Google's failure to win a bid for 6,000 patents formerly owned by bankrupt telecomms equipment maker Nortel Networks raises doubts about Google's commitment to Android and its large community of developers and device manufacturers, an analyst said on Friday.
Florian Mueller, an intellectual property analyst and blogger, said by email that it was surprising Google, which is rich with cash, didn't outbid a consortium of six companies that offered US$4.5 billion for the Nortel patent portfolio. The portfolio spans wireless technology and related area.
"Google lost an unprecedented opportunity to acquire a major bargaining chip that would strengthen it at the mobile industry's intellectual property negotiating table," Mueller contended. "I'm afraid it won't get a similar opportunity in quantitative and qualitative terms anytime soon."
According to Mueller, there are already 45 patent infringement lawsuits surrounding Android and makers of Android devices. The most prominent is the one taken by Oracle. "In light of Android's patent problems, it's surprising that Google didn't outbid everybody else," he said. "It could have afforded more than $4.5 billion, but it doesn't appear to be truly committed to Android."
Mueller has contended in his blog and in articles he has written for the UK-based Guardian newspaper that Google has generally been too weak in terms of patents it owns to protect Android and a huge evolving ecosystem around it. That ecosystem now includes more than 300 smartphones and tablets made by several prominent manufacturers and supported by thousands of developers large and small.
Google's senior vice president and general counsel Kent Walker issued a statement that the outcome of the Nortel bidding was "disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition." He vowed that Google would "keep working" to reduce the "flood" of patent litigation.
Walker had blogged in April that Google was bidding for the Nortel patents in hopes of creating a disincentive for groups planning to sue Google, its partners and the open source community.
Even if Google has its heart in the right place, Mueller said it will now be left with the option of buying up smaller quantities of patents "from failed startups and similar kinds of sellers" offering patents with little bearing on Android or evolving technologies such as Long Term Evolution wireless, expected to be critical to the growth of Android.
The winning consortium for the Nortel patents, made up of Apple, EMC, Ericsson, Microsoft, Research in Motion and Sony, appears to have purchased the portfolio as a "defensive" move to "clear the market and prevent the patents from being used in the wrong ways."
With Google left out, its patent position is shaky, Mueller contended. "No major industry player is as needed in terms of patents as Google," he said.
The $4.5 billion paid by the consortium for the patent portfolio is slightly more than the $4 billion that Nortel's hard assets have collectively raised.
That $4 billion comprises $2 billion paid by Ericsson for Nortel's CDMA wireless and data switching divisions, the $1 billion Avaya bid for the former Nortel enterprise networking business, the $700 million Ciena paid for the former Nortel Metro Ethernet business, and the $300 million Genband put up for Nortel's VoIP business.
- Additional reporting by Jim Duffy