Google’s consolation prize: A thousand IBM inventions to protect Android from Apple threat

Image credit: Gizmodo

Anticipating Android backers will face legal hurdles as Apple now has the upper hand in its case against HTC (here and here), Google has stepped up and bought more than a thousand IBM patents for an undisclosed sum. The news was first reported by the blog SEO by the Sea and picked up by The Wall Street Journal. The search company might use IBM inventions as a leverage against pending lawsuits that indirectly involve its Android software.

Google failed to outbid the Apple-led consortium which paid $4.5 billion for Nortel’s treasure chest of more than 6,000 patents covering wireless technologies, among them crucial inventions related to fourth-generation cellular networks. The new patent deal is in line with Google’s focus on snapping up patent portfolios left and right in creating a “disincentive for others to sue Google”, as noted on their official blog back in April. The 1,030 granted patents Google bought from IBM cover varied technologies, including…

“the fabrication and architecture of memory and microprocessing chips” plus other areas of computer architecture which “include servers and routers”, in addition to “relational databases, object oriented programming, and a wide array of business processes”. It is not immediately clear how the acquired patents relate to Android, but a Google spokesperson took this jab at Apple, telling CNET:

Like many tech companies, at times we’ll acquire patents that are relevant to our business needs. Bad software patent litigation is a wasteful war that no one will win.

Florian Mueller of the FOSS Patents blog explains how Google could use some of the patents to defend Android from litigation:

Google could sell some of those patents to embattled Android device makers such as HTC. HTC could then, for example, use them in countersuits or counterclaims against Apple, possibly with an obligation to sell the patents back to Google after the dispute.

Cross-posted on 9to5Google.com

And if Bernstein’s Toni Sacconaghi is right, then Apple is going to “push its legal claims hard and unrelentingly”, he tells Fortune. He foresees huge, positive financial implications for Apple should the company prevail in its anti-Android legal crusade. The analyst wrote in a note to clients: “We note that a 10 percentage point shift in smartphone market share from Android to Apple (the current run-rate smartphone market share is 46% for Android vs. 18% for Apple) in 2013 is worth an estimated $30B+ in annual revenue and $10+ in annual EPS to Apple”. He also noted Apple ships a much higher value of smartphones than any other player, as seen in the below chart accompanying his note.