3 ms·

Who Won The 6,000+ Nortel Patents? Apple, RIM, Microsoft — Everyone But Google

30 points by BvS 15y ago

tatsuke95 15y ago
Maybe I'm wrong here, but I'm going to assume that Google did its due diligence, came up with a value to bid on the patents (that includes future costs of law suits, royalties owed/earned, as well as new technologies derived from the patents) and made that bid. In that case, what their opponents pay (or perhaps, overpay) is no longer Google's concern. That's the mindset you have to take in an auction.
- chalst 15y ago
  Did Google know who they were bidding against?
  - tatsuke95 15y ago
    That's part of the risk assessment. They would have to account for the fact that competitors would also bid on the patents.
    - chalst 15y ago
      So you think they didn't know?
- spiffworks 15y ago
  Unfortunately, the cost of the lawsuit will be borne by the handset makers and not by Google. The price of these patents is fairly indeterminable because the chilling effect of the almost certainly imminent lawsuits is hard to estimate. Now Google has no choice but to back the OEMs to the hilt and fight this to the death in the courts.
ianterrell 15y ago
It kind of feels like when you're winning in Risk early on and all the other players band together just to destroy you. Sure, it's not against the rules, and it's good strategy, but you still think they're all dicks.
chalst 15y ago
Does the word cartel mean anything to the DOJ? I guess we'll find out. Now, why was EMC in the cartel? My first reaction was that this is the higher margin companies ganging up to defeat the low cost free software strategy. But why would EMC/Cisco want to join in?
- brudgers 15y ago
  Presumably Nortel's patent portfolio contains a significant number of patents which could be applied to networking because Nortel had it's roots as a phone company.
  - tom_b 15y ago
    Exactly - Nortel had a big portfolio of phone switches (the DMS-10 and DMS-100 are the two that leap to mind) and I would assume a rich collection of switch patents as well. Too bad they blew up - can anyone recommend a good write-up about their implosion? I interned there and had a job offer that was rescinded around the time the dot com bust occurred. My recollection is that they heavily leveraged themselves to make a run at beating Cisco in the IP switch market. When everything melted down, they had nowhere to run.
mrich 15y ago
Wow. If there was any proof needed that patents seldom help the "underdog", here it is.
- protomyth 15y ago
  Calling Google the underdog is not quite accurate.
furyg3 15y ago
This seems an awful lot like collusion (IANAL), and if it isn't illegal, it sure feels like it should be. Google should have gotten in on the deal with the rest to pay a bit more and open-source them all.
- protomyth 15y ago
  Licensing groups are pretty common. In manufacturing, it is almost impossible in some areas to build anything without them.
- fleitz 15y ago
  How so? Why should companies be forbidden to purchase property as a group? How is the objective (licensing some patents) illegal? Also, how exactly does one 'open source' a patent? Patents are not modifiable after the application is submitted, and as soon as they are granted the document is viewable by all. As far as I know Google does not license their patents for free, so why would they buy a bunch of patents just to license them for free? Regarding Google and open source, you'd be hard pressed to find a line of open source code from Google for anything that makes them money.
  - furyg3 15y ago
    Yes, but if they are purchasing this property together to use as a weapon against another company... it seems awfully anti-competitive. Similarly, you could make a similar assertion that "companies should be allowed to sell their products at prices they decide", but it's quite another thing if several get together to do this to put another organisation out of business (or drive-up prices). It's anti-competitive and (eventually) bad for everyone. Regarding 'open source', I'm assuming you can buy a patent and put it in the public domain or some similar construction. This may be attractive for a group of companies who are all being blackmailed into licensing. It may even be worth paying a premium for, as it could reduce exposure to risks (licensor changing his mind, competitor buying license and suing, etc).
antihero 15y ago
This is such a pointless and counter-productive war.
tybris 15y ago
One of their mistakes was to publicly announce they were placing a major bid to protect themselves against patent litigation. Their opponents sensed weakness and trashed the party. This will be yet another business case for corporate secrecy.
- suking 15y ago
  Or maybe they had no real interest at all and were instead making a big PR game out of it to get the others to spend more than they would have?
nextparadigms 15y ago
Why didn't Google gather around all the Android manufacturers from the beginning and make a pool with them? Why did they risk losing the patents by going at it alone? It only took Apple to try to bid for them, and they could've beaten Google if they really wanted, simply because they can afford to lose more cash than Google. Google should've considered this from the beginning. And in reality it was even worse, it more allied against them to get the patents, so Apple didn't even have to bother too much for them. I think it was a newbie mistake to not get all Android manufacturers or the whole OHA to pay for them.
- protomyth 15y ago
  I get the feeling that the shake-up at the top had something to do with how uncoordinated they seem in this. It really looks like everyone else decided they didn't really want to spend huge money on something the DoJ was watching. Apple and Microsoft already have patent deals together and had, by accounts, a not so fun experience in video patents. RIM stills has the scars from their last patent war. Heck, Kodak has caused each of these companies problems. I am sure it was one of those "let's form a patent pool" things. Google's behavior with WebM / h.264 probably made them an unsuitable partner, never mind the market share thing.
saalweachter 15y ago
What's the status of the patents in the package? Looking up random patents from a (2006) list of Nortel patents (http://www.nortel.com/corporate/technology/patents/collateral/list_of_nortel_patents_0506.pdf http://www.nortel.com/corporate/technology/patents/collatera...) yields things like "Patent Expired Due to NonPayment of Maintenance Fees Under 37 CFR 1.362" (http://portal.uspto.gov/external/portal/!ut/p/c5/04_SB8K8xLLM9MSSzPy8xBz9CP0os3h3cz9XEzcPIwMLvyALA08jF39LE2cjQwMLU6B8JG55dxNKdBuYEtAdDnItftvxyYPMB8kb4ACOBvp-Hvm5qfqR-lHmCFPcff3dgKa4ebh5BxgZG7gb6UfmpKYnJlfqF-SGRhhkBmQEOioqAgBVda8T/dl3/d3/L0lJSklna21DU1EhIS9JRGpBQU15QUJFUkNKRXFnLzRGR2dzbzBWdnphOUlBOW9JQSEhLzdfRzdORTRGSDIwR01PRjBJMkZIRktQMjMwRzIvWnM3MV81NjE2MDAxNi9zYS5nZXRCaWI!/ http://portal.uspto.gov/external/portal/!ut/p/c5/04_SB8K8xLL...) It's possible that those 6000+ patents contain only a handful which are (a) strategically useful (b) not defunct and (c) won't expire in the next few years. After all, when's the last time Microsoft got a good deal on something?
- cube13 15y ago
  4G LTE technology. That's hugely valuable to everyone in the mobile space.
  - protomyth 15y ago
    Seems like Microsoft, Apple, and RIM would like to have a couple of bargaining chips with the folks who own the rest of the cell patents.
blinkingled 15y ago
MG is happy. It worked for Apple and Google was left out. That's all there is to the post. I naively expected some more details.

30 points by BvS 15y ago

Maybe I'm wrong here, but I'm going to assume that Google did its due diligence, came up with a value to bid on the patents (that includes future costs of law suits, royalties owed/earned, as well as new technologies derived from the patents) and made that bid. In that case, what their opponents pay (or perhaps, overpay) is no longer Google's concern. That's the mindset you have to take in an auction.

chalst 15y ago
Did Google know who they were bidding against?
- tatsuke95 15y ago
  That's part of the risk assessment. They would have to account for the fact that competitors would also bid on the patents.
  - chalst 15y ago
    So you think they didn't know?
spiffworks 15y ago
Unfortunately, the cost of the lawsuit will be borne by the handset makers and not by Google. The price of these patents is fairly indeterminable because the chilling effect of the almost certainly imminent lawsuits is hard to estimate. Now Google has no choice but to back the OEMs to the hilt and fight this to the death in the courts.

ianterrell 15y ago

It kind of feels like when you're winning in Risk early on and all the other players band together just to destroy you. Sure, it's not against the rules, and it's good strategy, but you still think they're all dicks.

chalst 15y ago

Does the word cartel mean anything to the DOJ? I guess we'll find out. Now, why was EMC in the cartel? My first reaction was that this is the higher margin companies ganging up to defeat the low cost free software strategy. But why would EMC/Cisco want to join in?

brudgers 15y ago
Presumably Nortel's patent portfolio contains a significant number of patents which could be applied to networking because Nortel had it's roots as a phone company.
- tom_b 15y ago
  Exactly - Nortel had a big portfolio of phone switches (the DMS-10 and DMS-100 are the two that leap to mind) and I would assume a rich collection of switch patents as well. Too bad they blew up - can anyone recommend a good write-up about their implosion? I interned there and had a job offer that was rescinded around the time the dot com bust occurred. My recollection is that they heavily leveraged themselves to make a run at beating Cisco in the IP switch market. When everything melted down, they had nowhere to run.

mrich 15y ago

Wow. If there was any proof needed that patents seldom help the "underdog", here it is.

protomyth 15y ago
Calling Google the underdog is not quite accurate.

furyg3 15y ago

This seems an awful lot like collusion (IANAL), and if it isn't illegal, it sure feels like it should be. Google should have gotten in on the deal with the rest to pay a bit more and open-source them all.

protomyth 15y ago
Licensing groups are pretty common. In manufacturing, it is almost impossible in some areas to build anything without them.
fleitz 15y ago
How so? Why should companies be forbidden to purchase property as a group? How is the objective (licensing some patents) illegal? Also, how exactly does one 'open source' a patent? Patents are not modifiable after the application is submitted, and as soon as they are granted the document is viewable by all. As far as I know Google does not license their patents for free, so why would they buy a bunch of patents just to license them for free? Regarding Google and open source, you'd be hard pressed to find a line of open source code from Google for anything that makes them money.
- furyg3 15y ago
  Yes, but if they are purchasing this property together to use as a weapon against another company... it seems awfully anti-competitive. Similarly, you could make a similar assertion that "companies should be allowed to sell their products at prices they decide", but it's quite another thing if several get together to do this to put another organisation out of business (or drive-up prices). It's anti-competitive and (eventually) bad for everyone. Regarding 'open source', I'm assuming you can buy a patent and put it in the public domain or some similar construction. This may be attractive for a group of companies who are all being blackmailed into licensing. It may even be worth paying a premium for, as it could reduce exposure to risks (licensor changing his mind, competitor buying license and suing, etc).

antihero 15y ago

This is such a pointless and counter-productive war.

tybris 15y ago

One of their mistakes was to publicly announce they were placing a major bid to protect themselves against patent litigation. Their opponents sensed weakness and trashed the party. This will be yet another business case for corporate secrecy.

suking 15y ago
Or maybe they had no real interest at all and were instead making a big PR game out of it to get the others to spend more than they would have?

nextparadigms 15y ago

Why didn't Google gather around all the Android manufacturers from the beginning and make a pool with them? Why did they risk losing the patents by going at it alone? It only took Apple to try to bid for them, and they could've beaten Google if they really wanted, simply because they can afford to lose more cash than Google. Google should've considered this from the beginning. And in reality it was even worse, it more allied against them to get the patents, so Apple didn't even have to bother too much for them. I think it was a newbie mistake to not get all Android manufacturers or the whole OHA to pay for them.

protomyth 15y ago
I get the feeling that the shake-up at the top had something to do with how uncoordinated they seem in this. It really looks like everyone else decided they didn't really want to spend huge money on something the DoJ was watching. Apple and Microsoft already have patent deals together and had, by accounts, a not so fun experience in video patents. RIM stills has the scars from their last patent war. Heck, Kodak has caused each of these companies problems. I am sure it was one of those "let's form a patent pool" things. Google's behavior with WebM / h.264 probably made them an unsuitable partner, never mind the market share thing.

saalweachter 15y ago

What's the status of the patents in the package? Looking up random patents from a (2006) list of Nortel patents (http://www.nortel.com/corporate/technology/patents/collateral/list_of_nortel_patents_0506.pdf http://www.nortel.com/corporate/technology/patents/collatera...) yields things like "Patent Expired Due to NonPayment of Maintenance Fees Under 37 CFR 1.362" (http://portal.uspto.gov/external/portal/!ut/p/c5/04_SB8K8xLLM9MSSzPy8xBz9CP0os3h3cz9XEzcPIwMLvyALA08jF39LE2cjQwMLU6B8JG55dxNKdBuYEtAdDnItftvxyYPMB8kb4ACOBvp-Hvm5qfqR-lHmCFPcff3dgKa4ebh5BxgZG7gb6UfmpKYnJlfqF-SGRhhkBmQEOioqAgBVda8T/dl3/d3/L0lJSklna21DU1EhIS9JRGpBQU15QUJFUkNKRXFnLzRGR2dzbzBWdnphOUlBOW9JQSEhLzdfRzdORTRGSDIwR01PRjBJMkZIRktQMjMwRzIvWnM3MV81NjE2MDAxNi9zYS5nZXRCaWI!/ http://portal.uspto.gov/external/portal/!ut/p/c5/04_SB8K8xLL...) It's possible that those 6000+ patents contain only a handful which are (a) strategically useful (b) not defunct and (c) won't expire in the next few years. After all, when's the last time Microsoft got a good deal on something?

cube13 15y ago
4G LTE technology. That's hugely valuable to everyone in the mobile space.
- protomyth 15y ago
  Seems like Microsoft, Apple, and RIM would like to have a couple of bargaining chips with the folks who own the rest of the cell patents.

blinkingled 15y ago

MG is happy. It worked for Apple and Google was left out. That's all there is to the post. I naively expected some more details.