8/15/14
Law 308
Business Analysis
Google has quickly become one of the largest corporations in the world. Since it was
founded in 1998 (Company, n.d), they have been leaders not only in technological advancement,
but in the financial world as well. They currently rank 46th on the Fortune 500 list (n.d.), and
earned over $59 billion in revenue in 2013 according to their 2014 annual report. Their 2014
annual report also shows that their net income has increased over 32% in the last two years and
have net assets of over $89 billion.
With all of Google’s success hasn’t come without their involvement with the law.
Whether it comes from where they incorporated, when they took their company public, patent
lawsuits, antitrust lawsuits, issuance of certain class of stocks, international legislature, and
more, Google always has to consider the law when doing operating their business.
Patents
Google is one of many companies fighting lawsuits against patent trolls according to a
report published by Reuters. Patent trolls is defined in Business Law and the Legal Environment
6e (Standard Edition) as “Someone who buys a portfolio of patents for the purpose of making
patent infringement claims.” A study done by Boston Universities show that patent trolls cost
companies around $80 billion a year. According to RPX research, a leading provider of patent
risk management solutions, lawsuits stemming from patent trolls “over the past five years
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increased nearly 600%, from approximately 600 in 2008 to more than 3,600 in 2013, impacting
approximately 8,000 companies in the same period.”
In an effort to fight and bring down costs related to patent trolls, Google joined together
with SAP, Newegg, Dropbox, Canon, and Asana to form the License on Transfer Network, or
LOT. According to the network’s official website, the LOT network is “…a cooperative patent-
licensing agreement that will cut down on patent troll litigation and the growing practice of
patent privateering.” The LOT network will work as a cross-license royalty-free agreement that
will collect patents together in a group. According to the LOT network’s official site, “Member
companies receive a license when the patents are transferred out of the LOT group. That means
that companies retain their right to enforce a patent so long as they retain ownership of it.
However, as soon as it is sold, a license to the other members becomes effective, protecting them
from attacks by the troll to which the patent was sold.”
In another effort to fight patent trolls, Google was one of about 400 companies that
signed a letter addressed to Congress back in April urging them to pass legislation regarding the
matter. “Patents are bedrock to the American innovation economy, but when they are used by
patent trolls to extort American businesses, Congressional action is unquestionably necessary,”
said the letter. Unfortunately for Google and the rest of the companies, a news report published
by Infoworld stated that passing any legislation regarding the matter may be dead until 2015 due
to a lack of consensus.
Patent trolls are not the only patent litigation Google has dealt with. Back in May,
Google and Apple settled one of the biggest lawsuits in technology according to a news report
published by Reuters. Companies that make phones using Google’s Android software and Apple
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have been filing lawsuits against each other with the intent of protecting their technology. Both
sides were able to reach a settlement in an effort to spur patent reform.
Google has recently purchased communication technology patents from Taiwan-based
company, Foxconn, in order strengthen their patent portfolio according to the Wall Street Journal.
Foxconn has recently been in the news for their harsh labor practices.
Labor
Google and others in the technology industry have been in the news regarding their labor
hiring practices. A report published back in 2010 by the United States Department of Justice
detailed a case in which Google, Adobe, Apple, Intel, Intuit, and Pixar entered into a “no-
poaching” agreement, where the companies would not try to solicit employees from other
companies in the group in order to keep their employees’ pay down.
The giants in the technological industry failed to remember that all e-mails are
