Monday morning, Google announced plans to acquire Motorola Mobility for around $12.5 billion, or $40 per share. Google cites Motorola’s commitment to Android and its success based on that commitment as a motivation behind the purchase, but the company mentions another reason fueling the acquisition: patent attacks being levied at Android. Make no mistake; that’s the real reason this deal went down.
Just last week, it looked like Motorola was considering seeking royalties related to patents it holds that Android might violate, in an effort to strengthen its position relative to more successful Android hardware partners like Samsung and HTC. It seems likely that talks were underway at that point, so perhaps CEO Sanjay Jha was hinting at this development when he said that investors could soon expect to “see a meaningful difference in positions of many Android players. Both, in terms of avoidance of royalties, as well as potentially being able to collect royalties.”
Motorola Mobility has a very strong patent portfolio thanks to its role as one of the companies behind the original invention of the mobile phone. It definitely exceeds either Samsung or HTC in this regard. Its portfolio is strong enough that it has pursued Apple and Microsoft in patent suits.
Google has recently been very vocal about the state of patent law and its effect on the Android ecosystem. A blog post last week by Google SVP and Chief Legal Officer David Drummond argued that Android is being unfairly targeted by competitors like Microsoft and Apple, sparking a back-and-forth that brought out some ugly truths about past high-profile patent-related deals, like the Novell and Nortel deals.
However, purchasing Motorola Mobility isn’t a magic bullet solution to Android’s ongoing patent woes. Apple and Microsoft decided to pursue legal action against Motorola despite its patent portfolio, so it obviously isn’t watertight. But whereas previously Google seemed to have little recourse beyond complaining publicly about the unfairness of the system, now it has some actual weight to throw around in court. Also, if Google is serious about ensuring that this deal doesn’t negatively affect its relationships with other hardware partners, it can use the purchase to at least try to ease some of the patent pressures being applied to Samsung and others.
As far as “if you can’t beat ’em, join ’em” moves goes, this one by Google is a pretty bold one. It was beginning to look like Android was facing a long, slow death at the hands of licensing fees and patent litigation. Motorola, at the very least, ensures that Android can do more than just write blog posts to prevent that from happening.