EE204: Business Management for
Electrical Engineers and Computer Scientists

Google Acquires Motorola Mobility: Strategic Use of Intellectual Property

Case Summary

In 2011, Google announced its intention to buy Motorola Mobility for $12.5 Billion in cash, an acquisition which doubled Google's workforce and increased the size of its patent portfolio to more than 17,000 patents, one of the largest portfolios in the world. From a product perspective, Motorola Mobility's handset business could allow Google to sell integrated hardware/software devices to compete with Apple's iPad and iPhone. At the same time, Google affirmed its commitment to supporting other Android handset manufacturers, to growing the Android userbase, and to supporting Android application developers by licensing the Android operating system free of charge. In this class, we will discuss the strategic use of patents by Google as exemplified by its acquisition of Motorola Mobility, and introduce you to tools you can use to resarch patent information.

Read

  1. Case: Google Acquires Motorola Mobility
    1. http://www.bloomberg.com/news/2012-07-25/google-says-almost-half-of-motorola-purchase-price-for-patents.html
    2. http://www.fosspatents.com/2012/08/these-are-seven-patents-googles.html
    3. http://www.economist.com/blogs/babbage/2011/08/valuing-patents
  2. Read Exemplary Patents using Onlne Tools
    1. Use the Patent Search websites (Google recommended) to review the following U.S. Patents.
      1. U.S. Patent No. 6,983,370 on a "system for providing continuity between messaging clients and method therefor"
      2. U.S. Patent No. 7,383,983 on a "system and method for managing content between devices in various domains"
    Websites:

Discussion Questions

  1. Study Questions. Please complete the case readings in the context of the following questions
    1. Why did Google purchase Motorola Mobility?
    2. Focusing on patent 6,983,370, did Google make or sell any products that might infringe on this patent at the time of the acquisition? Read both text and diagrams from the patent to help with your analysis.
    3. Assuming Google makes little or no money from licensing Android or selling phone hardware, what market are they protecting with Motorola patents and why?
    4. How does the purchase of Motorola Mobility change Google's strategic position in mobile devices and search?
    5. Google paid more than $500,000 per patent for this portfolio. If you were the chief legal counsel for Google, how would you justify the purchase price to Google's Board of Directors?