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Nortel patents: Will Google share the protection?

The PC industry thrived because of cross-technology license agreements that limited legal actions. Can Google provide the same for Internet services?
Written by Tom Foremski, Contributor

Larry Dignan at ZDNet reports:

With the move, Google would get about 6,000 patents covering wired, wireless and digital communications technologies.

Google's top lawyer, Kent Walker wrote:

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.

The PC industry had a problem when it was starting out in that PC technologies represented a growing basket of technologies that had lots of IP belonging to many companies.

If would have been a nightmare to figure out all the IP ownership and that would have had a chilling effect on the development of the entire industry.

But there was a solution: the key players in the PC market would cross-license their patent portfolios to each other. This provided each with protection from legal challenges because they had automatic licenses to similar IP. And it also provided an umbrella of protection for PC industry innovators, which continued to lower PC prices and expand the market without having to worry about a legal minefield.

Will Google do the same? Could Google do the same and use its expanded patent portfolio to shield other innovators from dubious lawsuits so that innovation in Internet services can continue without interference from patent trolls?

After all, Google does benefit from continued innovation by third-parties, in acquisitions; and in others using its services, such as its maps and payments services. Startups don't have patent portfolios large enough to protect their work.

Google could use its clout to protect the work of startups from legal challenges. Or it could use its IP to attack startups that might challenge its revenues.

It's a double edged sword and it'll be interesting to see how it is used.

But will Google win its $900m bid?

What puzzles me is why did Google disclose its bid? It's taking a big risk in publicizing its interest in the Nortel portfolio. Its bid is now a "stalking horse" in that it acts as a reserve price for an auction that takes place in June.

Google could have waited until the auction and then made its move. By advertising its interest in the patents it reveals areas in its IP portfolio where it is weak.

For example, hedge funds might get together to outbid Google because they could then sell licenses or pursue successful legal challenges and recoup more than their outlay.

Google has done something similar in the past with multi-billion dollar bids for wireless spectrum. It wasn't interested in buying the spectrum itself but it was interested in influencing the market in its favor.

Is Google doing something similar by publicizing the Nortel bid so far ahead of the June auction? Or is it a strategic mistake?

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