It’s kind of amazing to consider that in just three short years, Google (NSDQ: GOOG) found its answer to critics fond of the “one-trick pony” slur with Android, currently the world’s most popular mobile operating system and the vehicle for Google’s ambitions in mobile advertising and application development. But now that Android is on top of the world it is faced with the greatest crisis of its short life as barbarians armed with patents mill at the gates.
Forbes this week revisited an amazing anecdote from Gary Reback, the attorney best known for hunting down Microsoft (NSDQ: MSFT) in the 1990s and harassing Google at present, from his days at Sun as a young attorney. When confronted by lawyers from IBM seeking licenses for patents that Sun believed didn’t apply to any of its products, an IBM lawyer referenced its horde of around 10,000 patents and supposedly said: “Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?” Sun paid.
Following Google’s inability to secure perhaps the biggest block of mobile patents ever put up for auction last week, the Android partners who have been key to its success are going to start seeing the mobile-computing equivalent of IBM—Microsoft—more and more frequently. Even before the Nortel patents were put in play Microsoft had launched a mobile strategy aimed at convincing Android partners that Android wasn’t really free: there was a patent-licensing toll that just hadn’t yet been collected.
But now that Microsoft, Apple (NSDQ: AAPL), Sony (NYSE: SNE), Research in Motion (NSDQ: RIMM), Ericsson (NSDQ: ERIC), and EMC control the 6,000 patents auctioned off by Nortel for $4.5 billion, Google is scrambling to figure out what to do next. The company declined multiple interview requests about the aftermath of the auction and the plan going forward, but a few interesting details emerged this week regarding the auction and its impact on Android.
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