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Patent Wars: DoJ May Take Preemptive Action as Giants Build Stockpiles

Patent Wars: DoJ May Take Preemptive Action as Giants Build Stockpiles

The six companies that scooped up Nortel's patent portfolio may have some explaining to do if the DoJ goes forward with its plan to question them about how they want to use their winnings. In the meantime, Google, which lost out in the Nortel patent sale, may have figured out a strategy to defend itself from any potential litigation against Android. It just purchased 1,000 patents from IBM.

By Erika Morphy
08/02/11 5:00 AM PT

A consortium of six major tech players calling themselves "Rockstar Bidco" won a US$4.5 billion bid for 6,000 Nortel patents in June. The deal closed last week, but all is not said and done, according to a report in The Wall Street Journal. The Department of Justice reportedly intends to ask the consortium members -- Apple, Microsoft, Research In Motion, Ericsson, Sony and EMC -- just what they plan to do with their new patent stash.

Generally speaking, the Nortel patents mainly support 4G and WiFi technologies -- areas that are vitally important to Google, creator of the Android operating system, and virtually every other wireless vendor.

The agency did not respond to the E-Commerce Times' request to comment for this story.

It could be that it fears the portfolio will be used to support patent litigation -- now the weapon of choice among wireless and mobile device providers -- aimed at Google, which lost out to Rockstar Bidco with its $3 billion-plus offer.

Perhaps Google also has this concern in mind. The company just acquired more than 1,000 patents from IBM. Earlier this year, Kent Walker, senior vice president and general counsel for Google, flat out said the company was gunning for the Nortel portfolio for defensive reasons.

The patents Google acquired from IBM are largely concerned with fabrication and architecture of memory and microprocessing chips, servers and routers, relational databases, object oriented programming, and a wide array of business processes, according to SEO by the Sea, which first reported the sale.

Google did not respond to the E-Commerce Times' request for comment.

Where Is Google Vulnerable?

Assessing Google's position or vulnerability regarding Android -- along with its purchase of the IBM portfolio -- is complicated, John Skinner, partner with Michelman & Robinson told the E-Commerce Times.

"The use and development of the Android software and operating system is somewhat convoluted in that it comprises both open source licenses and proprietary intellectual property," he noted.

Any lawsuits aimed at Android software butt heads with the scope and content of such open source licensing, and the presumptively valid current intellectual property that Google has in Android, said Skinner.

Despite the mix of public open source and proprietary technologies, Google does have some vulnerabilities that it clearly hopes the IBM portfolio will patch, he surmised.

"The patents purchased from IBM are perhaps being viewed as applicable to specific portions of the technology that are either not covered by the open source software or the proprietary technologies already owned by Google," Skinner speculated.

How Deep the Ocean

In truth, though, it is difficult to ascertain what is in these portfolios. "I doubt even now the consortium has a complete understanding of what it bought," Casey Griffith, senior partner with Klemchuk Kubasta, told the E-Commerce Times.

Google most likely acquired the portfolio with its own defensive positioning in mind, in his view -- and possibly the hope that it might unearth a patent that could be used offensively.

If the Justice Department is indeed planning to dig deep, "there will be depositions and formal discovery as to what the scope of the portfolio's patent is and what the consortium's intentions will be," Kelly Kubasta, also a senior partner with Klemchuk Kubasta, told the E-Commerce Times, adding that it's possible it might place limitations on what the consortium can do.

"If this group of patents were to be licensed on a nonexclusive basis on fair terms it probably wouldn't be an issue at all," Kubasta said, "but since Google is not part of the consortium and if they are excluded while everyone else is allowed to cross-license -- that is where the problem might be."


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