April 4, 2011

Google Bids $900 Million For Nortel Patents

Google Inc. said on Monday that it plans to bid $900 million to buy Nortel Networks patent portfolio in a bankruptcy auction scheduled for June.

Nortel selected Google's offer as the "stalking horse bid" to serve as the starting point in the bidding process.

Nortel has been selling its operations piece by piece since it filed for bankruptcy protection in Canada and the U.S. in January 2009.  Its patent portfolio includes about 6,000 patents and patent applications spanning a broad range of technology, including wireless, data networking and semiconductors.

The Internet giant said that it hopes Nortel's patent portfolio will discourage other companies from suing it, and help it continue to innovate in the absence of broad reform of the U.S. patent system.

Last month the Senate passed legislation that would make the most significant changes to the patent system in over 50 years.

The Internet giant said that a strong patent portfolio is the best defense against such litigation.

"The tech world has recently seen an explosion in patent litigation, often involving low-quality software patents, which threatens to stifle innovation," Google general counsel Kent Walker said in a blog post.

"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 rivals new technology," Walker said.

"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," he said.

"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," Walker said. "So after a lot of thought, we've decided to bid for Nortel's patent portfolio in the company's bankruptcy auction."


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