If Mike Myers' Dr. Evil ever returns in another Austin Powers movie, I know how he'd attempt to gain control of the world. He would buy up as many wireless phone patents as possible.
Ridiculous? Maybe not.
Because it just happens to be what Dr. Larry "Don't Be Evil" Page, the CEO of Google
Earlier this summer, Google tried to buy the Nortel Networks' portfolio of 6,000 patents. But a consortium that included Apple
To survive, or not to survive...
This desire for patent supremacy isn't just a "he who dies with the most patents wins" ego trip. It could mean life or something much less for tech companies.
There could be many thousands of patent claims on something like a smartphone, and the potential hail of litigation falling on smartphone producers could stifle technical innovation. The more patents a company owns, the greater the odds of avoiding lawsuits. Those not financially able to fight or settle those suits are left helpless.
So Google, the scorned Nortel suitor, saw Motorola's file cabinet full of some 17,000 patents as a powerful draw. Some might think that those patents embody the steak in Google’s feast, and that Motorola's hardware business is merely the creamed spinach.
Companies cleaning out their attics
Telecommunications company InterDigital
Digging a defensive patent moat
Companies like Google and Apple have a lot of cash on hand. There are three things they could do with that money -- besides letting it earn 0.12% at one-year Treasury bond rates:
- Pay dividends -- sigh, if only.
- Buy back shares.
- Acquire other companies (for diversification and/or to acquire intellectual properties).
Given the immediacy of the patent threats these companies face, door No. 3 (for the intellectual properties) seems like the safest move.
There will be many interesting developments in the technical patent realm in the coming months. To make it easier to keep track of what’s going on with the above companies, put them on your watchlist by clicking here.
A previous version of the article stated Google's final bid was pi. While pi was one of Google's bids, the final bid size is unknown.