Watch CBSN Live

Google to Apple and Microsoft: Take That, Right in the CPU

Google (GOOG) and its hardware partners have whipping boys in the mobile patent wars. Apple (AAPL), Microsoft (MSFT), Oracle, and others have all used patent infringement litigation to try and cut Android off at the knees. Now Google has just bought itself a very large legal stick to swing back.

Google purchased 1,030 patents from IBM, as the SEO by the Sea blog reported. Covering such ground as chip architecture and fabrication; computer, server, and router architecture; relational databases; object-oriented programming; and business processes, this is a mother lode of IP that could put Google in a much stronger negotiating position with its antagonists.

Google has said little other than confirming the general notion that the company buys patents. To date, it and its partners have been outclassed in patent legislation over Android because they had little to bring to bear against the other companies. There's even trouble on the video encoding front, as 12 patent holders claim that their patents are infringed by Google's VP8, the basis of its WebM open video format project. That's why Google needed to buy a powerful block of patents, as it didn't have the time to develop the intellectual property from scratch.

Big Blue comes through
The Nortel patents that were at auction would have been a good start, but a consortium of Microsoft, Apple, Oracle, and RIM outbid the search giant. To show how important the right patents are as legal weapons to take the mobile market, Apple alone shelled out $2.6 billion. Google was disappointed by the results and taken aback at how high the bidding went.

Google needed something, and apparently it has been working on a quiet deal with IBM that left others out of the bidding. Maybe this was a form of payback from IBM for Apple having dropped the PowerPC chip in favor of Intel years ago. Whatever the reason, and however big the price tag, this is bad news for everyone but Google:

  • Oracle's income rests largely on databases. It has also moved into the infrastructure and server realms with its purchase of Sun. Even Java, an object-oriented language, could possibly feel some pain from the IBM patents.
  • Apple creates its own chips to power the iPhone and iPad, and so might be vulnerable to the semiconductor fabrication and architecture patents. Its programming language of choice, Objective C, is object-oriented. All the patents focused on databases could come into play over storing and retrieving any digital files, including music, video, images, and e-books.
  • Microsoft is potentially vulnerable on many fronts, from programming, databases, and search engines to chip architecture.
This patent purchase raises the question of what other deals might be happening out of sight. Kodak has more than 1,100 patents on digital image capture, editing, storage, organizing, and sharing that it's trying to sell. Google's acquisition of those could prove uncomfortable to Apple and Microsoft. Might Google and Kodak be close to a deal?

Although it's impossible to yet say if Google lawyers have nailed down important patents -- and it's hard to believe that they would spend the billions that a portfolio like this would ordinarily fetch if they would have no use in litigation -- then it may have just pulled itself out of the deepest problem its management team has faced.


Image: stock.xchng user asifthebes, site standard license.
View CBS News In