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    RIM, Not Google, May Benefit More from Nortel Patents

    By
    Clint Boulton
    -
    April 23, 2011
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      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.”

      Clint Boulton
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