Google bids $900 million for Nortel patents

WASHINGTON—Internet giant Google said Monday it is bidding $900 million to buy the patent portfolio of Canadian technology company Nortel at a bankruptcy auction.

The Mountain View, California-based Google said the move is aimed at protecting the company from potential frivolous patent litigation.

The bid came on Google co-founder Larry Page’s first day as chief executive of the Internet search titan. Page, 38, replaced Eric Schmidt as CEO on Monday.

Nortel said the portfolio includes approximately 6,000 patents and patent applications for wired, wireless and digital communication technologies.

Google’s $900-million bid for Nortel’s portfolio will be the starting bid for the auction, which is expected to take place in June 2011 pending the approval of courts in Canada and the United States.

“The tech world has recently seen an explosion in patent litigation, often involving low-quality software patents, which threatens to stifle innovation,” Google general counsel Kent Walker said in a blog post.

“Some of these lawsuits have been filed by people or companies that have never actually created anything; others are motivated by a desire to block competing products or profit from the success of a rival’s new technology,” Walker said.

“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,” he said.

“Google is a relatively young company, and although we have a growing number of patents, many of our competitors have larger portfolios given their longer histories,” Walker said. “So after a lot of thought, we’ve decided to bid for Nortel’s patent portfolio in the company’s bankruptcy auction.”

He said obtaining the portfolio would “create a disincentive for others to sue Google” and also help open source software projects such as Android and Chrome.