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Did You Notice When These 3 Tech Giants Joined Forces?

By Anders Bylund – Feb 7, 2014 at 4:39PM

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Cisco, Google, and Samsung just created one of the tech industry's largest patent pools. What's the big idea?

This week, Cisco Systems (CSCO -0.35%) signed a cross-licensing agreement with South Korean tech giant Samsung. This wouldn't be all that noteworthy if not for the fact that Cisco also signed a similar patent deal with Google (GOOGL -1.02%) just 24 hours earlier.

Oh yeah... Google inked another 10-year patent pact with Samsung only last week.

The end result of this matchmaking is a three-way cross-licensed patent pact between three of the biggest names in technology. The triple handshake creates a patent pool with tens of thousands of important filings. They cover Cisco's work in network security, 15,000 of Motorola's mobile patents, and Samsung's research in every corner of the electronics industry.


Original image created from official logos provided by Google, Cisco, and Samsung.

It's a counterbalance to the Apple-led Rockstar patent consortium, which bought up bankrupt networking specialist Nortel's patents for $4.5 billion, and now uses those assets to wage courtroom battles against -- yep, Cisco and Google.

And with Motorola out of the way, the whole arrangement seems designed to make Cisco and Samsung cozy up to Big G more tightly than ever before. If you were worried about Samsung slipping out of the Android fold, I think you can put those fears to rest now.

The three companies thoroughly slapped one another's backs about the patent arrangements. Seungho Ahn, Samsung's head of intellectual property affairs, crystallized the meaning of it all when he described the Google treaty: "This agreement with Google is highly significant for the technology industry. Samsung and Google are showing the rest of the industry that there is more to gain from cooperating than engaging in unnecessary patent disputes."

In other words, why don't we all put our patent quibbles aside and just try to out-execute each other? If Ahn could have mentioned Apple (AAPL -1.96%) by name, rest assured that he would have. Apple is tied up in litigation against Samsung and Google across the globe, and I can't think of a single instance where Cupertino didn't launch the first lawsuit.

Apple has started sending signals that it might be done with patent lawsuits. This sudden trio of mutually reinforcing partnerships might be the last straw that breaks Apple's will to litigate. Mind you, I'm not holding my breath until that snowball forms in Miami -- but stranger things have happened.

Anders Bylund owns shares of Google. The Motley Fool recommends Apple, Cisco Systems, and Google. The Motley Fool owns shares of Apple and Google.

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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