Apple Agrees With Google to Drop Smartphone Patent Suits

Apple Inc. and Google Inc. (GOOG) have declared a cease-fire in their intellectual-property wars.

The two Silicon Valley technology giants said they are dropping lawsuits against one another and will work together to reform patent law. The suits to be dismissed involve patent disputes regarding Google’s Motorola Mobility handset unit. The deal doesn’t include Apple’s patent battles with Samsung Electronics Co. (005930), which uses Google’s Android software for mobile devices.

"This could signal a new strategy on Apple’s part to focus its litigation efforts even more squarely on Samsung, which is by far the largest Android phone manufacturer," said Brian Love, a Santa Clara University School of Law professor.

The agreement signals a de-escalation in hostilities between two companies that have filed about 20 lawsuits against each other in the U.S. and Europe and compete fiercely on many technology fronts. Apple’s iOS software and Google’s Android power the majority of the world’s smartphones and tablets and both are seeking to keep their pre-eminent positions in those growing markets. They are also dueling each other in areas including mobile maps and online music, among other products.

"Apple and Google have agreed to dismiss all the current lawsuits that exist directly between the two companies," they said yesterday in a joint statement. “Apple and Google have also agreed to work together in some areas of patent reform. The agreement does not include a cross license."

The announcement comes as the two companies, due to court rulings, were spending tens of millions of dollars in legal fees over an ever-shrinking list of possible rewards. In one case, Apple told a court that it spent $32 million in legal fees, midway through proceedings.

Mountain View, California-based Google was unable to win court orders to limit Apple sales and had been limited in its ability to demand royalties.

Google agreed in January to sell Motorola Mobility to Lenovo Group Ltd. (992) for $2.91 billion after buying it for more than $12 billion in 2012. As part of the deal, Google is keeping the majority of Motorola’s patents.

"It’s largely symbolic," Michael Risch, a law professor at Villanova University, said of the joint statement. "Motorola isn’t as big of a competitor anymore," and the cooperation shows Apple isn’t as concerned about the company, he said.

"When they decide to drop everything with Samsung, then we’ll be talking," Risch said.

Google inherited the cases when it bought Motorola Mobility to obtain a trove of about 17,000 patents and applications. After almost three years of litigation, the web search company and Cupertino, California-based Apple have little to show for the litigation except legal bills.

Last month, an appeals court ruled the companies could pursue patent damages against each other in one case, while saying Google wouldn’t be entitled to an order stopping sales of Apple products based on the sole remaining Motorola Mobility patent in the case. Apple had at best a slim chance of blocking Motorola Mobility phones based on other court rulings.

In disputes before a U.S. trade agency, neither was able to win import bans on the other’s products. Apple was trying to revive claims that Motorola Mobility had reneged on its pledges to license patents for fundamental technology on fair and reasonable terms. European and U.S. regulators, acting on complaints filed by Apple and Microsoft Corp. (MSFT) forced Google into making concessions on its use of patents for industrywide standards.

The companies can now cooperate on one thing they agree on: curbing lawsuits against them by patent-licensing firms. Apple was the most-sued company last year when it came to patent cases, and Google was No. 4, according to a study by Lex Machina, a Menlo Park, California-based legal analysis company.

Google has been funding groups that are lobbying Congress to pass legislation that would put more stringent requirements on firms filing suits, cause the loser to pay the winner’s legal fees and expand review processes at the U.S. Patent and Trademark Office as an alternative to litigation. While supporting some changes, Apple is part of a group that includes Microsoft and General Electric Co. (GE) that has warned against Congress going too far in limiting patent rights.

Both companies also have been in a race to obtain more patents. In 2008, the year after the iPhone was introduced, Apple received 185 U.S. patents, while Google received 58. By 2012, each received more than 1,000, and that doesn’t include the numbers they bought.
(News courtesy : bloomberg)