Google suffers major blow in Nortel patent loss
Toronto: Google, which initiated the bidding war for precious Nortel patents in April, has suffered a huge blow with an Apple-led consortium walking away with 6,000 patents for $4.5 billion last week.
The bidding process for 6,000 patents and patent applications began in April, with Google offering a $900-million stalking horse bid.
Apart from Apple, BlackBerry maker Research In Motion (RIM), Microsoft, Ericsson, Sony and EMC make up the winning consortium.
According to analysts, the patent auction is a big blow to Google as the search engine was willing to pay any price to beef up its bank of patents - which is the smallest among major wireless players.
As Google is also involved in more than 45 patent lawsuits - the biggest against any major player - it wanted Nortel patents badly to protect itself against such lawsuits in the future.
Since Nortel-patented technology is used in RIM`s BlackBerry, Apple`s iPhone and Google Android smart phones, the buyer of these patents now get the rights to license this technology to secure royalties and gain market influence in the multi-trillion-dollar technology field.
So with these patents now in the hands of its rivals Apple and RIM, Google could be in trouble in the smart phone market where its Android-powered devices are becoming very popular.
As details of the biggest patent auction in history emerge, Google reportedly opened the bid for the patents with an offer of $1.05 billion. Then it was Google versus Apple till the $2-billion mark.
After that point, Apple joined hands with RIM, Microsoft and others to snatch the patents from Google with their $4.5 billion bid.
The Apple-led consortium has not yet given details of shares of each member, but RIM is reportedly paying $770 million for its share of the patents.
The auction also marks the end of the once mighty Nortel which at its peak was well over $250 billion and employed over 90,000 people worldwide.
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