Monday, April 4, 2011

Google's Nortel Bid: Why not use RPX?

If Google's goals are purely defensive, why aren't they using a defensive patent pool?

Google announced their bid today for the patent portfolio of Nortel:

But as things stand today, one of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services. 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.

So after a lot of thought, we’ve decided to bid for Nortel’s patent portfolio in the company’s bankruptcy auction. Today, Nortel selected our bid as the “stalking-horse bid," which is the starting point against which others will bid prior to the auction. 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. In the absence of meaningful reform, we believe it's the best long-term solution for Google, our users and our partners.

Google has been reported as a "member" of John Amster's RPX, which provides "defensive patent aggregation services."  This bid, however, appears to be from Google alone, and Google is identifying that path as "the best long-term solution for Google, our users and our partners."

Especially given RPX's planned IPO, it would be interesting to understand Google's rationale for not combining resources with other RPX members to purchase this portfolio, rather than making the purchase solely at the expense of GOOG shareholders.

 

Update 4/5/2011: PriorSmart asserts in this morning's email that: "There are many other rumored bidders including Apple, RPX, IV, and Interdigital."