Summary
Google and Verizon have established a patent licensing agreement that prohibits both companies from filing lawsuits against each other for patent infringements over existing and future patents for the next five years. This agreement is a strategic move by Google to protect its interests, especially following its entry into the ISP sector with Google Fiber. For Verizon, the agreement offers protection in the targeted advertising domain and shields it from potential innovation tax imposed by patent trolls. Both companies highlight that the arrangement will help reduce frivolous patent litigation and promote the development of new products and services. The long-term benefit for both parties lies in the mutual protection from patent abuse.
Overview
Google has entered into a patent cross-licensing agreement with Verizon, following similar agreements with Cisco, Samsung, and LG. The agreement will not grant either party access to the other’s patents, but will prohibit both parties from filing lawsuits against each other over patent infringements of existing patents as well as patents obtained over the next five years, covering a wide range of products and technologies.
Strategic Rationale
Google’s motivation for the agreement may relate to its Google Fiber initiative, given its expansion into the Internet Service Provider (ISP) domain. Google plans to launch Google Fiber into 34 cities, none of which are Verizon FiOS markets. Were Google to launch as an ISP across all 34 markets, it would face competition from major ISPs including AT&T, Comcast, Cox Communications, and Time Warner Cable, but not from Verizon.
Verizon, on the other hand, is understood to be seeking protection for its targeted advertising business through the arrangement. Kirk Dailey, Head of Patent Transactions at Google, commented on the agreement: “This cross licence (agreement) allows both companies to focus on delivering great products and services to consumers around the world.” He added: “We’re pleased to enter into this agreement with an industry leader like Verizon, and we welcome discussions with any company interested in a similar arrangement.”
Implications for Patent Litigation
In a published statement, Verizon described the agreement as a pact that will reduce the number of patents exposed to frivolous patent litigation. Verizon also noted that the cross-licensing arrangement would provide protection against the “innovation tax” often collected by patent trolls.
In 2013, over 6,000 lawsuits were filed, a majority by patent trolls. The immediate effects of the Google-Verizon agreement may not be visible in the short term, but both parties stand to benefit from the arrangement in the long run as protection against patent abuse.
Disclaimer
This article is for general information and does not constitute legal advice. Readers should consult a qualified attorney before acting on any matter discussed here.