Hopeful of dissuading further patent lawsuits against its Android partners, Google (NSDQ: GOOG) went public Monday with its intention to bid on a patent library held by bankrupt telecom company Nortel and said it had been selected to open the bidding with a $900 million offer.
“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,” wrote Kent Walker, Google’s general counsel, in a blog post Monday morning. Google’s bid has been designated as the “stalking-horse bid,” which means that other interested bidders will have to use its bid as the starting point for their own bids in an auction that has already been delayed amid rumored interest from companies like Google, Apple (NSDQ: AAPL), and Research in Motion (NSDQ: RIMM), according to a Reuters (NYSE: TRI) report from earlier this year.
Nortel released a statement in which it said Google had bid $900 million for the 6,000 patents in the portfolio, which includes technologies such as LTE, semiconductors, and a laundry list of other mobile technologies. The auction will be held in June 2011, and Nortel invited other bidders to take part in bidding on what it called “one of the most extensive and compelling patent portfolios to ever come on the market.”
Google’s Android partners have been under siege from companies like Microsoft (NSDQ: MSFT) and Apple regarding mobile patents, part of a broader mobile-industry patent scuffle that involves seemingly everyone at this point. Google is also being sued directly by Oracle, which claims that Android infringes on patents for Java held by Sun, which Oracle acquired in 2010.
There’s a competitive angle, of course, as Android continues to gain market share based in part on the free licensing terms Google extends to its partners. Microsoft and others have hoped to warn Android partners that doing business with Google isn’t necessarily free when the specter of patent litigation hangs over one’s head.
But Google was also seen as ripe for a patent offensive given its lack of history in the mobile market, which Walker acknowledged in Google’s post after decrying the current state of patent law. “… As things stand today, 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. 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.” Lawyers for Oracle were said to develop stars in their eyes when they realized how vulnerable Google could be to litigation over the Java patents.
See where Google ranks on our latest list, The paidContent 50: The Most Successful Digital Media Companies In The U.S.