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Google is looking to purchase the remaining 6,000 networking and wireless patents from Nortel in order to produce a deeper portfolio and avoid patent litigation

Google has recently offered $900 million for Nortel Networks' remaining 6,000 networking and wireless patents.

Nortel Networks is a multinational telecommunication equipment manufacturer from Canada. In January 2009, the company filed for bankruptcy. Since then, Nortel has been selling different areas of the company off in order to restructure its debt. For instance, Genband bought Nortel's VOIP business in February 2010. 

Now, Google is looking to purchase the remaining 6,000 networking and wireless patents from Nortel in order to produce a deeper portfolio and to "stave off increasingly rampant patent litigation." Google has mentioned that it is patent poor and could use a broader portfolio to stay competitive. 

"One of a company's best defenses against this kind of litigation is to (ironically) have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services," said Kent Walker, Google's senior vice president and general counsel. 

As of right now, Google is dealing with a lawsuit from Oracle, which is an open and integrated hardware and software systems company. Oracle claims that Google's Android platform uses Java code illegally, which is covered in its patents. A deeper patent portfolio would have saved Google from this copyright infringement lawsuit. 

As of right now, Google is the most interested buyer in the early stages of the patent auction. According to recent reports, the deal is a "stalking horse asset sale agreement," which allows other companies to bid against Google before the auction, where Google is the starting point. 

According to J.P. Morgan analysts, Apple has also shown interest in the auction. More specifically, Apple is looking to compete with Google for Nortel's patents for 4G wireless communications called Long Term Evolution (LTE). Research in Motion may be another bidder in the upcoming auction. 

Nortel's patent auction is expected to begin in June, as long as U.S. and Canadian courts approve it. 

"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," said Walker. 

Google is also in the midst of considering a $700 million purchase of ITA Software Inc., which may prompt an antitrust investigation of Google's web dominance by the Federal Trade Commission and the Justice Department. 

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A perfectly legal barrier to entry.
By nafhan on 4/5/2011 4:13:41 PM , Rating: 5
In another article, people were talking about how large companies are able to keep smaller more agile companies from creating and implementing new technology by using illegal market barriers.

However, seeing stuff like this makes me think that one of the real barriers for smaller (and often large) companies is IP law. Am I the only one that thinks it's a little sad that having the ability to sue an organization in order to keep that organization from suing your organization is worth almost a billion dollars?

Just a thought...

By Master Kenobi on 4/5/2011 5:15:43 PM , Rating: 3
Well these days it would simply get filed under "The cost of doing business."

RE: A perfectly legal barrier to entry.
By wordsworm on 4/6/2011 3:54:19 AM , Rating: 2
These laws have also been really good for helping the Davids vs. the Goliaths. You have it entirely backwards.

What Google is paying for is many years worth of research and development. Why shouldn't Google have to pay for the labour of other organisations? If it wants to become one of the big boys in this arena, they ought to pay for it, or do their own research and development.

By Taft12 on 4/6/2011 11:47:50 AM , Rating: 2
These laws have also been really good for helping the Davids vs. the Goliaths. You have it entirely backwards.

Yes they have been good for the Davids... but not for decades now. Today, patent lawsuits in the software industry are wielded as a weapon against upcoming competitors, defensively in a "mutually assured destruction" sense against other large companies, and finally (and most despicably) by patent trolls who don't actually produce anything of value.

The time for the end of software patents came more than 10 years ago

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

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