Google bids for 6,000 telecoms patents in $900 million Nortel deal

Google bids for 6,000 telecoms patents in $900 million Nortel deal

Nortel’s sale of 6,000 patents and patent applications has caught Google’s attention, despite its long-standing call for real patent reform.

Nortel Networks Corporation has announced the planned sale of approximately 6,000 patents and patent applications. It claims that the portfolio for sale “touches nearly every aspect of telecommunications,” spanning patents in wireless, wireless 4G, data networking, optical, voice, internet, service provider and other patent portfolios, as well as additional markets such as internet search and social networking.

Google has entered into a “stalking horse sale agreement” for $900 million, which is the starting point against which others will bid prior to the auction. This would allow other companies to better Google’s offer, and there is speculation that the total portfolio could generate over £1 billion. George Reidel, chief strategy officer for Nortel, said: “We look forward to what we hope will be a robust auction, currently expected to be held in June 2011.”

As a relatively young company, Google currently holds only a small number of patents. The BBC reports that – according to United States Patent and Trademark Office – Google holds 630 patents. In comparison, Apple holds more than 3,800 and Microsoft around 18,000.

Google has been highly critical of the patent system. Kent Walker, senior VP and general counsel for Google, said: “The tech world has recently seen an explosion in patent litigation, often involving low-quality software patents, which threatens to stifle innovation. Some of these lawsuits are motivated by a desire to block competing products or profit from the success of a rival’s new technology.” Google appears to have decided that to hold its own “formidable patent portfolio” will help to protect it against this kind of litigation.

Microsoft signed a patent cross-license with Nortel in 2006, which granted it a “worldwide, perpetual, royalty-free license to all of Nortel’s patents that covers all Microsoft products and services.” Microsoft therefore cannot be sued for infringing on the rights already issued to them. It remains to be seen what their reaction to this auction will be.

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