In case you haven’t heard, there are a handful of tech giants hoarding loads of cash. Their respective bankrolls are as follows:
• Apple – $76.2 billion, which, interestingly, amounts to more cash than the U.S. Government has on hand at the time of this post. Apple has not made any major acquisitions in 2011.
• Microsoft – $52.7 billion. Noteworthy here is there recent purchase of Skype. Maybe we will finally get an iPad native app? One can only hope.
• Cisco – $43.3 billion. Cisco has made three acquisitions this year (which pale in comparison to other tech companies’ investments)
• Google – $39.1 billion. Google has made over a dozen acquisitions in 2011.
With a collective cash value of over $210 billion, the question remains: what are these behemoths going to do with all of their money? Certainly there are higher returns to be had than keeping this kind of money in short-term accounts … don’t you know it goes bad after a while?
Speculation abounds as to how these companies will divest their cash. However, patents, in particular, are of great interest to all. Recently, Google lost a bidding war for some 6,000 or so patents up for grabs in connection with Nortel’s bankruptcy liquidation. Apple, Microsoft, RIMM and Sony won the auction as a consortium with a final bid of $4.5 billion.
With Google (in conjunction with Intel) bidding amounts such as Pi Billion dollars ($3.14159 billion) or Brun’s constant ($1,902,160,540), one cannot help but wonder how serious Google was in this auction, especially considering how Google is in dire need of a more formidable patent portfolio to help protect itself from Android related lawsuits.
Remember the lawsuit brought by NTP, a patent portfolio company that threatened to bring down Blackberry giant RIMM back in 2006? It took over $600 million for RIMM to settle that suit, but that pales in comparison to the problems Google currently faces with patent litigation. Google’s interest in bolstering its patent portfolio is largely seen as a defensive measure and for good cause.
Currently there are over 45 patent infringement lawsuits weighing down both the Android mobile operating system itself, as well as makers of Android-based devices (which have been forced to pay significant royalties to rights holders). Of special note, database giant Oracle currently has a lawsuit against Google for $6.1 billion. Oracle claims that Android infringes on its Java patents that it
acquired along with Sun Microsystems in early 2010. If Oracle prevails on this suit, their purchase of Sun for $7.4 billion dollars will have nearly paid itself back on this one suit alone.
So, when you are developing your latest mobile application, or otherwise, remember that pearl of wisdom first articulated by Notorious B.I.G: “Mo’ money, mo’ problems.” In the way of your success may stand some nasty little patent troll waiting to rear his ugly little head and demand that you to pay the toll. This is a big problem facing a lot of developers today, but is by no means insurmountable. Next week, we’ll discuss you can overcome and defeat the dreaded patent troll.