Google said Monday it is bidding $900 million on the patent portfolio of Nortel, the bankrupt communications technology company.
The Internet search giant couched its bid as a preemptive strike to defend against patent litigation. It has often railed against frivolous patent lawsuits that it says stifle innovation. It has also fought for patent litigation reform.
"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," Kent Walker, senior vice president and general counsel, wrote in a company blog post.
But Google is actually making a defensive –- and some say belated –- move to protect itself in what could become a major area of weakness, analysts say.
"Google has ignored the issue and has been a major laggard in patent ownership," said BGC Partners analyst Colin Gillis. "Any way they can play catch up on patents, they need to."
He's not the only one who thinks so. Florian Mueller pointed that out here. And this ranking doesn't even put Google in the top 50.
Nowhere is Google's vulnerability more evident than in the patent and copyright infringement lawsuit that software giant Oracle brought against Google in August over the Android software that uses technology Oracle picked up when it bought Sun Microsystems.
Sun's Java lets developers write software that works on a variety of computers and systems and runs on mobile devices. Sun held thousands of patents but backed open-source sharing. It cut licensing deals for Java, but also offered free versions. It was often criticized for not making enough money from Java.
Oracle's Chief Executive Larry Ellison called Java "the single most important software asset we have ever acquired." Of all the executives in Silicon Valley, Google Chief Executive Eric Schmidt is more aware than most of the value of Java. He worked at Sun and led its Java development efforts before joining Google in 2001.
James Gosling, the father of Java, called Ellison, "Larry, Prince of Darkness," and did not join Oracle when it bought Sun. He joined, you guessed it, Google instead.
Patent fights are certainly becoming a major factor in mobile. Nokia's deal with Microsoft could help Nokia resolve its patent fight with Apple.
Nokia sued Apple over patent infringement in 2009, alleging that Apple used Nokia patents on wireless technologies like GSM in the iPhone. Apple countersued. But Microsoft has a longstanding partnership with Apple. It made a $150 million investment in the company in 1997 and a cross-licensing deal that has been renewed several times.
Analysts say Google cannot afford to mess around when it comes to Android, which is emerging as a valuable and crucial business. Android software is being used by handset makers and carriers as well as legions of software developers.
"It's a risk factor," Gillis said.
Nortel, the Canadian telephone-equipment maker that filed for bankruptcy protection in 2009, selected Google for a "stalking horse" agreement, Nortel said in a statement Monday. The sale will include patents and patent applications for wired, wireless and digital communications technology.
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Photo: The Google logo is seen at the Google headquarters in Brussels on March 23, 2010. Credit: Virginia Mayo/File/AP Photo