Vendors still talk as if engineering innovation were the king of tech, but they are in the process of conferring that title on the lawyers. Microsoft, Apple and Google are among the tech companies that are increasingly seeking competitive advantage not from
their research labs and design suites, but from lawyers and the courts. Billions of dollars and vast markets are at stake.
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Google is a good place to start to understand the shift. In May, Google bought Motorola Mobility for $12.5 billion, which seemed to be a very high price for a company that had been surpassed by competitors -- notably Samsung and HTC -- in the cutthroat mobile business.
Many people believed that Google was mostly interested in Motorola's cache of 17,000 patents, not its hardware or engineers. In a mobile landscape increasingly dominated by tit-for-tat lawsuits, those patents are an important means of self-defense.
In mid-August, Google lent credence to that view by announcing plans to lay off 20% of Motorola's workforce. On the same day it made that announcement, Google made a filing with the Securities and Exchange Commission that noted that Motorola had lost money in 14 of the previous 16 quarters. A company in such bad financial shape must have something other than its primary business to make it worth $12.5 billion. Those thousands of patents certainly seem to be the attraction.
So is that it? Does Google just want Motorola's patents? Following the layoff announcement, Jeff Kagan, an independent analyst, told Computerworld, "Everyone at Motorola is asking and fearing the answer."