Google announced last week that it was taking over Motorola Mobility for a whopping $12.5 billion. The acquisition provides Google with 17,000 patents with another 7,500 pending. This is the largest acquisition Google has made by far. Google’s chief executive, Larry Page, said it would help to “protect Android from anti-competitive threats.”
The Economist has an article that discusses the drawbacks from the acquisition, believing that it would make battles over patents nastier and more costly. Last December, Apple and Google were among four companies to purchase 880 patents from Novell for $450 million.
Companies are suing each other more and placing a higher value on intellectual property than they have in the past. Recently, money tends to change hands rather quickly in lieu of instigating drawn out legal battles.
Innovations in IT usually rely on several improvements across several platforms which raises questions about what patents are, in IT, and everyone is infringing on each other’s patents. It has turned into a foot race of first to file instead of first to innovate.
Kent Walker, one of Google’s senior lawyers states, “see how far we have strayed from the notion of innovation, that we need to acquire patents to fend off potential suits.” Corporate capital that is being used to acquire patents in order to strengthen a firms negotiation position could be used for R&D and promote growth and innovation.