Tech superpowers Apple Inc. (AAPL
The Nortel Patents in Question
Canadian telecom giant Nortel Networks went bankrupt in 2009, and a result of its liquidation was the auction of a number of key technology patents. A bidding war emerged for these patents, and eventually a consortium made up of tech titans Apple, Microsoft, BlackBerry, Ericsson, and Sony–which created an organization called Rockstar Bidco–won the auction for the portfolio for $4.5 billion in 2011. The big loser in this auction was Google, which placed a $4.4 billion bid of its own, raising its offer several times along the way before eventually losing out.
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The lucrative patent portfolio includes over 6,000 patents covering a wide range of wireless and other technologies. Rockstar Bidco is now suing Google for just six of the patents, which are in the “associative search engine” family and attack the very core of Google’s mobile advertising strategy.
Google Cries Conspiracy
Just as soon as Rockstar Bidco had won the auction, Google lamented the inevitability of upcoming lawsuits. The company even went so far as to call the Microsoft-Apple alliance a “hostile, organized campaign against Android” (Android is Google’s mobile operating system that runs on billions of phones and tablets around the globe).
Indeed, it is rare to see companies like Apple and Microsoft work together in any major capacity. The two are direct competitors in the PC and mobile markets, and have a longstanding rivalry that stretches back nearly three decades. But Google’s Android platform has grown so quickly (it represents approximately 47% of the global smartphone market), and the company’s aspirations in the mobile space are so grand, that the two rivals felt it prudent to work together to put a dent in Google’s success.
The Historic Lawsuit
Rockstar Bidco has filed its case in the Eastern District of Texas, and names not just Google, but also other tech giants Asustek, HTC, Huawei, LG Electronics, Pantech, Samsung, and ZTE–all of which manufacture mobile devices that use Google’s Android platform–as infringers. The six patents in question were filed between 1996 and 2009 and cover topics like mobile advertising, navigating electronic documents, integrated messaging center, and more.
Google is likely to go on the offensive itself, launching its own countersuits against its detractors. The company owns several patent portfolios as well, giving it plenty of ammunition in the ongoing “patent trolls” war.
Who wins out in the end will probably be a matter of interpretation. All parties involved will likely suffer some collateral damage, and technology experts say these suits, which are often based on vague patents that should not have been awarded by the United States Patent and Trademark Office to begin with, often result in stifling innovation in the tech space.
So when all is said and done, it just may be that consumers are the ones who lose.
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