Google Bids $900M for Nortel Patents, Microsoft Also in the Mix

Google has just announced plans to buy Nortel's 6,000 patents package to protect the company from future litigations, which often involve low-quality software patents.

To prevent some of the lawsuits that are usually filed by companies or persons that haven't actually created any real products, Google is trying to expand its patent portfolio by bidding for Nortel’s, in the company’s bankruptcy auction.

“The tech world has recently seen an explosion in patent litigation, often involving low-quality software patents, which threatens to stifle innovation. Some of these lawsuits have been filed by people or companies that have never actually created anything; others are motivated by a desire to block competing products or profit from the success of a rival’s new technology,” said Kent Walker, Google senior vice president & general counsel.

However, even if Google's move is successful and the company adds Nortel's 6,000 patents to its own portfolio, the search giant will have to share it with Microsoft.

According to a Microsoft spokesperson, talking to GeekWire, the company has signed a cross-licensing agreement with Nortel in 2006, which is not going to be altered even after Nortel's patents change ownership.

“Microsoft has a worldwide, perpetual, royalty-free license to all of Nortel’s patents that covers all Microsoft products and services, resulting from the patent cross-license signed with Nortel in 2006,” said the Microsoft official in a statement.

Based on the definition of the word “perpetual,” this means that whoever buys Nortel's patent portfolio will automatically enter into a licensing agreement with Microsoft.

Nortel's patent portfolio includes technologies such as “spanning wireless, wireless 4G, data networking, optical, voice, internet, service provider and semiconductors.”

The extent of the patent access that Microsoft is indebted to share with the entity that buys Nortel's portfolio remains to be seen.

Even though Microsoft claims Nortel's patents, it's still unclear if the agreement between the two companies is dissolved or not after the networking company's bankruptcy.