There's a legal war on in the smartphone industry. Everybody is suing everybody else for patent infringement. The patent war is a key reason Google is buying Motorola for $12.5 billion: Motorola has some 17,000 patents that will belong to Google when the deal goes through.

This graphic from Reuters shows how many lawsuits are flying back and forth. The key for Google is not Google itself, but rather all the hardware makers that build smartphones and tablets that run Android, Google's mobile operating system. Those companies are the ones with green dots next to their names.

For more on why programmers don't like software patents, and why patents may be hindering innovation in the industry, see our story "When Patents Attack."

Hat tip: Gizmodo via @abwardlaw

When the government says the the nation added 117,000 jobs last month, or the economy grew at an annual rate of 1.3 percent last quarter, it doesn't mean that the nation actually added that many jobs, or that the economy actually grew at that rate. It means those are the best estimates from the people who are trying to figure out what's really going on.

The thing is, those estimates are often off by a wide margin. We know this because the people who are trying to figure out what's really going on revise their estimates as more data come in. The later revisions, based on more and better data, are closer to what actually happened than the initial estimates.

We were reminded of this uncertainty by the recent massive revision in economic growth numbers, which showed the U.S. economy grew much more slowly than was previously thought in the first quarter of this year.

This morning's New York Times has a useful explainer on that revision — and a broader look at estimates of economic growth. Here's the key big-picture paragraph:

 

The growth rate that the government announces roughly one month after the end of each quarter ... has been off the mark over the period from 1983 to 2009 by an average of 1.3 percentage points, compared with more fully analyzed figures released years later, according to federal data.

That 1.3 percentage points is a big deal, given that economic growth is typically around 3 percent per year.

The NYT piece also has a detailed look at why the first-quarter estimate was so far off. Quick summary:

The answer in this case is surprisingly simple: the Bureau of Economic Analysis, charged with crunching the numbers, concluded that it had underestimated the value of vehicles sitting at dealerships and the nation's spending on imported oil.

We, like lots of journalists, economists and investors, pay close attention to a handful of these key indicators, including economic growth. It's worth paying more attention to the revisions — and keeping in mind that the initial estimates may be way off.

For years, Estonia played by the rules and did everything exactly the way it was supposed to. It made cut after cut and, just a few months ago, the country finally got what it wanted: It joined euro.

Despite the euro's troubles, Estonia's still doing well. It has the highest growth rate and the lowest public debt of any EU country.

On today's podcast, we talk to Estonia's president.

Subscribe to the podcast. Music: Ott Lepland's "Läbi öise Tallinna." Find us: Twitter/ Facebook. Note: This podcast originally aired in January, 2011.

The conference for the best hackers in the free world is held every year in Las Vegas. It's called DefCon. The entrance fee is $150, cash only. (And it's a bad idea to use the ATM at a hacker conference.)

There are lots of hacking competitions at DefCon, most of which are complicated and technical. But one contest is very simple.

Hackers call up a corporation and try to persuade the person who answers the phone to give them sensitive information. The technique is called social engineering, and it's been a key element of some recent high-profile hacks.

 

At the competition, contestants sit in a glass phone booth and call unsuspecting corporations. Their conversations are played on a P.A. system for dozens of spectators.

A guy named Mark is up next. He calls Wal-Mart and says he's in the company's I.T. department.

Each contestant has 25 minutes in the glass booth. There's a checklist of information they're supposed to get: What time the company's packages are delivered, what kind of anti-virus software they use, whether the company uses the most up-to-date operating system.

Mark is only 18 years old. It's his first time competing here. But he actually gets a few key pieces of information. (Wal-Mart declined to comment for this story.)

The audience at the contest — as at many DefCon competitions — isn't just hackers. Also in attendance: Security companies that corporations hire to defend themselves.

And a couple seconds after Mark leaves the booth, he gets a job offer from a security company.

Strong economic growth takes the sting out of debt. When a nation's income increases, tax revenues go up. Existing debts become more manageable.

By the same token, when economic growth stalls, debt problems become tougher to solve.

So this morning's news out of Europe is cause for concern: Overall, the EU economy grew by just 0.2 percent between the first and second quarter of this year, officials reported.

 

The German economy — the export powerhouse, the core of the core of Europe, the economy on whose future Europe depends — grew by 0.1 percent. The French economy, the continent's second-biggest, didn't grow at all in the second quarter. Growth in other countries was slightly higher, but still weak.

In the coming months, Germany and France are likely to be pulled more deeply into supporting the weaker economies on Europe's periphery. There's been talk recently of issuing eurobonds, which would put Germany and France on the hook for the debts of other EU countries.

Angela Merkel and Nicolas Sarkozy are meeting today to discuss Europe's debt troubles. Officials have said eurobonds aren't on the agenda — not surprising, given significant political opposition in Germany to further bailouts.

But more bailouts will almost certainly be needed. The stalling economy in the core of Europe is likely to make that opposition more intense, and make future bailouts more economically painful.

But Kanye West and Jay-Z managed to keep Watch the Throne under wraps until its release date last week.

Billboard reports:

Tracks were saved directly to password-protected external hard drives that remained locked in [the engineer's] Pelican briefcase. At no point during the album's creation did works-in-progress reside on laptop hard drive. ...

Outside producers for the project, such as Q-Tip, the RZA, the Neptunes, Swizz Beatz, Hit-Boy and No I.D., were asked to appear in person to preview and submit potential beats. Email wasn't an option to send mixes; when West wanted to hear a track, he would demand that producers travel to his location to work on a track.

For more on the work of art in the age of electronic reproduction, see our story "How Much Does It Cost To Make A Hit Song?"

Google just dropped $12.5 billion to buy Motorola Mobility, the mobile phone company. It's Google's biggest acquisition ever, by far. It's a big push into the hardware business.

And, perhaps most importantly, it's huge play in the patent arms race that's engulfing the smartphone industry, where Google's Android is one of the leading operating systems.

In other words: Google is buying Motorola in large part because it wants the company's 17,000 patents.

 

Accusations of patent infringement have been flying back and forth in the smartphone business lately, with everyone suing everyone else. Companies have been buying up patents to defend themselves.

Here's how we described it in our recent story, When Patents Attack:

All the big tech companies have started amassing troves of software patents — not to build anything, but to defend themselves. If a company's patent horde is big enough, it can essentially say to the world, "If you try to sue me with your patents, I'll sue you with mine."

It's mutually assured destruction.

The arms race has radically escalated in just the past few months.

In April, Google announced its bid on the patent portfolio of Nortel, a defunct tech company. Google said it wants the patents to defend itself against lawsuits.

But Google — which was willing to pay more than $3 billion — got outbid by a consortium of tech giants, including Apple and Microsoft, which paid $4.5 billion.

A few weeks later, news emerged that Google had bought over 1,000 patents from IBM for an undisclosed price.

Less than a month ago, Carl Icahn, a big Motorola shareholder, pushed the company to sell off its patent portfolio. He mentioned the Nortel patent sale and the "current heightened market demand for intellectual property in the mobile telecommunications industry."

A few weeks ago, Google described "a hostile, organized campaign against Android ... waged through bogus patents."

And in a blog post this morning, Google CEO Larry Page wrote:

Our acquisition of Motorola will increase competition by strengthening Google's patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.

Google is buying these patents, in large part, to defend itself against lawsuits. This is a legal expense — it's money that the company is not putting into developing new products or hiring new workers.

The big tech companies have huge cash piles and can afford to fight this patent war. The likely casualties, as we've noted before, are the young startups that may get sued out of existence before they have a chance to become the next Google, or the next Apple.

Every day, all around the world, people do business in U.S. dollars — even when their business has nothing to do with the U.S.

The dollar is the international language of money. It's essential for global trade.

This provides huge benefits for the United States. U.S. businesses can trade in their own currency. Our government can borrow money more cheaply. Mortgages and student loans are cheaper, too.

For the moment, the dollar's dominance seems secure. Safe-haven currencies like the Swiss franc are too small to replace the dollar. And bigger currencies like the euro and the Chinese renminbi have problems of their own.

On today's show, we hear about how people use the U.S. dollar Brazil and South Africa. And we talk to an economist who says the dollar's days as the world's lone reserve currency may be numbered.

Subscribe to the podcast. Music: Foster The People's "Life On The Nickel" Find us: Twitter/ Facebook.