Ever feel left out? Nortel sells its patent stash to just about everyone except Google for US$4.5 billion. By Ian Scales.
Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony have been announced as the winning bidders for long-bankrupt Nortel’s patents portfolio. In the end it went for US$4.5 billion in cash to a consortium formed by the companies. The stash comprises more than 6,000 patents and patent applications covering a vast range of specialist areas from wireless to semiconductors to fibre optics and beyond.
Google was an early bidder, coming in with a US$900 million offer.
At the time Google openly admitted it wanted the patents to defend itself against future patent actions.
Its competitors agreed that it would be a huge help to the increasingly powerful giant as it guided Android into the dominant smartphone OS position, and decided to put a stop to that defence option by jointly buying the portfolio for themselves.
The outcome, and the huge price paid, is testament to just how important intellectual property (IP) has become (just about any IP will do) in the mobile wars. The objective is to have enough patents in your locker, covering as many areas as possible, to create a disincentive for any one of your competitors to use its own patents to come after you.
It's the old, "we're not going to hurt each other, are we?" scenario, and we've seen it played out several times over the past couple of years. It usually ends in some sort of out-of-court settlement with the parties agreeing to swap licenses for various technologies. The alternative is endless, expensive and unsettling (for partners and customers) litigation.
If all the protagonists have fairly similar-sized patent pools then this game can proceed nicely (cue Monopoly-style game with patents instead of houses and hotels). If not, one party can end up losing badly.... as Google fears it might as Oracle comes in for the kill. (see - Telephone number damages).
So it was hardly surprising that Google wanted the Nortel stash. And hardly surprising that its enemies combined to make sure it didn't get it.
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