August 16, 2011 in Business

Google to acquire Motorola

Internet giant’s purchase includes 17,000 patents
Michael Liedtke Associated Press
 

SAN FRANCISCO – It may be the boldest move yet by a company known for being audacious: Google is spending $12.5 billion to buy Motorola Mobility. But the big prize isn’t Motorola’s lineup of cellphones, computer tablets and cable set-top boxes.

It’s Motorola’s more than 17,000 patents – a crucial weapon in an intellectual arms race with Apple, Microsoft and Oracle to gain more control over the increasingly lucrative market for smartphones, tablets and other mobile devices.

If approved by federal regulators, the deal announced Monday could also trigger more multibillion-dollar buyouts. Nokia Corp., another cellphone manufacturer, and Research In Motion Ltd., which makes the BlackBerry, loom as prime targets.

The patents would help Google defend Android, its operating system for mobile devices, against a litany of lawsuits alleging that Google and its partners pilfered the innovations of other companies.

In addition to the existing trove of patents that attracted Google’s interest, Motorola, which introduced its first cellphone nearly 30 years ago, has 7,500 others awaiting approval.

Phone makers and software companies are engaged in all-out combat over patents for mobile devices. The tussle has been egged on by the U.S. patent system, which makes it possible to patent any number of phone features.

Patents can cover the smallest detail, such as the way icons are positioned on a smartphone’s screen. Companies can own intellectual-property rights to the finger swipes that allow you to switch between applications or scroll through displayed text.

Apple, for example, has patented the way an application expands to fill the screen when its icon is tapped. The maker of the iPhone sued Taiwan’s HTC Corp. because it makes Android phones that employ a similar visual gimmick.

The iPhone’s success triggered the patent showdown. Apple’s handset revolutionized the way people interact with phones and led to copycat attempts, most of which relied on the free Android software that Google introduced in 2008.

The deal is by far the largest Google has pursued in its 13-year history. Motorola Mobility’s price tag exceeds the combined $9.1 billion that the company has paid for 136 previous acquisitions since going public in 2004.

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