In a sign patents are playing an increasing role in protecting marketshare, Apple and a group of other companies paid an ‘unprecedented’ $4.5 billion to keep Nortel patents away from Google. How will the 6,000 patents be used? First stop, sue the pants of Android, experts predict.
Along with Google, Intel comes out on the losing end of an auction which ended with a price three times what experts expected. Along with Apple, Research in Motion, Ericsson, Sony and Microsoft EMC were part of the winning bid. The auction by bankrupt Nortel highlights “the defensive value of intellectual property in the fast-changing telecoms world, where established players are seeking to keep out new rivals,” Reuters reports.
Translation: the patents are all aimed at hobbling Android, which along with Apple has eaten telecom veterans such as BlackBerry-maker RIM for breakfast, lunch and dinner. “The consortium will go out and seek to make a return by prosecuting the other people, particularly the Android camp,” predicts one analyst.
Ironically, Google was given better odds early on for winning the auction, after the Mountain View, Calif. company bid $900 million in April.
The treasure trove of patents could also help Apple in defending increasing lawsuits. If a company sues you for patent infringment, the more patents you own, you can counter with infringement lawsuits of your own, according to the report. Recently, Apple has found itself in court, defending against patent-infringement claims from Samsung and others.
As Apple and Android fight for smartphone marketshare, the Nortel patent library may become important as the struggle potentially moves from retail shelves into courtrooms. As one German-based IP expert told Reuters: “Google lost an unprecedented opportunity to acquire a major bargaining chip.” For this round, at least – advantage Apple.