The Moment We've All Been Waiting for: Apple vs. Google

Once allies, now enemies, Google and Apple are finally confronting one another in court. That result has come about via this week's approval of Google's $12.5 billion acquisition of Motorola Mobility, which happened yesterday. Both the European Commission and the US Justice Department gave their OKs (with some caveats and reservations) to Google to acquire the struggling hardware maker.

Google partly bought Motorola Mobility for its patent portfolio and partly to own a hardware company that would allow it do develop a range of new products and user experiences.

Motorola, prior to the approvals, had won a couple of patent victories in Germany against Apple. Subsequently Motorola demanded just over 2% of Apple's sales in exchange for licensing several "essential" mobile patents. As a practical matter that would mean turning over billions to Motorola -- now Google (Steve Jobs is rolling in his grave). Apple rejected that demand. 

Apple recently filed suit against Motorola in the US with an eye toward the German litigation:

Apple sued Motorola Mobility in a U.S. court on Friday in an attempt to stop Motorola from asserting some patent claims against Apple in Germany, according to the lawsuit.

The suit, filed in a San Diego federal court, argues that Motorola's German lawsuit against Apple breaches terms of a patent licensing agreement between Motorola and Qualcomm . . .

In the latest lawsuit, Apple says that as a Qualcomm customer, Apple is a third-party beneficiary of Motorola's agreement with Qualcomm. Under that agreement, Motorola's rights under certain patents are exhausted, Apple argues.

Samsung had been Apple's chief proxy for Android/Google but now Apple gets to slug it out with Google directly.

It's an understatement to say that the entire mobile patent litigation situation is "out of control." Perhaps the direct confrontation between Google and Apple will accelerate some sort of broader settlement so that everybody can move on.

The problem is that firms not directly making money from device sales are using IP litigation and licensing as an alternative way to generate revenue. So far this has proven quite successful for Microsoft, which makes considerable money off of Android sales even as its smartphone share continues to decline.