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Microsoft Android Businesses Google Patents The Almighty Buck The Courts

Was Google's Motorola Mobility Acquisition a Mistake? 189

Posted by timothy
from the press-one-to-find-out dept.
Nerval's Lobster writes "Even before the Google acquisition, Motorola Mobility was engaged in a major legal battle with Microsoft, insisting that the latter needed to pay around $4 billion per year if it wanted to keep using Motorola's patents related to the H.264 video and 802.11 WiFi standards. (The patents in question affected the Xbox and other major Microsoft products.) Had that lawsuit succeeded as Motorola Mobility originally intended, it would have made Google a boatload of cash—but on April 25, a federal judge in Seattle ruled that Microsoft's royalty payments should total around $1.8 million per year. 'Based on Motorola's original demand of more than $4 billion per year from Microsoft,' patent expert Florian Mueller wrote in an April 26 posting on his FOSS Patents blog, 'it would have taken only about three years' worth of royalties for Microsoft to pay the $12.5 billion purchase price Google paid (in fact, way overpaid) for Motorola Mobility.' This latest courtroom defeat also throws into question the true worth of Motorola Mobility's patents. After all, if the best Google can earn from those patents is a few pennies-per-unit from its rivals' products, that may undermine the whole idea of paying $12.5 billion primarily for Motorola Mobility's intellectual-property portfolio.
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Was Google's Motorola Mobility Acquisition a Mistake?

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  • by perrin (891) on Friday April 26, 2013 @01:26PM (#43558747)

    I've been following this site since before it had user accounts. It has really been a downhill ride in recent years. It is more and more just about click-whoring.

    This article is a case in point. Slashdot editors must know by now that Florian Mueller is a professional troll who is paid to spew FUD about his clients' enemies in the media. That the editors do not care, since FUD articles apparently are click magnets, just makes me feel nauseous about coming back here.

    There are so many more intelligent commentaries about this ruling that could have been posted instead.

  • by Anonymous Coward on Friday April 26, 2013 @01:32PM (#43558853)

    Mainly because he is paid by Oracle and Maybe even Miscrosoft and is often biased in favour of his paying masters.

  • by DickBreath (207180) on Friday April 26, 2013 @02:10PM (#43559407) Homepage
    Do you have any evidence of that? That false accusation has been spouted for years by SCO shills.

    Groklaw is archived by the Library of Congress. That's quite a privilege and compliment. Groklaw has won numerous industry awards.

    Years ago, in court filings, IBM expressly disclaimed any connection with Groklaw. If SCO, or anyone for that matter, had any evidence of this, it would definitely have been pointed out to the court that IBM was making false statements.
  • Re:No. (Score:5, Informative)

    by Solandri (704621) on Friday April 26, 2013 @02:20PM (#43559533)
    I would actually chalk this up as a Google win (while simultaneously being a Motorola loss). The reason Motorola was seeking $4 billion was because they were asking a flat 2.25% of the [i]device price[/i]. Products like the Xbox use H.264 as a small subset of their total features, but the norm in the industry seems to be that patent royalties are based on the total device price. This paper [investorvillage.com] on patent royalty rates in the cellular industry puts the total royalty burden of a GSM handset at 10%-40% of the device price.

    The judge here decided that, for FRAND patents at least, basing the percentage off the device price was silly, and reduced it accordingly. Arguably that's a much more sane way to do it, considering that devices are becoming more and more multifunctional. Motorola still gets 2.25%, just of the part of the Xbox which uses H.264 instead of the entire Xbox price. If that becomes the norm in the industry, that would be much better for Google and anyone actually making stuff. The losers would be patent trolls and companies which make most of their money licensing their patents instead of building products which use them.

    The only issue that remains is the discrepancy between FRAND and regular patents. This decision only covered FRAND patents. If FRAND patent royalties get reduced to a percentage of specific features, while regular patent royalties remain a percentage of the device price, then we will have the backwards situation where a patent on bouncy scrolling and rounded rectangles is worth more than a technical H.264 patent. But that should sort itself out in a few years. If regular patents become worth more than FRAND patents, nobody in their right mind will submit their patent for FRAND anymore and there will be compatibility chaos in all industries. Either regular patents will be reduced to a percentage of specific features as well, or this judge's decision will be overturned and FRAND royalties will return to a percentage of the device price.
  • by ebno-10db (1459097) on Friday April 26, 2013 @03:33PM (#43560449)
    It gets worse, the submitter is "Nerval's Lobster", and as a reader wrote the other day:

    [Nerval's Lobster] is a "Senior Editor at Slashdot," Nick Kolakowski [slashdot.org] (Twitter [twitter.com], Literary Gun For Hire [nickkolakowski.com]), who writes articles for Slashdot (and other places [huffingtonpost.com]) and apparently submits them under the guise of a "user" named Nerval's Lobster. Nerval's Lobster's submissions are "accepted" by the editors nearly every day, and always link to Slashdot's "Business Intelligence" or "Cloud" content... effectively passing off paid content as normal, user-submitted content.

    The full post (very interesting) is here [slashdot.org].

  • by squiggleslash (241428) on Friday April 26, 2013 @04:47PM (#43561467) Homepage Journal

    You're right, and yes, he's a shill.

    What makes this article particularly unpleasant is the deliberate misrepresentation of Google's reasons for buying Motorola. Google didn't buy Motorola to ensure it made a profit from patent royalties. It bought Motorola so it has a warchest of patents it can use if Android is attacked by a company like Nokia or Apple.

    Microsoft hasn't attacked Android - it's gone to Android phone manufacturers and negotiated patent royalties, yes, but those royalties haven't been excessive and have been comparable to the royalties paid normally by mobile phone makers for key technologies. It hasn't tried to prevent Android phones from being made, nor tried to gouge Android phone makers. So Microsoft's settlement with Motorola was never going to be particularly excessive.

  • by number11 (129686) on Friday April 26, 2013 @05:06PM (#43561701)

    This is a Florian Mueller article. It has no merit, no validity, and should be taken with the same grain of salt you'd take one of those folks who said the world would end in 12-12-2012.

    Yeah, that was my initial response, "isn't "patent expert Florian Mueller" an oxymoron? IIRC that's the guy who claimed the GPL was a "source of infection", and Oracle was going to clean Google's clock. Over at groklaw [groklaw.net] that name tends to be associated with phrases such as "self-described patent expert" and "on Microsoft's payroll". He was also on Oracle's payroll.

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