Google Buys Motorola for ‘Superpower’ Status

Google Inc. (GOOG) is relying on its planned $12.5 billion purchase of Motorola Mobility Holdings Inc. to forestall patent litigation and force settlements with Apple Inc. (AAPL) and Microsoft Corp. (MSFT) over smartphone technology.

Google cited patent disputes as key to its agreement to buy Motorola Mobility, announced yesterday. Apple, maker of the iPhone, and Microsoft, developer of Windows Phone software, have targeted phones that run on Google’s best-selling Android system, including handsets built by Motorola Mobility, Samsung Electronics Co. and HTC Corp. (2498), in lawsuits worldwide.

Lacking its own trove of patents to vie with Apple, Microsoft and other companies, Google and its hardware partners were targeted by suits aimed at slowing the adoption of Android smartphones. Adding the 17,000 patents of Motorola Mobility, which has been inventing mobile-phone technology since the industry began, may help Google stanch the onslaught.

“The analogy to a nuclear arms race and mutually assured destruction is compelling,” said Ron Laurie, managing director of Inflexion Point Strategy LLC, which counsels companies on purchasing intellectual property. Google and its rivals “look pretty evenly matched at the moment. Google may have become a patent superpower.”

The goal of Google’s new patent clout is also to act as protection for the handset makers that have been bearing the brunt of the litigation, the company said yesterday.
Patent Weaponry

Competition for dominance in the smartphone market has heated up since Google introduced Android in 2008. Patents, which grant exclusive rights to use a specific invention, have become a way to fight for market share and inhibit rivals from introducing new features.

Apple stepped up the patent feud by suing Android manufacturers, claiming Google-powered devices copy the iPhone and iPad. Microsoft has sued Motorola Mobility and Barnes & Noble Inc., whose Nook reader runs Android software.

Apple and Microsoft have focused on the devices that run on Android, while Oracle Corp. (ORCL), which has sued Mountain View, California-based Google directly, contends Android was developed using its Java programming language. Oracle is seeking billions of dollars in damages for patent- and copyright-infringement, and Google’s response has been limited to challenging the validity of Oracle’s patents.

Heightening the dispute, a group led by Apple and Microsoft won an auction of patents owned by Nortel Networks Corp. in June after bidding up the price to $4.5 billion, beating out Google in the largest-ever patent auction.
Google Shops Around

Before agreeing to buy Motorola Mobility, Google had few patents on mobile-phone technology. The company’s research had focused largely on its main search-engine business.

Google, seeking to tilt the balance, has actively sought patents that it said could be used as a deterrent to litigation, culminating in the purchase of Motorola Mobility. Google bought more than 1,000 patents in July from International Business Machines Corp.

“Yesterday you could sue Google and you weren’t taking any risks because they didn’t have any patents,” said Pierre Ferragu, an analyst at Sanford C. Bernstein in London. “Today it’s the same as suing Motorola.”

The purchase of Motorola Mobility lessens the likelihood of future bidding wars, Ferragu said.

“You have very, very few transactions that would make sense today,” he said. “You possibly have some smaller transactions as Google continues to shop around for quality.”
‘Level Playing Ground’

Motorola Mobility traces its roots to the 1928 founding of Galvin Manufacturing Corp. in Chicago. The company, renamed Motorola, was a pioneer of early televisions and two-way radio in World War II. It helped lay the foundation for the mobile- phone industry, demonstrating its first handset in 1973.

“Motorola was a pioneer in this business,” said Will Strauss, an analyst at Tempe, Arizona-based Forward Concepts Co. “They certainly have a lot of intellectual property. It will certainly level the playing ground quite a bit. It’s going to give them an awful lot to defend Android with.”

The purchase would directly embroil Google in litigation, where its partners have until now been the main targets. Motorola Mobility has its own pending lawsuits against Apple and Microsoft. A case Microsoft brought against Motorola Mobility is due to begin trial Aug. 22 at the U.S. International Trade Commission in Washington, and a victory may mean a ban on imports of Motorola phones. Motorola Mobility retaliated with a bid to ban U.S. imports of Microsoft’s Xbox video-game systems, with a trial scheduled for October.
Protecting the Ecosystem

Motorola Mobility’s case against Cupertino, California- based Apple also was scheduled to begin Aug. 22, though it’s been postponed. Apple’s case against Motorola begins in September at the ITC. Samsung and HTC also have each filed separate suits against Apple.

“We believe we’ll be in a very good position to protect the Android ecosystem for all of the partners,” Google Chief Executive Officer Larry Page said in a conference call with analysts yesterday. Motorola will manage the litigation until the acquisition is completed, expected by the end of this year or early next year, he said.

Kevin Kutz, a spokesman for Redmond, Washington-based Microsoft, declined to comment on what Google’s purchase of Motorola Mobility might mean for the litigation. Kristin Huguet, an Apple spokeswoman, also declined to comment.
Nokia Agreement

Apple has been winning so far, with an ITC judge’s finding that, if upheld, could lead to a ban on imports of HTC phones into the U.S. and a court order that prevents Samsung from introducing its new Galaxy Tablet in most of the European Union. As yet, nothing has stopped sales of Motorola’s phones or Xoom tablet.

Google may be hoping that an agreement can be reached with Apple that mirrors one the computer maker struck with another phone pioneer, Nokia Oyj (NOK1V), said Bernstein’s Ferragu.

The Finnish phone maker in June said it won an almost two- year patent dispute with Apple in a settlement that provided it with a one-time payment plus royalties.

“From that, you could infer that in the end it’s going to be Apple paying Motorola, paying Google,” Ferragu said.

While there will continue to be patent purchases in the mobile-phone market, litigation may slow if Google is successful in its strategy of using patents as leverage to strike settlements and keep further lawsuits at bay.

“It may not be the end, but you can see it from here,” said Inflexion Point Strategy’s Laurie. Google “was such an obvious target, and now they’re not,” he said.

To contact the reporters on this story: Susan Decker in Washington at sdecker1@bloomberg.net; Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net; Tom Giles at tgiles5@bloomberg.net
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Did Apple doctor evidence in Samsung patent suit?

Apple allegedly provided incorrect evidence in its patent case against Samsung to make the Galaxy Tab 10.1 tablet appear closer in size and shape to the iPad 2.

At least, those are the findings from Dutch IDG publication Webwereld.nl (English translation).

Examining pictures found in a document that Apple recently submitted to a German court, Webwereld.nl found one of the photos of the Tab to be inaccurate. Photos on page 28 of the document show the Tab and iPad 2 as "practically identical" in appearance.

But according to the Dutch publication, the Tab image in the document does not match the real Galaxy Tab, which is "longer and more oblong than the iPad 2." Specifically, the actual Tab has an aspect ratio of 1.46. The image of the Tab created by Apple shows an aspect ratio of 1.36, closer to the iPad's ratio of 1.30.

Whether the alleged inaccuracy on the part of Apple is intentional or accidental, it throws into question at least some of the evidence on which a German court based a recent decision.

Apple has been embroiled in a patent suit against Samsung for several months now, alleging that the Galaxy Tab 10.1 has illegally taken technology from the iPad. As part of the suit, Apple succeeded last week in convincing a German court to issue a temporary injunction banning the sale of the Tab in virtually all nations of the European Union.

Arnout Groen, an intellectual property rights attorney at Klos Morel Vos & Schaap, was quoted by Webwereld.nl as saying that the inaccurate Tab photo is a "blunder" and a mistake that "can hardly be a concidence." He added that it's up to the court's discretion on how to deal with this "faux," but a reprimand or swipe by the court seems in order.

Florian Muller, a consultant in intellectual property cases and owner of the Foss Patents blog site doesn't believe the intent was malicious on the part of Apple and its lawyers and thinks the Tab image may have come from a pre-release prototype of the tablet used in a prior lawsuit, according to Webwereld.nl. However, Muller does feel the inaccurate image could have serious implications for the case moving forward.

Samsung and Apple are headed back to court in Germany on August 25 to present their own respective arguments over whether the ban against the Tab should remain in place.

Apple did not immediately respond to a request for comment, while Samsung said it declined to comment at this time.
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Anonymous Hacks BART Over Shooting Protest Shutoff

When the Bay Area Rapid Transit agency turned off cell phone service to disrupt peaceful protests, many were outraged -- including hacker collective Anonymous, who breached BART's Web site and released personal information in protest.

In "OpBART," Anonymous published more than 2,000 user names, passwords, and e-mail addresses that the hacker group had harvested from the "myBARTway" Web site. Among the released information were some telephone numbers and physical addresses of employees and customers.

Anonymous said in a statement "We are releasing the User Info Database of MyBart.gov, to show that BART doesn't give a [expletive] about it's customers and riders and to show that the people will not allow you to kill us and censor us. This is but the one of many actions to come. We apologize to any citizen that has his information published, but you should go to BART and ask them why your information wasn't secure with them."

The disrupted protests concerned the recent slaying of a transient man by BART police in unclear circumstances. BART has claimed that protestors were coordinating movements via mobile devices, and that cutting off wireless service was necessary to ensure the safety of customers during rush hour.

On Jan. 1, 2009, a BART police officer Johannes Mehserle shot Oscar Grant in the back while the unarmed man was lying face-down on the Fruitvale station platform. Mehserle was eventually found guilty of involuntary manslaughter and sentenced to two years. After serving much of his time in a private cell at the Los Angeles County Jail, Mehserle was released on June 13, 2011.

Most recently, BART police officers shot 45-year old Charles Hill in the chest during a confrontation at the Civic Center station, killing him. Unlike the Grant shooting, there exist no clear video records of the shooting; BART police claim that Hill was threatening them with a knife (or two knives, and/ or a bottle) -- while witnesses have stated that "Hill was not running or lunging toward the officers," according to SFWeekly.

BART's actions come soon after UK Prime Minister David Cameron's calls to censor wireless communications following the "BlackBerry Riots" in London, which were also initiated by what some consider to be an unnecessary shooting of a man by police officers.

The Electronic Frontier Foundation, among others, made the connection to the Arab Spring uprisings, stating, "BART officials are showing themselves to be of a mind with the former president of Egypt, Hosni Mubarak, who ordered the shutdown of cell phone service in Tahrir Square in response to peaceful, democratic protests earlier this year...once BART made the service available, cutting it off in order to prevent the organization of a protest constitutes prior restrain on the free speech rights of every person in the station, whether they’re a protestor or a commuter."

James Lee Phillips is a Senior Writer & Research Analyst for IBG.com. With offices in Dallas, Las Vegas, and New York, & London, IBG is quickly becoming the leading expert in Internet Marketing, Local Search, SEO, Website Development and Reputation Management. More information can be found at www.ibg.com. Christina Domecq is a motiva
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North Korea denies South Korean hacking claims

SEOUL, South Korea -- North Korea has denied allegations by South Korea that it engaged in a hacking scheme to steal millions of dollars from online gaming sites.

The North's Committee for Peaceful Unification of the Fatherland said in a statement carried Sunday by the official Korean Central News Agency that the allegations were an unacceptable provocation and were meant to sully North Korea's image overseas.

Last week, South Korean police said they arrested five people who had collaborated with elite North Korean hackers in a ring that pocketed about $6 million over the past year and a half.

South Korean authorities have also accused North Korea of mounting cyberattacks in the past few years. The North has also denied those charges.

Read more: http://www.sacbee.com/2011/08/15/3838996/north-korea-denies-south-korean.html#ixzz1VCS7qV6v

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Apple threatened Intel with 'wake-up call' over chip power consumption

Officials at Apple were at at one point so unsatisfied with power consumption levels of Intel's processors that they threatened to end their partnership with the chipmaker, if the problems were not addressed.

The revelation was shared by Greg Welch, director of Intel's Ultrabook group, with The Wall Street Journal. He said that Apple gave Intel a "real wake-up call" when the Mac maker threatened to end their business relationship.

Apple officials told Intel that the chipmaker needed to "drastically slash its power consumption," or else Apple would turn elsewhere for chips. The threats were said to have helped spur Intel's interest in creating its new Ultrabook specification.

As announced earlier this week, Intel Capital, the strategic investment arm of the world's largest chipmaker, will invest $300 million in a new "Ultrabook fund" to invest in new technologies. Intel is pushing manufacturers to build thin-and-light notebooks that aim to challenge Apple's MacBook Air.

As Intel has pushed to get its Ultrabook specification off the ground, the chipmaker's partners are said to have struggled keeping their ultraportable notebooks under a price of $1,000. Apple's entry-level 11.6-inch MacBook Air sells for $999, and is one of the company's most popular notebooks.

For years, rumors suggested that Apple would transition the iPhone to the Atom architecture, but the change failed to materialize as Intel struggled with managing power consumption. The Atom processor was also said to be utilized in early prototypes of the iPad as far back as 2008.

Unsatisfied with the power consumption levels of Intel's Atom platform, Apple instead turned to ARM for its iPhone and iPad processors. The company also bought ARM design companies PA Semi and Intrinsity, both key acquisitions that allowed Apple to create the custom A4 processor found in the iPhone 4 and first-generation iPad, as well as the dual-core A5 processor found in the iPad 2.

As for its Mac lineup, as recently as 2010 there were indications that Apple and Intel's rival AMD were engaged in initial discussions about the possibility of Apple adopting AMD chips. More recently, there has even been speculation that Apple could merge iOS with Mac OS X with Macs based on an anticipated A6 processor starting in 2012.
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Vodafone suspends sales of blocked Galaxy Tab 10.1

Vodafone, the telecoms giant, has suspended pre-orders of the tablet computer after the Regional Court of Dusseldorf issued a temporary ban on any sales or marketing of the device in every country bar the Netherlands.

The court made its ruling on the basis that the Galaxy Tab 10.1 infringed Apple's intellectual property by copying elements of the iPad 2.

Vodafone has already begun contacting customers who have placed orders for the device and giving them the opportunity to cancel, amid expectations that the preliminary injunction will be made permanent across most of Europe.

A spokesman said: "We are aware of legal proceedings [and] we're in discussions with Samsung about the position in the UK. In the meantime, we will be suspending pre-orders."

O2 has also said it will not supply the tablet to customers, although it put this down to Samsung's inability to supply the device rather than it cancelling orders.
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