Reasons why the Motorola patent portfolio will protect Android, help Google licensees

Motorola is believed to have over 17,000 patents and has another 7,500 pending. And if I owned Google, I would be insane not to think about acquiring the giant phone maker instead of jumping on the Nortel deal. Almost twenty four hours later, stocks of the other Google licensees, Samsung (+3.9%), HTC (+2.2%) and LG (+1%), have risen in response to the Motorola deal. Google bought Motorola at high price of $40 per share, 63 percent over Friday’s closing stock price. This shows how the Android OS maker is determined to strengthen its patent portfolio to “provide an umbrella for the Android community and intellectual property protection from key rivals such as Apple and Microsoft.” Let’s also not forget Google’s recent purchase of over 1000 patents from IBM.

Taiwan’s HTC advanced 2.2%, while in Seoul, Samsung Electronics advanced 3.9% and LG Electronics added 1.0%. Meanwhile, Hong Kong-listed Foxconn International jumped 14% and Taiwan’s Compal Communications was limit up 7%; both handset makers are key clients of Motorola.

According to Alexander Poltorak, CEO of General patent Corp., Motorola’s patent portfolio will deter companies from legally going after Google. He later on added that “”Now they will think twice before filing a complaint, because they can be guaranteed Google will strike back.”

A research analyst from Deutsche Bank, Jonathan Goldberg, claims that the ongoing deal will give Google a “lot of heft.”He also added that Motorola is one of the oldest mobile makers and has also strong and credible patent portfolio with about 24,500 patents (17,000+ 7,500 pending).

Although all of this news sound great, the Motorola acquisition is far from being complete. According to Bloomberg, this deal is going to take a couple of months, perhaps even more, to get wrapped up. In the case it doesn’t go through, Motorola will shed $2.5 billion. On the other hand, Motorola will have to pay $375 million to Google if they decide to back out of the deal. It is still unclear how Google is going to help Samsung or HTC in their cases against Apple. We think that it really depends on how fast the acquisition gets completed to actually see what kind of tricks Google has in its bag.

via WSJ, Bloomberg