You have to hand it to Google and Apple, they sure do know how to learn from past mistakes and come back from an error stronger than ever. While this observation can ring true for a wide range of activities these tech giants have engaged in, this is particularly true when it comes to their costs of acquiring patents. Buying patents is never cheap. And Google learned this the hard way when its bid to buy bankrupt Nortel Networks’ patent portfolio for $900 million got rejected in favor of Microsoft, Apple, and Research In Motion’s beefier $4.5 billion bid. Google, along with Apple and Microsoft (I am not going to list Research In Motion since its pretty much under death/buyout watch along with Nokia) is interested in patents in telephony and imaging because it needs them to protect its intellectual property theft. These companies buy patents to protect themselves from lawsuits or, if the situation arises, (as in the case of Oracle’s buyout of Sun Microsystems leading to a suit by Oracle against Google Android’s inclusion of Java code) use it as a legal sword. The stakes are high. Since smartphone telephony is a fast evolving and fast moving field, you need all the legal and IP space you can get fully maneuver your company as it anticipates the changing directions the market wants your company to go.
Google learned from its failed bid so instead of going head to head against Apple, it sought to buy the patents together. The strategy paid off. Instead of paying $900 million or $4.5 million like the other deals, the two giants snapped up Kodak’s patents for only $500 million plus. Now, that’s a great strategy and a great way to save money. These patents are important because, unless you’ve already forgotten, Kodak was the world’s leading imaging and photography technology company. Since most mobile phones have cameras now, Kodak’s technology for sharing, manipulating and capturing digital imagery is more relevant than ever. Kodak is still alive-it is just under restructuring.