A monopoly can be defined as a market in which there is only one buyer. In the final section of intermediate microeconomics we have been discussing the impact that monopolies have on the competitive market. We have looked at how monopolies are able to charge a higher price for the products and services because they are the only seller in the market. One of the main goals of every company is to continue to gain market share over their competitors in order to increase shareholder profits and establish a solid foundation for a successful future. Firms that have established monopolies have a significant advantage to any company that tries to enter their market. Often times the cost of entering such markets blocks almost any firm from trying. As we will see, sometimes companies use patents as a way to block competitors from gaining market share. In an April 11, 2011 article written by John Scheller and Keneth Albridge III titled “The Patent Monopoly – more than a right to exclude,” they discussed how Google is using recently acquired patents in order to block competitors in the emerging cell phone technology market. The article says that many entrepreneurs often associate the value of patent rights with the ability to protect the patent owners position in a given market. They do this by demanding royalty payments from competitors or excluding them from the market altogether. Patents can also create value for firms by opening doors to other markets. Google recently acquired a family of Nortel patents for $900 million. Google has been attempting for several years to break into the mobile telecom market. This market is a highly contested and patent cluttered market that makes entry even for powerhouse companies like Google a difficult task. Barriers from entry have included receiving end of patent infringement lawsuits or paying enormous royalties to use a competitor’s patented technology. However, Google has found that whole patent rights may act as a barrier, once they are acquired; they hold a certain level of freedom to move within the market. In a blog post on April 4, 2011 regarding the acquisition of the Nortel patents, Google explained: “one of a company’s best defenses against . . . litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services.” The group of patents received by the purchase of Nortel allows Google to create long term financial stability. Holding these patents provides Google with more than the ability to demand royalties from competitors. They allow Google to gain a broad influence in the mobile telecom market. They allow Google substantial freedom to develop new products and services in the patent cluttered mobile telecom market. Something Google would otherwise be unable to do without the threat to lawsuits and litigation. This acquisition demonstrates that patent rights often have value beyond the ability to protect the patent owner’s position in a competitive market. For new firms entering existing markets that are highly competitive, it is important to keep in mind both the potential offensive and defensive uses of patents.