Google offers stalking horse bid for Nortel patents

Saying it wants to protect itself from patent litigation, Google has submitted a $900 million stalking horse bid for the patent portfolio of bankrupt Nortel Networks.

As was the case when Ciena first bid on the Metro Ethernet Networks division of Nortel, Google’s stalking horse bid merely sets in motion a process by which the approximately 6,000 patents will be sold (see “Ciena becomes Nortel MEN stalking horse”). Nortel will submit Google’s bid for approval to U.S. Bankruptcy Court for the District of Delaware, along with a motion to establish bidding procedures for an auction of the patents. Canada’s Ontario Superior Court of Justice will also weigh in on the bidding procedures.

Should another party express a willingness to top Google’s bid, an auction will ensue. Nortel says Google’s stalking horse bid derived from “a confidential, multi-round bidding process involving several interested companies and consortia from around the world,” so a challenger may not be forthcoming. Regardless of how the final price and buyer are determined, the two bankruptcy courts will also have to approve the final sale.

The patents in question cover optical, wireless, wireless 4G, data networking, voice, Internet, service provider, semiconductors, and other technologies. Nortel says at least some of the patents also could apply to Internet search and social networking, two areas of obvious interest to Google.

However, in a post on the company’s blog this morning, Google Senior Vice President and General Counsel Kent Walker indicated that the search engine behemoth was as interested in protecting itself from patents suits as anything else. After calling for patent reform that would reward innovators over “those who stake bogus claims or file dubious lawsuits,” Walker wrote that “as things stand today, one of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services.”

Added Walker, “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.”