Let us rewind back to a little over a month ago. Nortel, who filed for bankruptcy back in 2009, put its remaining patents portfolio up on the auction block.1 A number of big named companies bid for the patents, including Google and Intel among others, with the final bid awarded to an alliance of tech companies consisting of Apple, Microsoft, RIM, Sony Ericsson, and EMC. The portfolio sold for about $4.5 billion in cash, which is far more than the patents were actually worth. But hey, that's what an auction is for, right?
Though Google was not a winner in the bid for Nortel's patents, they did get a series of press mentions for the manner in which they placed their bids.2 Initial confusion arose over the figures Google chose, such as $1,902,160,5400, $2,614,972,128, and $3,141,592,653. You may recognize the last figure as being the first 7 digits of Pi, though it turns out that all of Google's bids were references to mathematical constants. While such behavior is no surprise to anyone who is familiar with Google's geeky culture, some analysts wondered if Google was not taking the auction serious, and thus making a mockery with their bids.
Fast forward to a month later, when Senior VP and CLO of Google, David Drummond, published a post on Google's official blog, chastising Apple and Microsoft for their participation in the auction.3 Drummond made a claim that Google's Android mobile operating system is a victim of a hostile, organized campaign [...] waged through bogus patents. Evidence of such exists in the fact that Microsoft is now demanding that Samsung4 and Barnes & Noble5 among others, pay royalties for each Android smartphone that it sells, due to patent infringement. A similar demand was awarded to Microsoft last year, after striking a deal with HTC, ensuring that Microsoft receives royalties for every unit sold.6 As irony would have it, Microsoft now makes more money from the sales of Android phones than from mobile handsets running the Windows Phone OS.7
Google is crying foul over the fact that these royalty demands are adding costs to what is intended to be a free operating system. Such cost narrows the advantage that Android has over the competition, and will very likely be passed down to the consumer. However, where the hypocrisy lies is in the fact that Google is publicly calling out its competition over a practice that has been excepted and protected by the courts, and deemed as fair game. Google is running a smear campaign based on the fact that it intentionally picked the short end of the stick.
No one will argue that the patent system is broken. Especially when it comes to software patents, that can sometimes be uncomfortably broad and all-encompassing. What was once a means of protecting hard work and creativity from being copied by others, the patent system has been transformed into an aggressive means of establishing dominance and stifling competition. While Google should indeed be applauded for it's resistance to build a significant patent portfolio throughout its years due to the flaws of the system, it should not cry foul when its political stance comes back to bite them.
Google also criticized the alliance for their anti-competitive strategy,[...] escalating the cost of patents way beyond what they're really worth. The $4.5 billion winning bid was four and half times larger than the pre-auction estimate. However, not only is Google being hypocritical in that it was in fact a participant of the auction, but also that it was Google's very own bids that drove the price so high. Nobody forced them to bid Pi.
Since then, Google has since acquired a number of patents from IBM,8 and is currently eyeing InterDigital's portfolio.9 Let us not ignore the biggest aspect of hypocrisy in Google's claims: the fact that it was invited to join the alliance of tech companies bidding for the patents, before the auction even took place. Microsoft's General Counsel, Brad Smith recently called out Google, stating that, "We asked them to bid jointly with us. They said no."10 Google would argue that its bids for the patent portfolio was a defensive maneuver to protect itself from such attacks, and that joining the alliance would place Google in a position where it would be unable to do so. However, the fact remains, whether playing offense or defense, you are still choosing to play the game. And, who are you to blame the competitor when your strategy backfires? If the Boston Red Sox decide to play a defensive game against the Yankees, both teams are still playing Baseball, and it's only fair when the Yankees win.
The argument of what is fair or not is a truly subjective one. Has Google been playing fair during its rise to dominance? Was it fair when Google undermined Microsoft's core products, an operating system and office suite, and handed it out for free? Was Google being fair when it restructured its original Android design to make it more similar to Apple's iPhone, and again handed it out for free? What gives Google the right to infringe on a number of patents and get away with it, when the rest of the industry has to play by the rules or pay the price? Sure, the rules are unfair and biased, but that is the way the game is played. You, Google, chose to play in this game.
