Friday, 1 July 2011

Nortel Auction - Are we looking for more trolls?

The drama surrounding Nortel Patent auction is finally over. As was reported in an earlier blog of mine, Nortel Networks, which used to be one of the major players in wireless communication was auctioning its strong 6,000+ patent portfolio to come out of bankruptcy.

Many big players had shown interest to acquire the rich patent portfolio owned by Nortel. Google, currently dealing with its own set of problems and lawsuits concerning Android, was one of the front runners and had made a bid of USD900 million to acquire Nortel's Patent Portfolio. Other players such as Microsoft were also aggressively bidding for the portfolio. After witnessing quite a few interesting updates, the auction has finally come to an end. Many important online news site including this one have reported that a a consortium of bidding companies has purchased the 6,000+ patents. The consortium includes major players such aApple, Microsoft, Ericsson, EMC Corp., Sony, and Research in Motion. It has been reported that the consortium has payed a whooping sum of USD4.5 billion.

The world of Intellectual Property keeps surprising us time and again, especially when you are least expecting it. The auctioning of Nortel's patent is another fitting example of such surprises. Traditional rivals such as Microsoft, RIM and Apple, who themselves are usually busy filing allegations against each other came together to buy the patent portfolio. Such "strategic partnerships" are impossible to achieve and rare to watch.

Google, on the other hand, has emerged as the "loser" in the race to acquire the patents. A press statement was made by Google that conveyed the disappointment over the outcome of the auction. Google said in an e-mail that “This outcome is disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition,” and "We will keep working to reduce the current flood of patent litigation that hurts both innovators and consumers.

The patent litigation market is currently busy with many lawsuits related to Google's Android technology. Many experts had stated that Nortel's patent would have helped Google in its ongoing battle to defend Android. What is interesting to observed is that Google did not bid more aggressively for the patents. Did Google intentionally not approach the auction more aggressively or was it simply outplayed by the consortium?  If Google believed that Nortel's patent could have helped it to defend the Androids lawsuits, one is forced to believe that it would have bid for the patents more aggressively. Another thought that comes to the mind is with respect to Google's overall approach towards the Android technology. Is Google giving up on the Android technology or does it have some hidden aces and is waiting for the right moment to play the cards.

What if Google had won the auction. With the power of 6,000+ rich patents, would it have gone on to become the next troll? Is the patent litigation market going to witness more lawsuits? Moreover, is there any guarantee that with the consortium winning the auction, we will not witness any trolls from the consortium. How does the consortium plan to use the patent portfolio? One thing is for sure that the coming few months will definitely reveal a few more "surprises" in the patent litigation market especially in the domain of "mobile wars"  

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