Google may have to fend of Canadian firm Research In Motion Ltd (RIM) when it comes to snapping up Nortel Networks Corp.’s patent portfolio, according to Bloomberg news, which says the BlackBerry maker could beat Google Inc.’s $900 million offer.
Nortel went bankrupt back in January 2009 after losing a whopping $5.8 billion during the economic recession. Ever since filing for bankruptcy the firm has been selling off bits of itself in a car boot sale of business units, raising some $3 billion to pay back its creditors. The patent portfolio – which includes several LTE patents – is the last valuable item on auction and is being eyed up with keen interest.
RIM was apparently cajoled into making a bid for Nortel’s some 6000 patents and patent applications by a consortium of tech firms and mobile companies trying to stop Google from getting its hands on them.
The patents are key because they contain bits and pieces of important IP necessary for technology licensed by several phone manufacturers and used in BlackBerry’s, iPhones and Android devices. That means should Google get its hands on them, the firm could conceivably demand royalties from phone manufacturers or use the patents as leverage to get its way.
Google was the first bargain hunter to put in a bid for the Nortel patents, with an auction set for June 20 if a second bidder enters the running with an offer of at least $929 million. Any further bids after that will have to be a minimum of $5 million more.
The question is whether RIM would want to spend that kind of money on a patent portfolio. Of course, some would argue that it could end up being more costly not to, and the firm could always survive on royalty payments from the IP or use the patents as a bargaining tool to cross license technology the firm wants to put in its devices without the risk of being sued.
Indeed, RIM could actually do something with the patents to help itself as a company and give BlackBerry devices a new lease of life in an increasingly Android/iOS world. It would ensure access to other patents the firm could use that others own at low to no cost.
Google, on the other hand, would most likely simply use the patents as a weapon, kept in its arsenal as mutually assured destruction for any mobile firm which would ever dare to sue the firm. Or in other words, “You want to sue us? We have so many patents we will bury you in return.” Thus, the portfolio would be far more strategic as a defense for Google than as something it would actually use to innovate smartphones with.
Google is already in a number of patent battles, so the Nortel portfolio would simply be the firm’s way of shoring up with more weaponry.
In a way, it’s fair to say that both RIM and Google could go after the patents for survival, but on different scales; Google for Android the way we know it – although the neither the firm or the OS is in any danger of disappearing – and RIM for its financial wellbeing and a better future for BlackBerry.
Either way, it’s an interesting one to watch.
