Analyst Florian Mueller writes at Fosspatents that, absent a settlement, Google could wind up paying more for a Java license relating to Android than it did for Motorola Mobility (MMI), the mobile phone maker.
Google paid $12.5 billion for Motorola, a price some analysts considered high, while Oracle's quarterly revenues are running in the range of $8-10 billion.
Oracle has made both patent and copyright claims against Google, and Mueller considers the case strong. He also writes that damages are not Oracle's primary goal. Instead he sees the company aiming for an injunction that would halt all Android phone sales in the U.S.
All this is possible because of slow changes in the law, allowing the patenting of software, since 1998. The impact of the changes remains controversial, illustrated by the quick push-back against a Boston University study estimating “patent trolls” (non-operating companies created to pursue patent claims) cost the economy $80 billion a year in lost equity value, with that number rising sharply in the last four years.
What's clear is that both operating companies like Oracle and non-operating companies (the so-called “trolls”) are transforming the nature of technology competition in courts (click here). And this is a global phenomenon, as illustrated by the fact that Samsung (SSNLY.PK) has been prohibited from selling its Galaxy Tab tablet in Germany because of infringement claims made by Apple (AAPL).
Investors need to take note. Few think that the patent reform known as the America Invents Act is going to really restrict patent trolling, as it mainly covered issues about the filing and handling of patent disputes, not what can be patented.
So long as software can be patented, and such patents can't be invented around, the cost to technology of software patent litigation will only grow. The beneficiaries will be companies, like Oracle, that are most aggressive in court.