apple, msft, rim and sony win nortel patent bid

[theeedude]

I talked to a friend of mine who is very knowledgeable in IP licensing, being very directly involved in IP deal negotiations at the highest levels, and he said that they overpaid.
I also think one thing people are ignoring are various anti-trust and compulsory licensing laws in EU and US that would limit how these patents can be used to suppress Android. If these patents are indeed essential to LTE operation, and LTE becomes the dominant standard, to the point that a refusal to license on reasonable terms would hurt competition, the consortium would in all likelyhood be compelled to license these technologies to phone makers, and on non-discriminatory terms. Meaning that they cannot charge more for these patents if they are going into an Android phone instead of a WP7 phone.
http://www.ftc.gov/opp/intellect/020522langdoc.pdf

 

[Mopetar]

Considering that there are several 4G Android phones in the market already, it would seem that many of the manufacturers already have licenses for these patents or they would already have been sued.

I think that this move was more about saving money for the companies involved. The only way this hurts Android at all is that companies like HTC and Samsung will continue to have to pay for 4G licenses, whereas RIM and Apple won't, giving them some cost advantage. However other Android manufacturers like SE got in on the deal so it doesn't hurt the third party manufacturers equally.

 

[akugami]

@senseamp

Considering that the patents were suppose to be go for under 2 billion, the price ultimately paid sounds like a huge overpay. However, part of the reasons may be defensive in the case of these patents.

Apple vs Nokia was all about the exact price to be paid to license certain Nokia patents. If Apple had a stronger mobile patent portfolio Nokia certainly wouldn't have asked for such a high price. A price that was higher than what was being charged to others in the mobile industry.

So while the price definitely looks overpriced, it may ultimately save money to Apple and the others both in licensing fees as well as for defensive maneuvers.

 

[Pliablemoose]

Plus the income from licensing is easy money

 

[theeedude]

I think Google just needs more patents in general. But I don't think they specifically need those LTE patents enough to pay $4.5 Billion for them. There are a lot of other patents, including non-Nortel LTE ones that Google can buy with this kind of money. $4.5B can also buy a lot of lobbying for favorable anti-trust and intellectual property legislation.

 

[akugami]

Blog Article on what went down during the auction. Crazy bidding increments at $100 million per. And it's interesting that at the end, Apple partnered with the Rockstar consortium while Google partnered with Intel.

 

[Pliablemoose]

Blog Article on what went down during the auction. Crazy bidding increments at $100 million per. And it's interesting that at the end, Apple partnered with the Rockstar consortium while Google partnered with Intel.

Interesting read, thanks.

I wonder how it'll all shake out. Microsoft seems intent on making Android difficult for manufacturers to use, not sure how this auction fits into that plan, but it does seem as though the handset manufacturers will have a harder time using a free OS, and the Oracle suit seems to have some merit as well.

 

[Mopetar]

The article points out that existing licenses will be honored, which pretty much shuts down any chance of third party manufacturers being sued with these patents. Many of them have already been making 4G devices so they either already license those patents or they're absolutely stupid to release products that were knowingly violating patents.

 

[akugami]

Interesting read, thanks.

I wonder how it'll all shake out. Microsoft seems intent on making Android difficult for manufacturers to use, not sure how this auction fits into that plan, but it does seem as though the handset manufacturers will have a harder time using a free OS, and the Oracle suit seems to have some merit as well.

MS isn't exactly friends with Google even if they cooperate to a certain degree. Much like Apple's relationship with Google where they cooperate on certain projects but at others they are fierce competitors. MS has no love for Android. In fact, MS likely sees Google's Android as having a large part in Windows Mobile's demise. MS views Android with a certain hostility and MS also likely believes they have a solid case that Android is infringing on some of their patents.

If Google had obtained these patents it would help shield anyone who uses Android. Google can "lean" on MS if they pressure Android OEM's too hard. This would likely result in lowered licensing fees if MS has a case at the very least. And if the case was flimsy, MS would think twice about pushing too hard. As it stands, Google can do little. HTC has conceded to MS's pressure and is paying a licensing fee to MS for the use of Android. Ironic considering HTC probably pays nothing to Google. Samsung is in talks with MS and if Samsung agrees to a patent license with MS, then every Android OEM out there will have to pay MS a fee. There's a similar case on Apple's part with Apple suing HTC for patent infringement. Imagine Android OEM's having to pay an Apple tax and an MS tax for the use of Android.

 

[Pliablemoose]

WebOS just got a lot more viable, IMHO...

It'd be awesome if it took off.

 

[Pliablemoose]

And the courts have signed off on the sale.

Now all they have to do is pass the dept of Justice, and it's a done deal.

http://news.cnet.com/8301-27076_3-20078493-248/nortel-patent-sale-gets-court-approval/

 

[alent1234]

not like HTC and Samsung don't have any money. they should have ponied up a few $$$ to buy into the patent pool

 

[Mopetar]

They probably assumed that Google was going to win or that regardless of who won, it wouldn't affect their strategy.

 

[akugami]

They probably assumed that Google was going to win or that regardless of who won, it wouldn't affect their strategy.

I still don't get why a single corporation like MS, Google, and Apple are approved bidders but a consortium making up MS, Apple, RIM, Sony and EMC receives higher scrutiny. Granted the fear is real that Apple and MS uses the Nortel patents as an offensive weapon against Android. The problem is what made them think that if Apple alone (or MS alone) bought the Nortel patents they wouldn't be doing the same thing...

 

[Mopetar]

I think MS was part of a consortium from the start. In the end, there were no individual companies still contending for the patents and even if a single company were to win the bid, it would still be subject to regulatory approval.

From a perspective of having the patents available to the largest number of companies, the auction probably ended in the best way possible and that problem made the approval go through at lot more easily and quickly.

 

[theeedude]

I still don't get why a single corporation like MS, Google, and Apple are approved bidders but a consortium making up MS, Apple, RIM, Sony and EMC receives higher scrutiny. Granted the fear is real that Apple and MS uses the Nortel patents as an offensive weapon against Android. The problem is what made them think that if Apple alone (or MS alone) bought the Nortel patents they wouldn't be doing the same thing...

Because a consortium of MS, Apple and RIM controls much more of the smartphone market than any one company. Plus it looks like 3 companies that are supposed to be competing with each other colluding to pressure a 4th competitor out of business. Anti-trust authorities don't like cartels.

 

[akugami]

Because a consortium of MS, Apple and RIM controls much more of the smartphone market than any one company. Plus it looks like 3 companies that are supposed to be competing with each other colluding to pressure a 4th competitor out of business. Anti-trust authorities don't like cartels.

The problem with that thinking is that Apple and MS aren't doing anything new. They're already against Android. And I don't think you can call it colluding when Sony is part of the Rockstar group and makes Android phones.

It's a done deal and has cleared the courts. I think this really spells trouble for Android. MS seems hell bent on collecting royalties from every Android maker and if they win, it creates an added cost to Android. Android was attractive because there were no licensing fees such as with MS's Windows Mobile. Apple is following the same line suing HTC and will likely sue others over the patents if they win.