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Google Buys Nortel's Patents for $900 Million

By - Source: Nortel | B 23 comments

Google may have simple been tired of lawsuits that are being filed against it. Fortunately, the company is sitting on a pile of cash to deal with this problem: It simply buys patents.

Nortel said that it has agreed to transfer its remaining 6000 patents to Google for $900 million in cash. According to the company, the patents cover "wireless, wireless 4G, data networking, optical, voice, internet, service provider, semiconductors and other patent portfolios. The extensive patent portfolio touches nearly every aspect of telecommunications and additional markets as well, including Internet search and social networking."

Google's announcement did not reflect the excitement at Nortel, but indicated that it was a required purchase to protect its innovations. From the blog post:

"The patent system should reward those who create the most useful innovations for society, not those who stake bogus claims or file dubious lawsuits. It's for these reasons that Google has long argued in favor of real patent reform, which we believe will benefit users and the U.S. economy as a whole."

[…]

"So after a lot of thought, we’ve decided to bid for Nortel’s patent portfolio in the company’s bankruptcy auction."

It clearly wasn't something Google was eager to do from the very beginning, but given its disadvantage of being a relatively young company that is exposed to lawsuits and potentially bogus lawsuits, a patent portfolio is a requirement. I doubt this was the last patent purchase at Google.

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  • 0 Hide
    milktea , April 4, 2011 9:16 PM
    Now with all these network tech patents, Google cannot be touched by others. In fact, they even have the power to reverse suit others who even gets close.
  • 1 Hide
    ricardok , April 4, 2011 9:16 PM
    Next on the news: Google sues Apple/Nokia/Motorola/HTC for patent infringement (I bet that I'm writing it wrong but, hey, you get the picture).

    I also agree that the patent system is flawed. Every other week we see someone suing someone else because of those dubious patents that are there just for suing others.

    Let's all apply for a patent on the alphabet..
  • 0 Hide
    LORD_ORION , April 4, 2011 9:28 PM
    Sure... it only cost Canadian tax payers about a trillion dollars in various subsidies over the years to develop these things... let's sell them for a fraction of that worth.
  • 1 Hide
    borisof007 , April 4, 2011 9:49 PM
    If you can't beat 'em, buy 'em
  • 1 Hide
    adiposity , April 4, 2011 10:00 PM
    Isn't this just a bid, and they haven't even won the auction yet?
  • -1 Hide
    Titanius , April 4, 2011 10:17 PM
    adiposityIsn't this just a bid, and they haven't even won the auction yet?


    Nortel said that it has agreed to transfer its remaining 6000 patents to Google for $900 million in cash.


    There, reading the article answers all...
  • 0 Hide
    Titanius , April 4, 2011 10:23 PM
    Please disregard my above message. Apologies to adiposity, you're right:

    http://www2.nortel.com/go/news_detail.jsp?cat_id=-8055&oid=100272100&locale=en-US&lcid=-1

    Google has entered a Stalking Horse Sale Agreement with Nortel to buy the 6000 or so patents for $900 Million...stalking horse means that there will be an auction (in June 2011) and the highest bidder will win the patents.

    If Google really wants to buy these patents, they won't back down from bidding higher than whoever challenges them, they do have the money.
  • 0 Hide
    lp231 , April 4, 2011 10:31 PM
    Once I was working on a system that was infected with a severe malware.
    The name of the malware tried to mimick Norton and it was name Nortel (not Nortel this article is talking about).
    http://www.2-spyware.com/remove-nortel-antivirus.html
    http://www.nortel.com/corporate/alert.html

  • 0 Hide
    alidan , April 4, 2011 11:26 PM
    LORD_ORIONSure... it only cost Canadian tax payers about a trillion dollars in various subsidies over the years to develop these things... let's sell them for a fraction of that worth.


    actually, pattens can be simple ideas. like a screw and a screwdriver simple ideas. lets assume that 100 people can make 1 patent every month each. thats 1200 a year.

    you can patent the SHAPE of an object if it has some functionality improvements. 100 people with lets assume a 100k a year salery, comes to 10 mill a year.

    these patents may be SIGNIFICANTLY cheaper than they are selling them for. however the revinue that would come from suing, is a long and counter productive process.
  • 0 Hide
    JamesSneed , April 4, 2011 11:36 PM
    The prevention of lost revenue, bad image, and time dealing with law suits is priceless. Hell Samsung had to pay Rambus $900 Million not to long ago for patents. The 3G and 4G wireless related patents may be worth $900 Million alone.
  • 1 Hide
    znegval , April 5, 2011 12:41 AM
    RicardoKNext on the news: Google sues Apple/Nokia/Motorola/HTC for patent infringement


    Bullshit. Google has proven over time that they don't want to join the patent trolling crap. This purchase was probably merely a defensive move.
  • 1 Hide
    Camikazi , April 5, 2011 1:48 AM
    I hope they are doing this just to protect themselves from people like Apple and the rest who want to sue their competition to death. If this is just a defensive measure to make sure they can develop without lawyers getting on their back then good for them.
  • 0 Hide
    Anonymous , April 5, 2011 3:57 AM
    The NWO will never be short of cash. They print it and control it.
  • 1 Hide
    Anonymous , April 5, 2011 7:12 AM
    From Microsoft
    (via http://www.geekwire.com/2011/900m-bid-google-line-6000-nortel-patents)

    The company says in a statement, “Microsoft has a worldwide, perpetual, royalty-free license to all of Nortel’s patents that covers all Microsoft products and services, resulting from the patent cross-license signed with Nortel in 2006.”
    http://www.microsoft.com/presspass/press/2006/jul06/07-18UCGNortelPR.mspx
  • 0 Hide
    bin1127 , April 5, 2011 7:34 AM
    it was either google or apple. I hope google gets them to stave off the apple lawsuits.
  • 0 Hide
    WyomingKnott , April 5, 2011 12:44 PM
    "The patent system should reward those who create the most useful innovations for society, not those who stake bogus claims or file dubious lawsuits. It's for these reasons that Google has long argued in favor of real patent reform, which we believe will benefit users and the U.S. economy as a whole."
    Does this mean that Google is not going to sue any other company over IP, ever?
  • 0 Hide
    rantoc , April 5, 2011 1:04 PM
    znegvalBullshit. Google has proven over time that they don't want to join the patent trolling crap. This purchase was probably merely a defensive move.


    If Google indeed would engage in patent wars it would be a change from their usual subversive tactics (illegal information gathering ect). I doubt they only want to secure their ground, bet they rather use it as a persuation tool in closed room meetings.
  • 0 Hide
    rhino13 , April 5, 2011 2:05 PM
    I don't like seeing Google have to invest in patents like this.
    I'd far rather see them pouring money into their engineers who are working no their new OSes and other cool stuff. I guess this is the way of life. But I totally agree with Google in a lot of ways the patent system no longer rewards but hamstrings innovation :( 
  • 0 Hide
    Camikazi , April 5, 2011 3:19 PM
    rhino13I don't like seeing Google have to invest in patents like this.I'd far rather see them pouring money into their engineers who are working no their new OSes and other cool stuff. I guess this is the way of life. But I totally agree with Google in a lot of ways the patent system no longer rewards but hamstrings innovation

    When patents like these go up for sale and the wrong company gets a hold of them it won't matter how much money Google puts into software if they are blocked by the patent holders. Someone is gonna buy these patents and we can only hope it's a company that understands that certain technologies are needed in order for innovation to continue and will allow them to be used freely. As far as these patents go the most likely buyers are probably MS, Apple or Google and we are all gonna suffer if Apple gets them so I am rooting for Google and hope they don't get greedy with them.
  • 0 Hide
    f-14 , April 5, 2011 4:32 PM
    Quote:
    Google may have simple been tired of lawsuits

    you screwed up the story mr perry.
    Quote:
    decided to bid for Nortel’s patent portfolio in the company’s bankruptcy auction."



    http://mashable.com/2011/04/04/google-nortel-patents/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+mashable%2Fyahoo+%28Mashable+Top+Stories+-+Yahoo+News%29
    Quote:
    Google Bids $900 Million for 6,000 Telecommunications Patents
    by Ben Parr
    Google has agreed to purchase Nortel’s approximately 6,000 patents, a portfolio that includes a wide array of wireless, 4G, semiconductor and data networking IP.

    Canada-based Nortel Networks was once one of the largest telecom companies on the planet, worth C$398 billion at its peak during the dot com boom. The stock crashed and burned though, dropping to less than C$5 billion in market cap by 2002. The Canadian company never recovered and filed for bankruptcy in 2009, agreeing to liquidate all its assets later that year.

    Since then, Nortel has been selling off its assets to pay back its creditors, and is now selling one of its most valued: its expansive patent portfolio, a century’s worth of IP “spanning wireless, wireless 4G, data networking, optical, voice, internet, service provider, semiconductors and other patent portfolios.” That’s part of why Google has entered into a stalking horse sale agreement with Nortel worth $900 million in cash.

    According to federal law, Google can’t purchase the patent portfolio outright; the bankruptcy court has to give other bidders a chance to submit their offers. But it does mean Google is in the driver’s seat to acquire Nortel’s patented technologies. The search giant makes it clear in a blog post that it’s attempting to acquire Nortel’s portfolio as a defensive measure against patent litigation:

    “But as things stand today, one of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services. Google is a relatively young company, and although we have a growing number of patents, many of our competitors have larger portfolios given their longer histories.”

    Google has been sued on multiple occasions for patent infringement, but let’s be clear: The Nortel deal is all about Oracle, which sued Google last year for IP infringement related to Android’s use of Java (a technology Oracle now owns, thanks to its acquisition of Sun Microsystems).

    Things haven’t looked good for Google in its patent defense, so acquiring a comprehensive array of telecommunications patents could give it leverage in the Oracle lawsuit. It also gives Google additional protection from any company that wants to sue it in the future. And with tech companies like IBM and Microsoft being granted 3,000 to 5,000 patents per year, it’s easy to see why Google feels the need to play catch-up.

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