This Samsung and Google Deal Could Burn Apple

Samsung and Google form an alliance against Apple with a new 10-year patent agreement.

Jan 27, 2014 at 6:00PM

Samsung last night announced a strategic alliance with Google (NASDAQ:GOOGL) that involves a 10-year global patenting agreement with the search giant. This is an important partnership that covers both existing patents and those filed over the next decade. Moreover, the deal could have far-reaching effects on mobile patent disputes, especially those related to Apple (NASDAQ:AAPL).

Google Glow

Source: The Motley Fool.

Patent wars
It's no secret that Samsung and Apple have been locked in years of litigation over their respective smartphone and tablet technologies. However, this deal will give Samsung and Google a key weapon against their tech rival in ongoing and future patent battles.

Cross-licensing Samsung's Galaxy smartphones and tablets with Google's Android system gives the two mobile tech giants a stronger defense against patent infringement charges. Google's deputy general counsel for patents, Allen Lo, said, "By working together on agreements like this, companies can reduce the potential for litigation and focus instead on innovation," he said in a press release.

After years and billions of dollars spent on patent disputes with Apple, it's refreshing to see Samsung find common ground with at least one tech titan. In a press release, Samsung said it hopes this agreement with Google will open the floodgates for other industry players (hint, hint... Apple) to cooperate with their peers instead of "engaging in unnecessary patent disputes."

However unnecessary as these disputes may be, Samsung is hardly a victim when it comes to patent politics. It was Samsung, not Apple, that was forced to pay more than $1 billion in damages to the other in 2012 after a jury ruled that Samsung had infringed on various patents for Apple's devices. Following the court's verdict that year, Apple had this to say about its adversary:  

The lawsuits between Apple and Samsung were about much more than patents or money. They were about values. At Apple, we value originality and innovation and pour our lives into making the best products on earth. We make these products to delight our customers, not for our competitors to flagrantly copy. We applaud the court for finding Samsung's behavior willful and for sending a loud and clear message that stealing isn't right.

This was one of the biggest U.S. patent trials in history. However, future patent suits may be avoided, or at least settled out of court, thanks to deals such as Samsung's new agreement with Google. Samsung has also inked similar agreements with other tech and mobile companies including Microsoft and Nokia. For Apple, on the other hand, Samsung's latest 10-year treaty with Google could ultimately make it more difficult for the iPhone maker to challenge those two companies over mobile patent infringements in the future.

A smarter way to play the smartphone revolution
Nevertheless, Apple and Samsung aren't the only tech powerhouses with the pulse of the smartphone market today. Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it! But it stands to reap massive profits NO MATTER WHO ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."


Fool contributor Tamara Rutter owns shares of Apple and Microsoft. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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