Wednesday, August 17, 2011

A Lot of Zeros for Patents

$12,500,000,000. That’s a lot of zeros to pay for intellectual property (IP). But that was the price Google paid for Motorola Mobility and, mostly, for their patent portfolio.

In light of the Google/Motorola deal, it bears repeating that investors and companies in the market for acquisitions often look for some combination in their targets of a good idea, a good management team, a developing (or complementary) market, and the existence or creation of entry barriers (e.g., intellectual property). Typically, it takes a measure of all four elements for a start-up or other small or mid-sized business to get on the radar screen of an angel investor or venture capitalist (much more, one of the Fortune 500 companies).

Without passing judgment on them, and as with any M&A activity, I would be willing to bet that not much of the target’s (Motorola) management team will be around in the new Google in one year. For their part, Google claims that Motorola cell phones and other mobile products will remain on the market. Of course, whether you believe that a software company will plunge deep into the hardware market is another matter. That leaves only Motorola’s IP on the table for the apparent reason for the deal.

Thus the Motorola deal shows, with its focus on Motorola’s patents, that an IP portfolio (in its own right) can make or break a deal. The news of the Motorola deal should therefore prompt entrepreneurs throughout Austin (and those throughout Texas and elsewhere) to assess their IP portfolios.

If you would like experienced help with your IP assessment and subsequent IP strategizing, we at the Villhard Patent Group would enjoy helping you. For more information about intellectual property in general, and patents in particular, please contact us at (512) 897-0399 or visit

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