Peace in Our Time? Apple and Google Are Thinking About It

You know how Apple (Nasdaq: AAPL  ) leader Steve Jobs declared "thermonuclear war" on rival smartphone platform Android? Those fighting words were followed up with a generous helping of lawsuits around the globe, hounding Android builders Samsung, HTC, and Motorola Mobility with patent infringement claims and import stoppages.

Apple buried the hatchet with HTC this week, but the overall lawsuit campaign continued unabated. Samsung, for one, vowed to keep fighting rather than negotiating a cease-fire.

But we might see an end to the smartphone wars very soon. The nexus of the peace treaty is in Wisconsin, of all places.

That's where Apple wanted the district court judges to set royalty rates for Apple's and Motorola's standards-essential patents. Judge Barbara Crabb flatly denied this and dismissed the case with prejudice, which should have been the end of the matter. Instead, that ruling may have sparked the end of the war.

Apple and Motorola parent Google (Nasdaq: GOOG  ) started talking behind the scenes that day. Lawyers from both sides exchanged letters back and forth, discussing the idea of taking the royalty fight to arbitration -- and settling all their legal tussles with a comprehensive cross-licensing agreement. Yes, that includes satellite cases like Samsung's. These letters surfaced on Thursday as exhibits in a court filing by Apple (docket item No. 507).

Apple attorney Samuel Ernst got the ball rolling. In the first letter, he said that it was "welcome news" when Motorola stood before judge Crabb and offered to arbitrate the matter. Google representative Kent Walker said he was "committed to reaching agreement on a license" and put all this haggling behind them.

Both letters then move on to suggest details on how the arbitration should be done, and the whole exchange was posted in support of Apple's pointing out alleged flaws in Motorola's suggestions. Notably, Google wanted to let the pending litigation in Germany run its course and become the basis for a worldwide agreement -- which makes Apple suspect that Motorola expects a favorable outcome there, so let's hammer out a different plan.

Neither party will go gently into that good night, then. But there's a peace pipe to be smoked, even if the companies have to slap each other around a bit before sitting down to light it up.

Consumers win if Apple and Google get back to innovating rather than litigating. And if the mobile market's two strongest players suddenly drop all their courtroom distractions, that's bad news for wannabes Research In Motion (Nasdaq: RIMM  ) and Microsoft (Nasdaq: MSFT  ) , which no longer can rely on the big boys to derail one another.

There is absolutely no argument that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and, more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.


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