Google’s First Bid on Nortel Patents a Transformative Moment?

In a blog post on the Official Google Blog yesterday, Google’s Kent Walker, Senior Vice President & General Counsel, announced that Google had been bidding on Nortel’s remaining patent portfolio and Google’s bid was selected by Nortel as the “stalking Horse bid” in an auction that is tenatively scheduled to take place in June of this year.

A stalking horse bid is an initial bid on the assets of a bankrupt company chosen by the company as a starting point for competing bids from other potential buyers of the company’s assets. The selection of Google’s bid as this starting point doesn’t mean that Google will end up with Nortel’s patents, but it does indicate that the search giant is pretty serious about acquiring them.

Nortel also issued a press release announcing the Stalking Horse Sale Agreement with Google, and we’re told in that annoucement that:

The agreement includes the planned sale of approximately 6,000 patents and patent applications spanning wireless, wireless 4G, data networking, optical, voice, internet, service provider, semiconductors and other patent portfolios. The extensive patent portfolio touches nearly every aspect of telecommunications and additional markets as well, including Internet search and social networking.

Google’s announcement points out two compelling reasons why it would like to acquire Nortel’s patents. One is that a “formidable patent portfolio” would help it stave off bogus or dubious patent litigation. The other is that they see it as a way to “help us, our partners and the open source community” to continue to innovate.

The Nortel press release notes that this sale will cover approximately 6,000 granted patents and pending patent applications. A USTPO patent search through the main public search interfaces the patent office offers shows a little over 5,000 patents assigned to Nortel.

A search through the USTPO assignment database lists 11,800 pending and granted patents, though those are listed under a variety of different business names such as Nortel Networks Corporation, Nortel Networks Group, Nortel Networks Israel LTD, Nortel Networks France (SAS), Nortel Networks Limited. It’s difficult to tell which actual business entities are involved, and a good percentage of the assignments may be listed multiple times under different entity names.

I’ve skimmed through the titles of a few thousand of the patent filings at this point, and while a great many of the patents involved focus upon telecommunications and wireless technologies and processes, there are also a very wide range of other technologies and intellectual property represented including areas involving hardware, software, advertising and business process.

Google has been acquiring a large number of companies in the past year, and more quietly acquiring intellectual property in the form of licensing and purchasing patents. These include patents from Exbilio, B.V., Verizon, Myriad Group, and another 51 patent filings from IBM which I mentioned in my update post on Google’s patents.

As I noted above, there’s no guarantee that Google will end up with the Nortel patents, but presently the USTPO lists the number of assigned patents that Google holds (granted and pending applications) at almost 2,000. Add the 6,000 patent filings from Nortel, and that would be a pretty formidable patent portfolio indeed.

Google announced earlier this year that they are hiring in 2011. If they do acquire Nortel’s intellectual property, they may need to add a significant amount of staff just to go through those patents and see how they can make the most of them.

Will Google still be able to function with the nimbleness of a startup under new CEO Larry Page, with a potential acquisition of the size and scope of the Nortel patent portfolio?

Will the focus of the search giant shift even more towards telecommunications and mobile phones?

In a year or two, when Google is mentioned will we think of our handsets first and search second?


Author: Bill Slawski

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