Wednesday, July 27, 2011

Google | Google, InterDigital, HTC-Apple, Irell & Manella: Intellectual Property

Google Inc. (GOOG) General Counsel KentWalker said the smartphone industry is in an arms race forpatents that is hurting consumers and leaving the company to"sort through the mess" of litigation.

"It's hard to find what's the best path -- there's so muchlitigation," Walker said in a July 25 interview. "We'reexploring a variety of different things."

Google, whose Android mobile operating system has beentargeted in at least six legal complaints, is seeking to buy intellectual property that could be used as a defense againstlitigation. Google, the world's largest Internet search company,is also seeking to curb abuses of the system, calling onCongress and the Federal Trade Commission to rein in lawsuits,and asking the U.S. Patent and Trademark Office to take closerlooks at patents being used in litigation, Walker said.

"The tech industry has a significant problem," he said."Software patents are kind of gumming up the works ofinnovation."

Google's competitors have said the Mountain View ,California-based company is critical of the patent systembecause it has few patents of its own and entered a smartphonemarket where companies had been researching and selling productsfor years before Android phones went on sale in 2008.

Google has been assigned 728 patents through yesterday,according to the U.S. Patent and Trademark Office database,mostly for search engine technology. Apple has more than 4,000U.S. patents, and Microsoft Corp. (MSFT) more than 18,000, according tothe database.

The Android system is a free, open-source program thatrelies on some nonproprietary features Google didn't create andallows outside developers to modify the code. That has left thecompany vulnerable to claims that it built Android on the backsof research done by other technology companies.

Google, which had $39.1 billion in cash and short-terminvestments as of June, put in an initial $900 million offer inApril to buy the patents of bankrupt phone-equipment makerNortel Networks Corp. It was outbid by a group that includesApple, Microsoft, and Research In Motion Ltd. (RIM) , which all makedevices that compete with Android phones.

Walker wouldn't say whether Google will bid on InterDigitalInc. -- an owner of more than 1,300 patents that is exploring apotential sale -- the digital-imaging patents of Eastman KodakCo. (EK) or any other portfolio of intellectual property.

"We want to be disciplined about how we approach all thisstuff," Walker said. "We're looking for a reasonablealternative, but we want to make sure Google and the companiesGoogle partners with aren't shut out of the opportunity to bringgreat new products and features to consumers."

Oracle Corp., the world's largest supplier of databasesoftware , contends Android uses its Java programming language,in violation of patents and

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