There's an interesting new theory worth sharing regarding the new Moto X Phone. According to some industry analysts, there is a better and craftier reason the Moto X is being assembled in the United States as opposed to overseas. It is because Google & Motorola want to avoid any patent fights at the ITC. Here's the explanation:
In case you have been living under a rock, one of the big ongoing events over the past few years is the massive patent war raging across the mobile landscape. Microsoft has been happily profiting from Android licensing deals for many of its patents, while Apple has been suing everyone under the sun who tries to make an Android phone. Of course, a war can't be waged by one side, and several other companies have been fighting back, with Samsung doing most of the fighting against Apple.
There are two ways in which these companies have been duking it out over patents. One is the long and expensive way, which is suing in the Federal court system. Apple "won" the largest of these battles with their $1 Billion U.S. verdict earlier. However, because it is being dragged out in the appeals process, it has been far more expensive and time-consuming than useful.
The other way the companies have been fighting is faster and cheaper. This is by suing for import bans through the U.S. International Trade Commission. Import bans usually have a much more dramatic effect and put more pressure on the infringing company to find a way to work around the infringement. If it can't, then it must stop selling the product there altogether which is obviously the worse case scenario.
It should be noted that even when this is successful, it doesn't always work out for the "winner." The most recent example of this happened over the weekend. President Obama stepped in and overturned the ITC's most recent import ban on Apple's products which was won by Samsung. Most of the industry analysts are suggesting this was done because the patents in question were more than likely part of an essential international standard and should be considered FRAND (fair, reasonable and nondiscriminatory). While it is debatable whether the President should or should not have done this, in this instance, it was overturned, but that is actually a very rare occurrence. Furthermore, if the patent in question is not a FRAND patent, then all bets are off and the infringement would cause the import ban of a product to stay in place. Thus, an ITC import ban can spell doom for a product.
This is where Motorola and Google were thinking several moves ahead of their opponents. By having the Moto X built almost 100% in the United States (some of the parts are imported), they can control the entire process of building and installing software on the device right in the USA. Because of this, there is no way for the ITC to step in and issue an import ban, because nothing infringing was imported. This forces the hand of anyone who wants to sue Motorola for any patents which the Moto X "might" infringe. It means they don't have the faster and cheaper option of fighting using the ITC, but must instead take the longer and more expensive method of suing in Federal court.
If this theory is true, this was hardly the only reason Googorola chose to manufacturer the Moto X in the USA, but its subtle cleverness should not be overlooked. The other two obvious reasons to make the Moto X in the USA are marketing and logistical reasons. "Made in the USA" is a great marketing angle. Also, it is probably harder to organize the Moto Maker customizations from an overseas location. Still, this potential third reason shows that Google & Motorola are master chess players and know how to plan ahead. Do you think this was a conscious decision by Googorola execs, or was it a happy coincidence?
Source: MotoXForums via Forbes
