer today,” Lichtman said.

Recon Analytics analyst Roger Entner agreed. "The Motorola patents are valuable on the basic technology front, not the design front. Motorola was a notoriously weak software developer and a lot of the patents that Apple has cited are exactly in that weak spot," he said. "Samsung claimed Apple infringed on technological patents of Samsung and lost on those counts. I don't think the Motorola patents will help Google a lot."

J.P. Morgananalyst Doug Anmuth also said it wasn’t clear that the Motorola patents could “help protect the Android ecosystem going forward.”

But Rutgers Universitylaw professor Michael A. Carrier says the patents will be helpful "in the sense that Google now can claim that Apple has infringed its patents."

"In the patent war, the mere possession of patents even if they aren’t valid or the strongest around is crucial," he said.

And Schachter says the Samsung jury verdict’s bark is worse than its actual bite to Google’s business.

“In our view, the verdict will accelerate Google’s moves to find ‘workaround’ solutions but we don’t think that it will significantly delay products or significantly impact Android’s long-term consumer appeal,” he wrote in a research report. “Additionally, in terms of the financial impact, since the vast majority of Google’s mobile-related revenue still comes from advertising, we see virtually no impact on near-term financials. Over the mid/long term, we believe that Android’s success helps distribute Google’s advertising products and allows it to maintain some leverage in the Apple/Google relationship.”

But, Schachter added: “If Apple were to take share because of this verdict, it could negatively impact Google’s ability to get distribution of its advertising products and negatively impact its potential opportunities related to services and digital goods sold through its Android Market.”


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