Sunday, April 28, 2013

Post 26- Google Doesn't Get Royalties It Originally Demanded from Microsoft

Hello, this week I read an article posted by Mueller of Foss Patents, and it discussed Microsoft and Google's dispute over royalties for Motorola's standard essential patents in the court of the Western District of Washington. The patents owned by Motorola were related to video and wifi capabilities and Motorola initially hoped it would get 4 billion dollars a year in royalties, which would mean that in only 3 years, Google would have made back all of their money they spent on Motorola. Instead, however, the FRAND royalty payment will be about 1.8 million dollars per year from Microsoft to Google, so to get the 12.5 billion dollars, they would need to receive the 1.8 million dollar annual royalty for the next 7,000 years! Additionally, many of those patents will expire shortly anyways, so Google won't be able to collect royalty payments as long as it would have liked. Lastly, initially it seemed as if Microsoft would have to pay Google only 1.2 million dollars, but then the royalty was increased to 1.8 million dollars, but this increase in revenue for Google is so negligable and only a fraction of what goes into the costs of patent litigation that it really is difficult to consider this a victory for Google in any way, shape, or form. BusinessInsider fittingly titled their article,  "Microsoft Slapped Google Around In Court, And It's Becoming Clear Google Overpaid For Motorola," and they appropriately sum up the current state of events for Google. 

5 comments:

  1. wow. i didn't know this about google. I agree, it does seem like their purchase of motorola did not help them, but it is possible that later down the line, the deal could help the company

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    1. I agree there are some potential business gains for Google from making this acquisition and we have yet to see them realize themselves, but their patent litigation successes are really lacking and these patents that were so valuable from Motorola have yet to yield visible gains.

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  2. I believe that Google tried to utilize Motorola for a buffet against other patent litigation, and use the hardware Motorola possessed for the software that google had. But, 12 billion for this is a ridiculous amount.

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  3. Google has been in the hot waters lately with a lot of litigation. It sucks a lot of things aren't going their way right now especially when they couldn't get a lot of the royalties from Microsoft's patents (i think it was Microsoft).

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  4. Google's purchase of Motorola was grossly miscalculated. They expected Motorola's patent portfolio to give them a huge source of revenue. But this is not working for Google. It will be interesting to see what strategies Google implement now.

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