The summer of 2011 was a crazy time in the world of mobile patents. In fact, by far the craziest ever as Google Trends would tell you. It seemed like every major software company in the world had Android in their cross hair, with Apple, Microsoft and Oracle leading the charge.
There was one particular case that stands out more than the others: the Nortel patent acquisition.
The Nortel patents is what got Google to really chase patent reforms. Having had their $900 million bid selected as the “stalking-horse bid”, Kent Walker, a Senior Vice President and General Counsel at Google penned a blog reiterating the company’s stance on the need for patent reform, and why they were bidding for the patent portfolio.
Today, Nortel selected our bid as the “stalking-horse bid,” which is the starting point against which others will bid prior to the auction. 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.
A little under three months later, Google surprisingly lost the auction. How did that happen? As MG Siegler put it in this column on TechCrunch, it was essentially like a scene out of the James Bond movie Casino Royale. Google was outbidding everyone, with Apple left as the only company left competing against them. When Apple saw that they were going to lose, they decided to back a consortium that had just given up: Rockstar Bidco. With Apple’s support, the consortium offered $4.5 billion.
Google, who at the last moment had been joined by Intel, weren’t ready to go over $4.4 billion. Instead they saw Apple walk away as winners. Who were the companies part of Rockstar Bidco? Microsoft (as you would expect), RIM, EMC, Ericsson and, this is the toughest to take, Sony. Not only was the average cost to each of the winners ($750 million) less than Google’s stalking-horse bid, there was an Open Handset Alliance member on the opposing side.
The loss set in motion even stronger patent-reform lobbying by Google, as well as the eventual Motorola acquisition in August of that year. For a while, it seemed like the entire fiasco had been buried. Unfortunately, this past week, Rockstar Bidco fired the first bullets in what can aptly be described as a “World War” between mobile companies: the consortium mentioned above, against the listed “infringers”: Google, Samsung, ASUStek, Pantech, HTC, LG, Huawei and ZTE.
It looks like we are going to be hearing about this for a very, very long time.