It is the first official day with Larry Page at the helm and he is already making some moves. Google today made a bid on almost de-funked Nortel Networks Patent portfolio for a whopping $900 million. Google has stated that they don’t think companies should stifle innovation by creating patent portfolios, and the current patent system in general. They also went on to say;
But as things stand today, one of a company’s best defenses 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.
As a resident of Ottawa I am more than familiar with Nortel Networks as I had many friends that worked for them during the boom years, and I know that Nortel holds patents on a huge variety of technologies that have yet to see the light of day, as well as many that we use every day. Google’s bid on this portfolio is what is know as a “stalking horse” bid, which means that any other company wishing to bid as to use the $900 million as a starting point. Google mentioned in their announcement that both Android and Chrome would benefit from Google obtaining these patents. What is also interesting is that Microsoft holds a “a worldwide, perpetual, royalty-free license to all of Nortel’s patents that covers all Microsoft products and services, resulting from the patent cross-license signed with Nortel in 2006.” What this means is that Microsoft cannot be sued for infringing on the bundle of rights that they are already licensed to use.