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Google buys Motorola for $12.5 billion

In a shocking move, Google forked out $12.5 billion for Motorola Mobility, the company that 30 years ago invented the cell phone, when it was simply called “Motorola”. This is Google’s biggest acquisition yet, giving it a firm foothold in the mobile device market, though at least for the time being, Motorola will still retain its name and operate mostly as an outside company.

To what extent Google will leverage its new mobile device power is still yet to be seen, as they company said that Motorola will still have to compete with other companies to make the Nexus smartphone, but the buy shores up a number of patents in a tech world where keeping your competitors in court for years over patent violations is par for the course.

As Android has grown to become the world’s most used smartphone operating system, Google has faced an increasing number of patent lawsuits, most recently from Microsoft and Apple.

“We’ve been saying for some time that we intend to protect the Android ecosystem,” David Drummond, chief counsel for Google, said Monday on a conference call with analysts. “We think that having this kind of patent portfolio to protect the ecosystem is a good thing.” Google recently tried to buy a portfolio of key telecommunications patents from bankrupt Nortel for $1 billion. But the winning bid — of a whopping $4.5 billion — was submitted by Google’s rivals, including Microsoft and Apple.

Acquiring patents is often used as a defense tactic to stave off lawsuits from competitors. Whether the claims are legitimate or not, rivals often sue one another for patent violations to scare away potential partners or take some of the revenue off the top of their competitors’ sales. America’s patent system is so complex that such claims can take years — and cost millions — to litigate.


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