Google makes $900M opening bid for Nortel's patents

Google (NASDAQ:GOOG) entered a "stalking horse" bid of $900 million for bankrupt Nortel Networks' patent portfolio, setting the stage for what is likely going to be a fierce battle to grab the former technology giant's prized intellectual property. The patent portfolio includes around 6,000 patents, including those related to wireless services, data networking and LTE.

Google, which has been mentioned for months as a potential suitor for Nortel's patents, framed its bid as an attempt to defend itself against frivolous patent lawsuits. The company also reiterated a call for a reform of the patent process.

"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," Kent Walker, Google's senior vice president and general counsel, wrote in a company blog post. "In the absence of meaningful reform, we believe it's the best long-term solution for Google, our users and our partners."

According to news reports, Apple (NASDAQ:AAPL), Huawei and ZTE are among other potential bidders. ZTE confirmed in February that it would bid on the patents.

Nortel filed for bankruptcy in 2009 and has sold itself off in pieces to pay creditors. Ericsson (NASDAQ:ERIC) purchased many of the pieces, including Nortel's core CDMA and LTE businesses.

A stalking horse bid sets a base price for the auction, and a stalking horse bidder usually will get a break-up fee if its bid is unsuccessful. However, the company that wins the stalking horse bid doesn't always wind up winning the auction. Nokia Siemens Networks received the stalking horse bid of $650 million for the Nortel CDMA and LTE assets that Ericsson eventually won for $1.13 billion.

For more:
- see this Google blog post
see this Reuters article

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