The one where we try to make sense of patents

burning the shipsSo, Google announced today that it was acquiring Motorola Mobility, and we’ve been reading every blog post we can find since then to try and make sense of it all.  In fact, we were trying to make sense of software patents even before this morning’s momentous news, picking up a copy of Marshall Phelps’ “Burning the Ships”, the 2009 book by the architect of Microsoft’s current patent strategy (perhaps short on behind the scenes detail, but a good overview), listening to This American Life’s recent podcast “When Patents Attack”, which attempts to probe ex-Microsoft CTO Nathan Myhrvold’s Intellectual Ventures and other “patent trolls”, and subscribing to and following Florian Mueller’s excellent FOSS Patents blog and Twitter account.  Mueller has been digging deep into patent strategies for a long time, and his insights are valuable.

Needless to say, there was a lot to read today, too.  So much news about the Google – Motorola deal, in fact, that MG Siegler reminded startups that maybe this wasn’t the best day for a launch, after all.  But when everyone has an opinion, and everyone has an angle, it’s hard to sift through all the news and really understand what’s going on.  We’ve tried, anyway, and here’s our list of Thoughts about Patents:

  1. Software patents are not going anywhere anytime soon.  While the system may be broken, it’s the only system we’ve got, and any changes would take years.  Our current government has a bit more on its plate at the moment than patent reform, for one thing.
  2. Software patents are valuable both offensively and defensively.  Patent portfolios work like the “Mutually Assured Destruction” arms race did: if I have enough patents to sue you, you need enough to be able to threaten to sue me back if I try.  Then we can work out a cross-licensing deal, reaching “détente”.  Obviously with no defensive portfolio, you’re screwed (no matter how much you whine in blog posts).
  3. While Microsoft and others have taken their patent portfolio seriously since the early 2000’s, Google has historically downplayed their value, and finds itself seriously behind in the “arms race”.  Google’s attempt to give away Android, with no protection against patent attacks, lasted long enough to give Google a good start, but those days are probably over.
  4.  Google realized its position was weak, approached Motorola, and bid on the Nortel patents to strengthen their position.  While the famous “pi bid” might have seemed frivolous, it’s now apparent that Google knew if it didn’t win the Nortel bid, it still had Motorola.
  5. So now Google has Motorola’s 17,000 patents, many in 2G/3G technologies, 4G LTE and Wimax innovations, and mobile handset technology in general, “possibly the strongest in the mobile field”.
  6. Still, Motorola’s patents aren’t going to be enough for Google to continue whistling in the dark.  With the Motorola Mobility acquisition, Google goes from weak to somewhat less weak, but without further maneuverings, its position is anything but strong.
  7. Things also are quite a bit murkier for both the other Android OEMs (HTC, Samsung, etc.), and also Android app developers.  Google has not shown as of yet it is positioned to fully protect either other OEMs or developers, although it has at least acknowledged the problem with its request to the USPTO to re-examine Lodsys patents.
  8. Apple is in a strong position, with its own and a chunk of the Nortel patents to protect itself and go after Android, which they seem to be doing quite happily.
  9. Patent-wise, Microsoft may be in the strongest position of all.  Its been playing this game for a long time, is at or near the top in numbers and value of patents, and has deals in place with Nokia that make it even stronger in the mobile patent space.
  10. With Android, Google made a bold bid and got out to a strong start by basically ignoring the current state of software patents.  Microsoft is in the strongest position, patent-wise, and yet it is barely a blip on the smartphone market landscape.  When all is said and done, the one with the most software patents might not necessarily win.

One thing is for sure, this game is still being played out, and the only surprising thing would be if the smartphone market looks the same in two years as it does now.   Will patents decide the contest?  Will Android’s other OEMs take a new look at Windows Phone now that Google is soon to own Motorola?  Will the patent wars even make a difference in Windows Phone’s attempts to gain market share?  How do you think it will all play out?