Anyone still unconvinced of the stakes involved in the Great Mobile Internet Landgrab needs to consider the names and sums involved in the sale of a bunch of tech patents belonging to the bankrupt Canadian telco Nortel.
An unlikely consortium of tech companies comprised of Apple, Microsoft, Sony, RIM, Ericsson and EMC all had a whip-round to out-bid Google and Intel in an auction that took most of this week to complete.
Until a few weeks ago Google looked set to buy the patents for what was in retrospect a bargain $900 million. But at the last minute both Apple and Intel sought permission from competition authorities to join the bidding, which it was estimated might raise the final price to $1.5 billion. Ha!
"Following a very robust auction, we are pleased at the outcome of the auction of this extensive patent portfolio", said George Riedel, chief strategy officer at Nortel. "The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world."
You don't say, George. Any auction that starts at $900 million and concludes four days later at $4.5 billion certainly qualifies as robust. According to a Reuters report, RIM chipped-in $770 million, while Ericsson grudgingly got its round in to the tune of $340 million. Apple and Microsoft are far bigger companies than Sony and EMC, so we would guess they were in for about a billion each.
How all this will play out in the rock-and-roll world of tech patent litigation, however, remains to be seen. Does Ericsson have the same benefit from this auction as a member of the consortium that paid three times as much? We have to presume not, in which case what, precisely, has it purchased.
Our first impression is that this is seriously bad news for Google and Android, which is already under sustained legal pressure from Apple, Microsoft and Oracle. Does this mean two of its main antagonists now have even more ammo to use against it in patent litigation? Is it not anticompetitive for the three main rival platforms to collaborate in patent disputes against Android? What does this mean for Sony Ericsson Android phones?
All this and more will doubtless be explored in time. Google could have bid higher, but presumably had placed a ceiling on the value of these patents versus the cost of future claims from those patents against Android. It can now set aside the $5 billion it didn't spend on them to spend, on defending itself and/or paying off litigants. Lucky patent lawyers.