Two-Face: Will Google Become The New Patent Villain?

By MG Siegler , written on February 8, 2012

From The News Desk

Back in August of last year, Google was under attack. Some of their main rivals — namely, Apple and Microsoft — had teamed up to secure the Nortel patents, which Google was also vying for in order to protect Android. Google SVP and Chief Legal Officer David Drummond decided to take the fight public.

On Google's main blog, Drummond wrote a post entitled, "When patents attack Android". A key line:

A smartphone might involve as many as 250,000 (largely questionable) patent claims, and our competitors want to impose a “tax” for these dubious patents that makes Android devices more expensive for consumers. They want to make it harder for manufacturers to sell Android devices. Instead of competing by building new features or devices, they are fighting through litigation.
Drummond had a point which was backed up by the sentiment of many in the tech space: the patent situation had gotten out of control. Because Google was a relatively young company (and Android itself even younger), they were getting unfairly pushed around by more mature companies with bigger patent pools. It was threatening Android's very existence.

Then Google decided to buy Motorola. The tables turned. And the past couple of days, I've found myself thinking about a scene from The Dark Knight. Sitting at a dinner with Bruce Wayne talking about Gotham's Batman vigilante character, city District Attorney Harvey Dent says the following:

You either die a hero or you live long enough to see yourself become the villain.
Six months ago, David Drummond set Google up to be the hero. They were going to take a stand against the patent nonsense. Today, unfortunately, it's sounding more and more like they may become the villain.

The Wall Street Journal is reporting this evening that the U.S. Justice Department is on the verge of approving the Google/Motorola deal. Such approval, and subsequent EU approval, means the deal could close as early as next week. When that happens, Google will not only own Motorola, they'll own their over 17,000 patents.

To many, that seemed to be the point of the deal. Motorola, the company, is a dog — a dog bleeding money at an alarming pace. Motorola, the patent player, is a titan. Their pool will allow Google to jump from loser to winner in the mobile patent space. That's why you offer to pay $12.5 billion for a dog of a company. But there's an ugly flip side to this reality.

Leading up to the approval of the deal, Google had to make assurances that they would act fairly with the patents they were acquiring. Because Motorola has key patents on things like 3G and 4G technologies, this is vital for the industry.

But "acting fairly" is a funny thing. First of all, this is Google, the company that again, just six months ago, was bemoaning the state of the patent system. A company that prided itself on never going on the offensive with any of their patents.

But things change when you hold the keys to the entire kingdom. And instead of using those keys to open the doors for everyone, as their rhetoric six months ago may have implied, Google now seems happy to keep the status quo intact. Or worse.

You want to use their patents? You're going to have to license them, bitch. Okay, I added the "bitch" part. But you get the point.

Google is saying that they don't plan on making any changes to the way Motorola was enforcing their patent pool. This presumably means, among other things, they'll now be suing Apple and trying to block the iPhone from being sold in certain countries.

This also presumably means they'll be suing Microsoft and trying to bring down the H.264 video codec — which, by the way, Google created a competitor to (WebM) out of fear that someone would come along one day and try to enforce patents that would kill the H.264 video codec.

How's that for a mind fuck?

The tables have gotten so turned that it's now Apple and Microsoft who are complaining about patent enforcement. Specifically, both want assurances that patents licensed under fair, reasonable and non-discriminatory (FRAND) terms, are actually just that — fair.

In Motorola's eyes, "fair" is Apple paying 2.25 percent on each iPhone and iPad sold. John Paczkowski of AllThingsD did the math: this would mean Apple paying about a billion dollars a year in royalty fees to Motorola.

A billion dollars. The mobile unit that Google is buying lost $285 million for the year last year. Apple would be indirectly keeping them, a competitor, afloat.

If this sounds familiar, it's not all that different from the way Microsoft is taxing Android OEMs and likely making more money off of Google's mobile platform than their own (Windows Phone). Nor is the Apple situation all that different from the way that company is suing Samsung and others to try to block the sale of their devices (though Apple hasn't been interested in extracting a licensing fee at all).

The difference, again, is that Google sure made it seem like they were better than this nonsense. Come next week, they'll have the opportunity to prove that they are. But at least right now, it sure doesn't sound like they're going to do that.

It sounds like they lived long enough to become the villain.