Nortel patents sale could spell trouble for Google's Android

By on July 12, 2011, 10:00 AM

U.S. and Canadian courts have approved the sale of some 6,000 patents and patent applications from bankrupt Nortel Networks to a consortium of companies known as Rockstar Bidco. The four-day auction in New York closed with a price five times the stalking-horse bid, the $900 million initially offered by Google, putting the final sale at $4.5 billion after 19 rounds of bidding.

That's a few more billions than anyone expected just weeks ago, so why the sudden interest? For one thing this is among the largest intellectual property portfolio ever sold, covering data networking, wireless, optical, voice, semiconductor and service-provider technologies, which gives its owner a major shield against potential lawsuits from direct competitors or patent trolls.

Google had hoped to buy the portfolio to discourage other companies from suing their Android partners and benefit the open-source community. But a few other companies were after Nortel's IP as well, including Intel, Microsoft and Apple.

The latter two joined forces after five rounds of bidding as part of the Rockstar consortium, which also included EMC, Ericsson, Research In Motion and Sony. By the sixth round of bidding Intel dropped out of the game, but later joined Google and together stayed in the auction until the 19th round. Ultimately Rockstar won the auction, though, and if recent developments are any indication this could spell trouble for Android's growth.

You see, Microsoft's Steve Ballmer has always maintained that Android is not free, as it uses technology for which licenses should be paid for. The company has already been successful in extracting fees from a handful of Android manufacturers, including HTC, and is currently seeking a similar deal with Samsung.

Besides potentially cashing out on a few million dollars worth of patent fees, the move should make Android a less attractive platform for handset makers. Needless to say, whatever slows Android's growth is also good for Apple, which explains why the company was willing to go to great lengths to grab the patents out of Google's paws.

Unsurprisingly, Google is not happy. "This outcome is disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition. We will keep working to reduce the current flood of patent litigation that hurts both innovators and consumers," Kent Walker, Google’s Senior Vice President and General Counsel said in a statement to the press.




User Comments: 11

Got something to say? Post a comment
lmike6453 said:

This sucks, always the good guys that could be making bazillions off of Android that just want open source are getting beat with the paddle stick as if they're a true threat to Microsoft and Apple.

bimboy56 said:

Darn, lawsuits keep on killing the OpenSource Star. > d*mn them.

Guest said:

Is Google really open when they use other technologies that others developed?

Guest said:

innovation and advancement uses the foundations of existing products to do so. it's pretty much next to impossible from an economic standpoint to create a technology that has ZERO patent infringement, and even then, Patent trolls like MS and Apple will always find ways to try and sink competition. This is what makes them such ethically vacant companies.

All this purchase is leading to is a massive Trolling wave against Google, Samsung and whomever else they see fit to try and put out of business, gouge money from, pathetic and disgusting. Anyone involved in the Rockstar group I won't ever support.

It's interesting to notice that the bulk 0f the companies involved are under pressure from competitors who are making a better product, cheaper. Guess this is the only way they can make the books balance.. innovation pah! lets just spend out time suing.

Archean Archean, TechSpot Paladin, said:

It's interesting to notice that the bulk 0f the companies involved are under pressure from competitors who are making a better product, cheaper

I don't think this is entirely correct, and Google's android is not better than iOS or WP for that matter. The simple fact is, Android took off because cell phone makers can make more money with it (by not having to pay any license fee etc.). By the way just try searching with regard to issues faced by android cell phones and you'll know how not good it is, simply put it is about as good or bad as the competition is.

Guest said:

The simple fact is, Android took off because cell phone makers can make more money with it (by not having to pay any license fee etc.).

wtf does that have to do with consumers?

I wanna know if these patents were so important to Google, how was it not able to match and beat a 4.5b bid... or higher? Someone let me know.

Guest said:

Patents should have significantly shorter lifespans. At its root it is ignorant to claim sole ownership of ANYTHING as all "inventions" are utterly and intrinsically codependent on an infinite chain of causality.

Perhaps our schools should be getting a cut from Apple and Microsoft teaching them english, math and science.

Results.... a stupid ugly greedy world full of shiny things that go "ping" and taxpayers paying outrageous bonuses to bankers for "AAA" subprime (oxymoron anyone) mortgages. Thanks god we have the government to hire all these fraudsters to keep deregulating so that we can bring the destitute 92% of Americans to their knees and the other 8% can play golf everyday in their private communities in Florida.

A freemarket is only free for the privileged.

Viva la revolution!

Guest said:

Of course Google is open, they give away the products they develop for free. Free of course being they gain royalties off the ads and such they embed in the apps as a result of them being free. But this is not costing the users and device manufacturers anything to Google.

Steves said:

Guest said:

innovation and advancement uses the foundations of existing products to do so. it's pretty much next to impossible from an economic standpoint to create a technology that has ZERO patent infringement, and even then, Patent trolls like MS and Apple will always find ways to try and sink competition. This is what makes them such ethically vacant companies.

So multi-billion dollar multi-nationals like Google should be allowed to simply sit back and wait for others to put years of testing, lab work, trials and development into new products. Then when they are shown to be unique, innovative and new, we should allow these multi-billion dollar corporations the right to simply steal the work for free?

Capacitive multi-touch sounds pretty obvious in hindsight but where was it 5 years ago?

Even MS was able to come up with a different gesture for the unlock screen.

So you support out right theft of ideas? And you do realize a patent troll relates to companies that do not design/manufacture their own products and that does not describe either MS or Apple.

An IP thief does describe Google, however. Copy the IP of your competitor and give it away while linking all data through your ad engines. That is Google's business model. Convince the non-thinking FOSS crowd that you are their friend and let mob rule form public opinion. That is Google's defense strategy.

example1013 said:

People seem to keep thinking that Google isn't a corporation that makes oodles and oodles of money, and has its own interests to protect. Google isn't "for us", except insofar as being "for us" helps them make more money "for them".

Archean Archean, TechSpot Paladin, said:

Exactly, a point which most of the lot somehow misses out.

Load all comments...

Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.