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Nortel Patents: A Painful Loss For Google

Google offered $900 million for Nortel's remaining patent portfolio in a stalking horse bid. A consortium of Google enemies, however, placed the successful bid of $4.5 billion. What now, Google?

Nortel squeezed a substantial amount of cash out of its 6000 patents, thanks to the patent-sue-me-sue-you frenzy in the wireless industry. Relating to the areas of wireless, wireless 4G, data networking, optical, voice, internet, service provider, and semiconductors, the portfolio may have little value as an asset the perspective of active innovation, but it is said to carry tremendous value as a defense in potential lawsuits.

The winning consortium consists of Apple, EMC, Ericsson, Microsoft, RIM and Sony. What makes this sale so special is the fact that those are companies that already have a substantial patent portfolio, while Google has not and it is generally seen as a problem for Android. Whether we like it or not, the U.S. and this industry in particular is a patent and legal system mess. Fraudulent lawsuits are surfacing frequently and threaten to slow or halt innovation.

Google, which originally made it sound like it had to simply buy the portfolio to be able to "innovate", is now out of the loop again and there are questions just how dangerous this game is and how likely it is that Android can be shut down by lawsuits. At the very least, Google will need to be more open about its strategy to defend especially Android developers and handset manufacturers against lawsuits.

  • phatboe
    I don't understand why Google didn't pony up the money and just buy the patents. Android handset developers are getting strong armed by MS left and right to pay up licensing fees and this will hurt the manufacturers bottoms line. With talks of HP licensing out is WebOS and WinMo slowly gaining market acceptance Google needs to do more to protect it's Android manufacturers from litigation or fact losing them to the competition.
    Reply
  • RazorBurn
    If I could get a Patent for all the ideas in my Head.. I could be the richest person in the world..
    Reply
  • kartu
    This patent idiocracy badly harms progress.
    Reply
  • vaughn2k
    razorburnIf I could get a Patent for all the ideas in my Head.. I could be the richest person in the world..Just prepare around U$25,000.00 each patent, a patent attorney, and 6 months patience for application and qualification, before your (IP) patent invention will be yours.
    Reply
  • gamerk316
    This patent idiocracy badly harms progress.

    Thankfully, SOME of it is finally getting fixed, with the US FINALLY moving to a "first to patent" system (as opposed to having to prove you actually did most of the research)
    Reply
  • nebun
    google i big but it does not have the money to defend all of it's android developers
    Reply
  • bin1127
    Google couldn't had possible won the bid that was 5x what it intended. Google probably didn't even low ball it and went with a honest bid. But a consortium deliberate in blocking the purchase put in an unrealistically high bid that only made sense when the costs were divided up. MS or Apple alone wouldn't have in their right minds put in a fraction of this bid. It is legal, but feels very much like a cartel situation putting up barriers to reasonable competition.
    Reply
  • nebun
    bin1127Google couldn't had possible won the bid that was 5x what it intended. Google probably didn't even low ball it and went with a honest bid. But a consortium deliberate in blocking the purchase put in an unrealistically high bid that only made sense when the costs were divided up. MS or Apple alone wouldn't have in their right minds put in a fraction of this bid. It is legal, but feels very much like a cartel situation putting up barriers to reasonable competition.don't get me wrong, google is a nice company but is getting a little to big, everything we do evolves around google these days
    Reply
  • tomrippity02
    nebundon't get me wrong, google is a nice company but is getting a little to big, everything we do evolves around google these days
    And the 5 or 6 companies that bought the patents are small? Who cares of Google is involved with everything we do? To date, it seems to me that Google has had genuinely good intentions. The companies that bought those patents are only going to use them to bully innovators even more.
    Reply
  • scook9
    It only revolves around google if you let it....no one is forcing you to use their servicesnebundon't get me wrong, google is a nice company but is getting a little to big, everything we do evolves around google these days
    Reply