RIM may challenge Google for Nortel's 4G LTE wireless and other patents because it needs them more as a mobile device maker, analysts agreed. Don't count out Apple, Microsoft or Nokia.
Research in
Motion may not let Google just walk away with Nortel Network's 6,000 wireless
patents for $900 million because the handset and tablet maker needs the
technology more than the search engine, analysts believe.
Google April 4
agreed
to buy wireless networking and other technology patents from Nortel, which
filed for bankruptcy in 2009 and is trying to raise capital to pay off
creditors.
The deal is
structured as a stalking-horse asset sale, which means other companies may bid
for the patents before they are auctioned off this June. RIM is
mulling
whether to outbid Google for the patents and patent applications, according
to
Bloomberg.
RIM won't
confirm it's interested, but it so far seems to be the only phone maker with a
mind to challenge Google for the patent treasure trove.
However, given
the sheer number of patents that include key 4G wireless technology used in
modern smartphones today, Apple, Microsoft and Nokia are also among those who
might bid as much as $1 billion for the patents to trump Google.
RIM, which has
been losing smartphone market share to Google and Apple in the United States,
could use the patents to defend itself in a smartphone sector pockmarked by
patent litigation. Samsung and Apple are the latest to
sue
each other.
Patent defense
is the main reason Google, which is self-admittedly patent-poor, bid for the
Nortel technology.
"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," wrote Kent Walker, senior vice president & general
counsel, in his
blog
post about Google's bid.
Indeed, Google
just lost a $5 million patent-infringement judgment related to Linux and is
fending off a legal salvo from Oracle, which is
suing
the company for copyright infringement over the use of Java technology in
its Android mobile operating system.
Even so,
industry analysts believe RIM requires the technology more than Google.
Analyst Jack
Gold said the Nortel patents would benefit RIM more than Google in the short
term because the technology includes mostly hardware patents best suited for a
hardware maker. RIM's Blackberry smartphones remain popular and its
PlayBook
tablet just hit the market.
"RIM
could use the patents as leverage against competitors who are quick to file
lawsuits, and who could have retaliatory suits filed if RIM owns so much IP
[intellectual property]," Gold told eWEEK. "And it could give RIM
some real advantage as it moves to 4G, which is beginning to look more like a
Wild West show than a single consolidated market with orderly use of IP."
Analyst Rob
Enderle agreed with Gold that RIM would find the patents valuable but
acknowledged that Google is in dire need of IP after missing out on the Novell
and Palm patent pools. Google, Enderle said, is now desperate for some IP to
use to defend against an increasing wave of Android patent litigation.
Still, Gold
said RIM has a huge installed base to protect, new products coming to market
and lots of money to spend. "The patents in addition to their own internal
IP would reinforce their ability to compete," Gold said.
Until Apple,
Microsoft, Nokia or some other phone maker show otherwise, the battle for
Nortel patents lies between RIM, which could make better use of the patents,
and Google, which is now desperate for IP and has $36.7 billion to spend.
"That'll
make this interesting because, somewhere, the future of both companies in
mobile may be connected to who wins this battle," Enderle told eWEEK.
Gartner
Research analyst Ken Dulaney believes the coming auction fights will take a
long time to sort out.
"The only
winners will be the lawyers," Dulaney said. "And it will likely end
up in a patent portfolio where all the members share in the licensing fees.
That is what happened with 3G and will happen here."
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