Eric Schmidt, Google’s executive chairman, gave his take on the company’s Motorola acquisition — and the state of the U.S. patent system — as part of his appearance on stage at Salesforce.com’s Dreamforce conference in San Francisco this afternoon. Questioned by by Salesforce CEO Marc Benioff, Schmidt said Google’s proposed $12.5 billion Motorola acquisition isn’t just about getting the mobile company’s defensive patent trove.
“Having at least one area where we can do integrated hardware and software and learn from that probably produces better products,” Schmidt said, via webcast.
He continued with a lengthy assessment of the state of the U.S. patent system, including the purchase of Nortel Networks’ patents by a consortium that includes Microsoft and Apple, both of which are challenging Google’s Android mobile OS over patents in court.
Patent issues are terrible. It looks like, in the 1990s and early 2000, there were a lot of software patents that were issued that were very broad, and the industry is now spending a lot of time invalidating previous patents. After a consortium went after the Northern Telecom patents — and I think they were going to go for, everybody thought, about $1 billion and they went for $4.5 billion, we dropped out after a while because it got to pricey — all of a sudden the value of all these questionable patents just went up and up and up.
I of course suggested that the correct way to solve the patent problem was to take all the patents as they’re published and crowdsource them. In other words, say here’s a proposal for a patent. Would everybody comment and see if there’s any prior art. Because these poor people in the patent office are overburdened. THe only problem with my proposal is it’s illegal. The way the patent system works precisely does not allow for that kind of disclosure. So there is legislation that’s in the Senate which we hope will pass this year, which will both fund the patent office more and give them the rights to kick out a lot of these patents earlier.
We were fortunate as a software industry that it was not an industry that was defined by patents. It was defined by creativity. With these new patent fights that are coming, I’m worried that these overbroad patents will somehow slow it down. I want to be clear here — a company like Google has the money to go and fight these wars. We have very smart patent attorneys. By the way, you all may not know that essentially all the patent fights that are interesting are done in one district, the East District Court of Texas. How this is possible is beyond me. But again, it doesn’t feel quite right. Patents are important, but let’s do them in a way that’s systematic.