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I'm sure there are plenty of patent trolls that have patents that Oracle's violating. Can Google pay one of them to act as their mercenary army, having them counter-sue Oracle?
I remember this was not considered ok when MS allegedly did it with SCO... Or do morals change depending on who has what stakes in the fight?
I didn't have a problem with ms using sco to sue for them. I had a problem with ms using patent lawsuits to attempt to crush the competition. Suing in self-defense is a different matter.
When Palm was up for sale I did wonder why Google didn't value it very highly just to acquire their patent portfolio.
I wondered the same thing at the time. Google needs to start tackling the patent system head-on. They dabbled a little bit in the Bilski case but I think it would be a more valuable use of their energy than the ill-considered h264 battle.

I wonder how much assistance the $100 million they spent on On2 could have provided to the patent reform movement?

I agree in general that Palm was grossly undervalued. But I also think the author is overvaluing patents. Microsoft, who supposedly dwarfs Google and Apple in patents, still struggles to profit from those ideas. And IBM, whose patent portfolio dwarfs them all, also has a smaller market cap than Apple, Google, or Microsoft.

Google might not have a quantity of patents, but it seems to have enough quality patents to sit quite comfortably.

It seems there isn't any scale at which you can safely innovate without running up against software patents.
I'm no lawyer, but the tinkerer in me thinks that this is why we can't have nice things.
I find it stunning and appalling that there is no consideration of the merits of suit and the patents in this discussion.

It's just "you don't have enough patents, you lose"...

Unfortunately innovation as measured by patents, is measured more easily on the scale of quantity than quality. Today, patents are more like trapdoors -- the more of them you have, the higher the chance that your 'enemy' would fall into one. And this is where you let your sharks loose.
While Google is the principal developer for Android it would be totally grand to see an army of joint Android hardware makers unite and sue Oracle collectively for infringing their patents. And offer a settlement in the form that Oracle gives up all Android patent claims. They would certainly have the incentive and capability to do that, and it would probably make much economic sense should the Android situation turn sour.

On a sidenote: it seems that bullying and dominance is an inseparable human trait. We came up with the patent system to give power to the little man so that big bullies can't take his invention away. Then the patent system ends up the same: the bullies that are big can dominate over smaller players. Then there are even bigger bullies like IBM who have a massive patent portfolio. They could pull a stunt by simply asking Oracle to step off or find that they're infringing numerous IBM's patents. While IBM are not directly related to Android they do have some track record in the open source world; they're part of Open Invention Network, too.

"and sue Oracle collectively for infringing their patents."

What patents is Oracle infringing on?

Doesn't matter. Patent infringement cases are decided by twelve undereducated Texans based on whose lawyer looks better in a five thousand dollar suit.
Google's exactly the company I'd expect to follow a policy of saying "Don't sue us or we will invalidate your portfolio." I'd be more than a little confident that they could do it, too.

Sure, it's more expensive than a licensing deal, but it's also a much bigger stick than a cross-licensable portfolio - disproportionately so, in my opinion.

Do you know how one would go about this? Can Google actively invalidate patents which they are not being accused of infringing?
No. But they can go after every patent is raised against them.

This is the primary reason patents are mostly talk -- sure, MS can claim that Linux infringes a hundred of their patents. It probably infringes some of those, and some of the ones it infringes are probably even valid. But actually testing it in court would put the patent portfolio at risk -- and at least for now, they have valued not putting their patents at risk more than they have valued attacking their competitors.

My secret hope is that Google is letting themselves be martyred before they launch a crusade against the entire patent system. If they let consumers feel the impact of litigation, they might build some public awareness of the problem.
Google does seem to do a lot of research and publishes lots of projects, I'm curious if this serves as a sort of portfolio of prior art.