Bankrupt Canadian telecom Nortel is putting its valuable patents on the auction block. Google has lined up a $900 million bid in a "Stalking Horse" agreement with Nortel. The search giant is looking to bolster its defensive patent portfolio in order to increase the amount of leverage it has in patent litigation disputes and cross-licensing agreements.
The sale will include roughly 6,000 patents spanning a range of technologies. In an official statement, Nortel chief strategy officer George Riedel described it as "one of the most extensive and compelling patent portfolios to ever come on the market." The actual auction will take place in June, but Google's offer will set the starting price. It's unclear if any other major industry players will aim to outbid Google for the patents.
Google explained the motivation behind its bid in an entry on the company's official blog. The search giant says that abusive patent litigation is stifling innovation in the technology industry, and, as a result, it must expand its defensive patent portfolio in order to protect its ability to develop new products. Google general counsel Kent Walker says that the company's move to acquire the Nortel patents could discourage competitors from filing patent infringement lawsuits against Google.
"We hope this portfolio will not only create a disincentive for others to sue Google, but also help us, our partners and the open source community—which is integrally involved in projects like Android and Chrome—continue to innovate." wrote Walker. "In the absence of meaningful reform, we believe it's the best long-term solution for Google, our users and our partners."
Intellectual property conflicts are practically unavoidable in the mobile technology industry. Like virtually every other mobile platform, Google's Android operating system is the target of numerous patent lawsuits. Oracle—which obtained the rights to Java in its acquisition of Sun—is waging a high-profile litigation campaign against Google, claiming that Android's independently developed Java stack infringes on its patents. Google may be able to win itself a bit more room to maneuver if it could put Nortel's patents into play as a retaliatory measure.
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