Google, which has been reeled into the smartphone patent wars via its Android operating system, has another idea: gobble up a huge IP portfolio to use as leverage against would-be plaintiffs. The search giant, represented by Wachtell, Lipton, Rosen & Katz announced Monday that it has made a $900 million “stalking horse” bid for a portfolio of 6,000 patents and patent applications from the bankrupt Nortel Networks Corporation. The patents cover wireless, 4G, data networking, voice, Internet, service provider, and semiconductor technologies, among other things.
Nortel, advised by Cleary Gottlieb Steen & Hamilton, filed the agreement with Google in Delaware federal bankruptcy court. George Riedel, Nortel’s chief strategy officer, said in a statement that the auction is an “unprecedented opportunity to acquire one of the most extensive and compelling patent portfolios to ever come on the market.”
Large patent portfolio purchases are rare but do happen from time to time. Former Kirkland & Ellis partner John Desmarais launched Round Rock Research last year through the acquisition of more than 4,000 patents from Micron Technologies. But Google’s move, unlike Desmarais’s, appears to be a defensive play.
“If successful, we hope this portfolio will not only create a disincentive for others to sue Google, but also help us, our partners, and the open source community–which is integrally involved in projects like Android and Chrome–continue to innovate,” said Google general counsel Kent Walker in a blog post.
Walker said that having a formidable patent portfolio is one of a company’s best defenses against patent litigation. “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,” he said.