Google Bids $900 Million For Nortel Patents

    April 4, 2011

Although the timing may be coincidental, Larry Page’s new career as CEO of Google has gotten off to an interesting start.  Google announced this morning that it’s bid $900 million for about 6,000 patents and patent applications owned by Nortel.

Before anyone gets too excited: this development shouldn’t signal that Google intends to either branch into telecommunications equipment or sue its biggest rivals out of existence.  Kent Walker, a senior vice president and general counsel for the search giant, described the move as a precautionary measure.

Walker explained on the Official Google Blog, “The tech world has recently seen an explosion in patent litigation, often involving low-quality software patents, which threatens to stifle innovation.  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 then observed, “But 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.”

So Google – with its market cap of about $189 billion – made its bid of $900 million for Nortel‘s patents (the Canadian company is breaking up due to bankruptcy), and that bid will now be the starting point when an actual auction takes place.

Investors seem unimpressed with the maneuver at the moment, sending Google’s stock down 0.61 percent so far today.