Google Inc. (GOOG): Current U.S. Patent System Broken

Google Inc. (NASDAQ:GOOG) has been involved in quite a share of recent patent-infringement lawsuits in recent years. And as the company has won some and lost some, are current statements by executives of the company a signal that the company wants to take its ball and go home, or is there a legitimate problem with the intellectual-property system in the United States?

Sergey Brin

The recent comments, from Google Inc. (NASDAQ:GOOG) public policy director Pablo Chavez, suggest that Google – which was underformed in its patent portfolio (compared to similar tech companies based on age) prior to its acquisition of Motorola Mobility this past spring – is making the stand that the entire patent system is actually dragging on innovation rather than enhancing it. He said at a recent technology conference, “One thing that we are very seriously taking a look at is the question of software patents, and whether in fact the patent system as it currently exists is the right system to incent innovation and really promote consumer-friendly policies. We think that these patent wars are not helpful to consumers. They’re not helpful to the marketplace. They’re not helpful to innovation.”

Google Inc. (NASDAQ:GOOG) executives have let it be known in recent days and weeks that the company is getting frustrated with the constant merry-go-round of legal suits regarding patents – many of which, the company contends are too abstract and thus hard to fight and harder to claim on their own. Under the current system, patents are active for 20 years, but Google is lobbying to have that reduced, and is lobbying hard for large financial penalties for “patent trolls” who lose lawsuits – in the hopes of mitigating the number of lawsuits that are fought in court if there is a disincentive to file without a truly legitimate claim.

These comments were revealed against a backdrop of Google Inc. (NASDAQ:GOOG) winning a patent  case against Oracle Corporation (NASDAQ:ORCL) months ago, yet not complying with an order from the judge in the case to disclose a list of all paid commentators on the case while it was at trial. So even when Google wins, it has lost – at least in the court of public opinion. The judge is giving Google until Friday to produce the list – even of those commentators who were directly paid by the company but still provided commentary about the issues in the case, which surrounded the Android operating system and Java computer language.