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Google Gets Sued By The Consortium That Outbid Them For The Nortel Patents

October 31, 2013 - Written By Leonardo Benveniste

This may be filed under lawsuits, but I’m going to file it under fear. Some time ago, Google’s biggest rivals got together to outbid the Mountain View company in the acquisition of the Nortel Patents. Google was winning the bid with $4.4 billion but the consortium of companies outbid them with $4.5 billion, just enough to outbid them. If this was just another bidding war between companies, I wouldn’t mind, that’s normal but in this case it was more than just a business move. The consortium, called Rockstar, is owned by none other than Apple, Microsoft, Blackberry, Ericsson and Sony. Seriously, read that again: Apple, Microsoft and Blackberry got together to outbid Google. That’s more than a business move, that’s fear. Out of the 5 companies, 2 are already out of the serious mobile business, Blackberry and Ericcson are irrelevant in today’s market. Sony is a big partner to Google so it’s weird to see them in this lawsuit. Microsoft is scared that they will never be able to catch up to Google  in mobile market share while Windows Phone is still miles behind Android. Finally, Apple is just being Apple, we know how they are, they lost market share to Android, they lost hardware market share to Samsung and while they’re latest phones and OS got good reviews they lack the innovation that they once had. Basically, Apple is scared and angry and has no idea what to do about it.

Speaking of Samsung, Google is not alone in the lawsuit. Rockstar also sued Samsung, HTC, Huwaei and four other companies besides Google in the U.S. District Court in Texas. The lawsuit is about seven patents regarding technology that matches internet search terms with advertising. As Reuters points out, this is Google’s core business.

After losing the bid, Google bought Motorola for $12.5 billion. Many people thought it was just for the patents, mostly because there was some funny math in the Google-Motorola deal. basically, the amount Google paid for Motorola divided by the amount of patent it acquired gave a price per patent exactly the same as the price per patent Rockstar paid for Nortel. The only difference is that Google got a huge hardware company for free besides the patents and just released one of the best devices in the market, the Moto X.

The lawsuit reads: “Despite losing in its attempt to acquire the patents-in-suit at auction, Google has infringed and continues to infringe,” and Rockstar is aiming for increased damages against Google, as they claim that the infringement is willful.

I have no idea how this will turn out but seeing that Google has been using this kind of technology for ages I don’t see how they can lose here but obviously, I’m not a lawyer. We’ll see how this develops and will keep reporting on it.