By Ryan Knutson And Angela Chen
Google Inc. and Verizon Communications Inc. struck a long-term
patent cross-license agreement to reduce the risk of future patent
lawsuits, the latest in a string of deals that signal a slowdown
after years of aggressive patent wars.
The deal effectively bars the companies from suing each other
over any of the thousands of patents the companies currently own or
acquire in the next five years. It also protects the companies if
either sells a patent to another company, and that company attempts
a lawsuit.
"This cross license allows both companies to focus on delivering
great products and services to consumers around the world," said
Kirk Dailey, Google's head of patent transactions.
The Web-search company, which had troubles with patent
litigation in the past, has also reached far-reaching patent
cross-licensing agreements this year with both Samsung Electronics
Co., Cisco Systems Inc. and LG Electronics Inc.
Google has also lobbied hard for patent overhaul in Washington
to limit so-called patent trolls from amassing large pools of
intellectual property and suing or threatening to sue other
operating companies for infringing. Michelle Lee, a former patent
lawyer at Google, became director of the U.S. government's Patent
and Trademark Office in October.
Google and Verizon worked on the deal for about a year. Both
companies said they are looking to strike deals with other tech
companies. Google said it is in talks with other network providers.
The companies declined to say whether any monetary payments were
involved in the deal.
Technology companies have become used to patent litigation in
recent years. The biggest players have sued and countersued in the
U.S. and elsewhere, accusing each other of stealing their
inventions.
Facing patent lawsuits for many of its services, including its
Android mobile-device operating system, Google responded by
purchasing a large number of patents for itself, including some
patents from International Business Machines Corp. in 2011. It also
acquired Motorola Mobility in 2012 and then sold it to Lenovo Group
Inc. earlier this year while keeping Motorola's patents.
Meanwhile, in May, Google and Apple Inc. agreed to drop all
lawsuits between them, including one that covers Apple's patent
litigation with Google's Motorola unit. Motorola sued Apple for
patent infringement in 2010, and Apple had countersued.
While the agreement doesn't technically give the companies
access to each other's patents, it does give them more comfort to
innovate in those areas without the fear of litigation. The deal is
part of a larger initiative inside Google to "provide freedom of
action so engineers can produce," said Google's Mr. Daily.
Randal Milch, Verizon's general counsel, said the deal will help
reduce the supply of patents available to trolls to use in
lawsuits. "In high-tech industries like ours, the patent system can
be exploited to get in the way of innovation," he said.
Verizon and Google have a long history of working together. The
companies worked closely to popularize Android as a counter to
Apple's iPhone. Google and Verizon also teamed up in 2010 to
propose an alternative net neutrality plan to what the Federal
Communications Commission was working on. The plan was never
adopted.
Alistair Barr and
Rolfe Winkler
contributed to this article.
Write to Ryan Knutson at ryan.knutson@wsj.com and Angela Chen at
angela.chen@dowjones.com
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