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Google, Cisco Strike Cross-Licensing Patent Deal

Google, Cisco Strike Cross-Licensing Patent Deal
February 4, 2014 11:07AM

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The patent agreement between Google and Cisco is in the best interest of both companies, especially considering the rising number of patent disputes in recent years. By Google and Cisco signing this deal, they avoid a lot of the issues that can come up with patent disputes that could slow both companies down, said analyst Zeus Kerravala.

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Patent agreements are one of the big story lines of the fledgling year. First it was Google and Samsung. Then it was Twitter and IBM. Now, Google is back in headlines with a long-term patent cross-licensing agreement with Cisco that covers a “broad range of products and technologies.”

"Our agreement with Cisco will reduce the potential for litigation, letting us focus instead on building great new products," said Allen Lo, Google's Deputy General Counsel for Patents. "We're pleased to enter into this cross-license, and we welcome discussions with any company interested in a similar arrangement."

Seeking Patent Reform

The agreement allows each company to extract significant value from its patent portfolio through a license to the other's portfolio and by helping to reduce the risk of future litigation. Cisco and Google agree that the deal stands in direct contrast to actions such as patent privateering -- or the transfer of patents to patent assertion entities -- that harm consumers.

"In today's overly-litigious environment, cross-licensing is an effective way for technology companies to work together and help prevent unnecessary patent lawsuits," said Dan Lang, Cisco's vice president of Intellectual Property. "This agreement is an important step in promoting innovation and assuring freedom of operation."

Both Cisco and Google are members of the Coalition for Patent Fairness, a leading advocacy group for patent reform. In addition, Cisco General Counsel Mark Chandler recently reiterated a pledge not to sell patents to patent assertion entities in order to help encourage innovation rather than litigation.

A Win-Win

We caught up with Zeus Kerravala, principal analyst at ZK Research, to get his take on the patent deal. He told us the agreement is in the best interest of both companies, especially considering the rising number of patent disputes in recent years.

“This industry we live in now, particularly on the mobile side, is evolving faster than ever before. For companies like Cisco and Google and the rest of that ecosystem, it’s critical to be able to push innovation out the door as fast as possible. Even a small delay can mean the difference between being a market leader and a market laggard,” Kerravala said.

“By Google and Cisco signing this deal they set themselves up for some strong partnerships and also avoid a lot of the issues that can come up with patent disputes that could slow both companies down. They’ve agreed to agree. Whatever comes up from here they will work out and not have to worry about patent disputes.”

Google and Samsung struck a similar deal in late January. The companies described their patent alliance as a “mutually beneficial agreement” that covers both companies' existing patents as well as those filed over the next 10 years. With this agreement, Samsung and Google gain access to each other’s patent portfolios. That opens opportunities for deeper collaboration on research and development of current and future products and technologies.

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