Google has just announced intentions to bid a whopping $900 million on Nortel’s patent portfolio. The stunning development is an effort to prevent patent trolls and competitors with vested interests from filing bogus patent infringement claims, the company said. Nortel, a Canadian telecom company, announced back in June 2009 intentions to sell off all of its business units following a bankruptcy in 2009. Google’s senior VP and general counsel Kent Walker explains:

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. In the absence of meaningful reform, we believe it’s the best long-term solution for Google, our users and our partners.

This is significant on many levels…


Nortel’s patent portfolio is said to count more than four thousand patents worth an estimated $1 billion in total. According to Reuters, the auction process groups patents into six “buckets” covering related technologies. Final bids are due within weeks, sourced told the news gathering organization.

Nortel’s war chest of patents is thought to give bidders a significant competitive advantage, especially in a sue-happy place such as Silicon Valley. Should Google prevail, rival won’t be able to stop the Android march by alleging patent infringement.

This includes browser vendors hoping to stop Chrome dead in its tracks by claiming that open web media project WebM is a patent bomb waiting to explode. Google’s Walker is unapologetic about certain rivals being “motivated by a desire to block competing products or profit from the success of a rival’s new technology.”

It will deter patent trolls as well, which Google defines as the “people or companies that have never actually created anything.” In fact, Nortel patents may give Google a much-needed leverage to sue just about anyone they want.

It was not immediately clear how those patents could relate to litigations involving Apple and other handset makers, especially the Apple vs. Nokia and Apple vs. HTC lawsuits.

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