Google bids US$900m for Nortel’s patent portfolio

4 Apr 2011

Internet giant Google has revealed that in a bid to steer clear of the explosion in patent litigation lately, it has made a “stalking horse” bid for Nortel’s patent portfolio in the company’s bankruptcy auction.

The internet giant is believed to be bidding US$900m for some 6,000 valuable patents.

“The tech world has recently seen an explosion in patent litigation, often involving low-quality software patents, which threatens to stifle innovation,” explained Kent Walker, senior vice-president and general counsel at Google.

“Some of these lawsuits have been filed by people or companies that have never actually created anything; others are motivated by a desire to block competing products or profit from the success of a rival’s new technology.

“The patent system should reward those who create the most useful innovations for society, not those who stake bogus claims or file dubious lawsuits,” Walker said.

In 2009, Nortel filed for bankruptcy as the global recession took hold. Later that year, Avaya acquired Nortel’s enterprise division, including its Galway operation, which has been active in that city for 38 years. Rising Irish telecoms technology company Intune Networks saved about 200 jobs at Nortel’s former Northern Ireland operation as part of its expansion plans.

Tech industry in a storm of patent litigation

At the moment, the technology industry in the States and elsewhere is in the grip of a lawsuit frenzy over patents, as exemplified by the ongoing battle between Apple and Nokia over smartphone patents.

Google, Walker explained, has long argued in favour or real patent reform.

Walker explained that Google has to defend itself against such litigation.

“One of a company’s best defences 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,” he said.

Nortel has selected Google’s bid as the “stalking horse bid,” a starting point against which others will bid prior to auction.

“If successful, 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,” Walker said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years