Microsoft wants guarantees if Google buys Nortel patents

Microsoft wants guarantees if Google buys Nortel patents

Summary: If Google ends up buying 6,000+ telecommunications patents as part of a Nortel bankruptcy proceeding, Microsoft wants some guarantees, according to bankruptcy court filings today.

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Back in April of 2011, it came to light that Google was attempting to buy 6,000 or so Nortel patents as part of Nortel's bankruptcy proceedings. Google bid $900 million for those patents, according to Reuters.

Microsoft didn't bid on the patents. It didn't have to, company officials said, as Microsoft had "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."

On June 13, Microsoft made it clear that if Google's purchase of those patents proceeds, the Redmondians want some guarantees in place. According to Bloomberg, Microsoft objected to Nortel's proposed bankruptcy sale of more than 6,000 patents, telling a judge the deal could give the proposed buyer, Google "an unfair competitive advantage."

When I asked for more details, a company spokesperson sent me this statement via e-mail:

“Microsoft wants any new owners of the Nortel patents to be subject to Nortel’s existing commitments to Standards Setting Organizations and to Microsoft.  By making this filing, Microsoft preserves its ability to raise this issue with the bankruptcy court in the event the final buyer of the Nortel assets seeks to disclaim any of these commitments.”

Microsoft wasn't the only one with objections to the proposed Google patent purchase, according to Bloomberg. HP and Nokia also wanted guarantees.

Without changes, the proposed sale 'would result in considerable disruption in the development and enhancement of various existing technologies and give the prospective purchaser an unfair competitive advantage,' Microsoft said today in court papers filed in U.S. Bankruptcy Court in Wilmington, Delaware," Bloomberg said.

Nortel filed for bankruptcy protection in January 2009. There were previous reports, dating back to the end of 2010, that Apple, Nokia   and RIM might also be among the bidders for the contents of Nortel’s patent coffers. The Nortel patents up for auction were said to cover wireless handsets and infrastructure, as well as optical and data networking, Internet, Internet advertising, voice and personal computers

In 2007, Microsoft and Nortel cemented a wide-ranging strategic partnership. Via that much-trumpeted alliance, the pair committed to take on Cisco by integrating and cross-selling their communications wares and by jointly licensing each other’s IP.

Topics: Microsoft, Enterprise Software, Google, Legal

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • Message has been deleted.

    itguy08
    • RE: Microsoft wants guarantees if Google buys Nortel patents

      @itguy08 didn't read the article I see.
      razzledazzle
      • RE: Microsoft wants guarantees if Google buys Nortel patents

        @razzledazzle

        I agree. itguy08 could not possibly have read the article. I am not enamoured with MS, but on this issue, they would seem to have a fair point. They've paid once for rights to use patents and, prima facie, they should not be required to pay a second time . . . unless there is some intriguing legal principle about which I am not aware. Irrespective, they would seem to hold the moral upper-hand on this issue, if not the legal one as well.
        Wakemewhentrollsgone
      • patent game

        @razzledazzle
        Google is not in the block-competition-with-patents which comes down at block-innovation, so Google is probably bidding for defensive reasons. But OK, it is better to set that on paper.

        And I think the real MS/Novell deal was very complex and the same conditions can not possibly be continued between MS and Google.
        bezoeker
    • your patents are our patents now

      @itguy08
      I guess this would give Google the right to use the patents if nothing else, so all that blocking progress by patent trolls would suddenly disappear. Not a bad idea.
      sparkle farkle
  • RE: Microsoft wants guarantees if Google buys Nortel patents

    This looks like a very good opportunity for Google to "dissuade" Microsoft of suing Android Makers and try to charge the Windows Tax on Android Devices.<br><br>I see this as "once in a lifetime" chance to free Android of the Microsoft Patents threats.
    Fox-Info
    • I don't see where these would help Google against MS much.

      @Fox-Info

      Any cross licensing agreements in the package would not extent to Google's partners. It would open up cross licensing between MS and Google but not MS and HTC/Motorola/Samsung.

      I do see this as helping more with Apple/Google issues. Where Apple actually needs some of the IP, Google could threaten Apple with retaliation if Apple did not leave members of the OHA alone.
      Bruizer
      • RE: Microsoft wants guarantees if Google buys Nortel patents

        @Bruizer Well that depends on what Google negotiate, surely if they negotiate a cross licencing deal with Microsoft, Google could demand wording in any deal which protects it partners from being sued for using Android and any code contain in Android release. <br><br>

        That would not only protect Android partners but could also force some to scrap there own UI and additional software they like to pile on and just release phones with plain Android on as this would provide the most protection, at least from Microsoft and obviously only on the software. By Microsoft is not the sort of company to have a lot of hardware patents.

        As you said Apple could be scared away. An so could Nokia, especially as many of those patents involve next generation wireless technology, which Nokia cannot afford to be frozen out of.
        Knowles2
      • Actually, It Probably Would Extend to Them

        @Bruizer
        If Google had a cross license agreement with Microsoft that prevented Microsoft from suing over Android, then it would almost certainly prevent Microsoft from suing anyone over Android (at least those who were partnered with Google for Android).

        Of course, if there were a suit unrelated to Android, that could still happen, but Microsoft being a software company, that would most likely be about an application rather than the device.
        CFWhitman
    • RE: Microsoft wants guarantees if Google buys Nortel patents

      @Fox-Info
      It's up to the contract.
      Usually the contract is upheld in a similar way to which mortgages are sold between banks and the terms upheld.
      if M$ was smart then the contract could give them the license, but with its dumb lawyers M$ probably missed it.
      Linux Geek
  • RE: Microsoft wants guarantees if Google buys Nortel patents

    Wouldn't it be nice if patents that belong to a company that goes bankrupt simply cease to exist meaning no one can claim to be the inventor and charge others for using the concept?
    arjen.van.mierlo@...
    • RE: Microsoft wants guarantees if Google buys Nortel patents

      @arjen.van.mierlo@...
      Great solution. Now you could get rid of annoying little inventors with valid patents. Just drive them out of business and the problem goes away!

      Yeah right. No thanks.
      A.Sinic
      • RE: Microsoft wants guarantees if Google buys Nortel patents

        @A.Sinic

        They've been doing that for years using lawsuits.
        Hemlock Stones
    • RE: Microsoft wants guarantees if Google buys Nortel patents

      @arjen.van.mierlo@...

      So if a small company has intellectual property that a Google/Microsoft/Apple covets all GooMicroApple would need to do is drive the inventor into bankruptcy? Not a good idea IMHO.
      rdy2retire
  • RE: Microsoft wants guarantees if Google buys Nortel patents

    If Microsoft wants the same deal as it had with Nortel, I am sure Google would be fine with that, just back off our manufacturers, cancel all up coming patent disputes about Android and you can have your licenses.

    I suspect most of those deal have an expiry date anyway, so Microsoft is playing a dangerous game here, if the deal expires Google may not be interested in renewing it anyway.

    I suspect none of the big guys wanted to pay for these patents, they were expecting some small company to come in snapped them up and live on the licensing fee.

    None of them were prepared for Google Bid and certainly not at the starting level of a billion dollars and so now they are all trying to fine a cheaper approach.

    As far as I am concern Google have just buy some assets not the company and so any deal the company had that involve those patents are worthless pieces of paper as that company no longer excist.

    Unless there is a clause in the contract about transfere of patents to a third party that requires the third to maintain the same license agreement with Microsoft.

    I suspect there no clause like that stated in the contract that Microsoft signed and are now going to the judge to try and get him to impose one on the buyer as they do not want to enter bidding war against a player that cant afford to loose biggest patent collection likely to ever come up for sell.
    Knowles2
    • RE: Microsoft wants guarantees if Google buys Nortel patents

      @Knowles2
      The article states that the agreement in place was "perpetual" so no expiry date so if the agreement is upheld then Microsoft have no worries. No dangerous games here.
      AndyM12
    • RE: Microsoft wants guarantees if Google buys Nortel patents

      @Knowles2
      as Microsoft had ?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.?

      Doesn't sound like an expiry date to me ..."..worldwide, perpetual, royalty-free license.."
      Michigan Computer Tech Services
      • RE: Microsoft wants guarantees if Google buys Nortel patents

        @Michigan Computer Tech Services - "Perpetual" can not be enforced if the original owner ceases to exist.... New chapter.
        Willnott
  • They should have bid

    All of the companies had a chance to buy the patents. If the loser's lawyers did not sufficiently warn the losers of the consequences of losing how is that Google's problem. Google's paying for the patents. The others had their chance to pay for them and decided not to. So what we don't have property laws anymore because the complainer is one of the richest corporations in the world?
    curph
    • RE: Microsoft wants guarantees if Google buys Nortel patents

      @curph
      MS didn't bid because MS already has licensing agreements in place for all these patents. They just want to make sure the bankruptcy judge doesn't vacate that agreement. And don't worry, he wont.
      x I'm tc