RIM looking at fighting Google for Nortel patents to avoid NTP repeat, analysts say

Research In Motion Ltd.’s (RIM) reported foray into the bidding war for Nortel Networks’ technology patents suggests the BlackBerry maker doesn’t want a repeat of the patent battle it fought with NTP Inc. Bloomberg reported last week that RIM is considering entering the auction for Nortel’s 6,000 wireless technology patents and patent applications. Google Inc. kicked the auction into high gear this month with a stalking horse bid of $900 million US for Nortel’s patent portfolio. The auction is scheduled to begin June 20. Betwen 2001 and 2006, RIM fought patent holding company NTP in court, where NTP accused RIM of infringing a number wireless email network patents. The companies settled through an agreement whereby RIM paid NTP $613 million US. RIM might want to acquire Nortel’s patents to avoid a similar court battle down the road, especially if Google, RIM’s competitor in the wireless market, can win the patent auction. “RIM wouldn’t want to find themselves in a similar situation with Google,” Brownlee Thomas, analyst with Forrester Research Inc., said in an interview. Ronald Gruia, analyst with Frost & Sullivan, agreed. “It’s always a good idea to beef up your IP portfolio,” he said, adding that RIM learned from the NTP lawsuit that patent battles can be costly. Gruia said RIM is likely to incorporate Nortel’s technology ideas into its own products for a competitive edge. In a blog post in early April, Google said it’s bidding for the Nortel patents to defend itself. Pointing out that U.S. patent laws allow “companies that have never actually created anything” to sue those that develop technologies, Google senior vice-president and general counsel Kent Walker wrote that “one of a company’s best defences 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.” But Carmi Levy, an independent technology analyst, said in an interview that Google probably would not simply sit on the Nortel designs. “Extending its reach over the networking technologies that connect wireless devices and services—which essentially lies at the core of the Nortel patents Google is seeking—will allow Google to more easily extend this capability into the mobile space,” he said. Ken Coates, a technology expert and dean of arts at the University of Waterloo, said Google is “looking for their next economy,” or a new revenue stream to continue company growth. In a fight between RIM and Google for Nortel’s technology patents, RIM might hold back on the amount it’s willing to bid, he said, because RIM probably has a better idea than Google about the contents of the patent portfolio. RIM and Nortel, which have served as two of Canada’s research and development powerhouses, would have significant knowledge about one another, he said. “They know what’s not there,” Coates said, noting that RIM would cap its bid at a level commensurate with the perceived value of the portfolio. Google has been on a Canadian buying spree lately, scooping up a number of companies. This month, Google acquired PushLife Inc., a Toronto company that makes software for delivering, sharing and purchasing digital media content via mobile devices. Last year, Google bought Toronto-based Bump Technologies Inc., which developed 3D desktop software. It also purchased Toronto’s SocialDeck Inc., which created social network gaming technology enabling simultaneous game play across multiple mobile devices. “Google is a global company, and Canada is an important market for us. We’ve invested a lot in innovation here, and we’ll continue to do so,” Google spokesman Andrew Swartz said in an email statement. Levy said Google’s appetite for Canadian companies “is testament to the strong technology startup environment we’ve built here. Look no further than places like Waterloo for textbook examples of corporate-education partnership that set the standard for others to follow. There’s a wellspring of talent and entrepreneurship here that hasn’t escaped Google’s—and indeed the entire tech industry’s—attention.” News reports suggest that Google’s PushLife acquisition would support Google’s rumoured interest in developing a digital-content distribution platform to compete with Apple Inc.’s iTunes. Industry observers say it would make sense for Google to enter that market. Gruia and Coates pointed out that iTunes isn’t global, and Google would have the worldwide reach necessary to create a global content-distribution system. Thomas said Google could also leverage its search technology to direct music shoppers to an online Google music store. news@thewirereport.ca

RIM looking at fighting Google for Nortel patents to avoid NTP repeat, analysts say

News | April 20, 2011

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RIM looking at fighting Google for Nortel patents to avoid NTP repeat, analysts say

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