Monday, July 11, 2011

Google's Rivals Accused of Colluding Against Android



The American Antitrust Institute is asking regulators to investigate Nortel's patent sale, suggesting the winning bid to Google's biggest rivals may imply collusion against Android.


The group calling itself Rockstar Bidco, which include Apple, Microsoft and Research in Motion, bought Nortel's trove of patents for $4.5 billion, possibly the biggest intellectual property auction of all time. The sale immediately raised concern from antitrust advocates, since the members of the coalition, mainly Google's rivals, may use the patents to attack Google's Android operating system.
Since group teamed up on the bid, rather than compete against one another, the AAI is suggesting improper practices may be at work. Federal agencies, who qualified the bidders before the auction, are now being called in to review the result of the sale.
The big three Rockstar Bidco firms each have their own OS, which have been losing ground to Google's increasingly-popular Android OS. While also armoring The patent purchase, which arms them against potential infringement lawsuits, may also be used in a calculated move to stave off, or even attack, the Android.
Sony is the only major coalition member that supports Android's OS.
Canadian regulators are also investigating the winning bid to determine if the loss of Nortel's 6,000 patents harms its economy.
Google is worried about the impact of the Nortel patents in the hands of its rivals. The company is especially vulnerable in patent litigation, not having built up a comparable portfolio of patents like many of its rivals.
"This outcome is disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition," said Kent Walker, Google's senior vice president and general counsel.
Before the bidding began, Google set the bar with a "stalking horse" bid of $900 million for the entire portfolio. The portfolio bid ended up selling for nearly five times the initial bid, an indication of the high value for patents dealing with wireless technology like 4G, Wi-Fi, search and social networking.
The sale and resulting inquiry reflect the tech world's increasingly litigious environment, with every major tech company involved in a spate of courtroom battles, even to the possible detriment of business relationships.
For example, Samsung, a major supplier to Apple, is in a heated courtroom battle with Apple, endangering their supplier-customer relationship. Apple is also involved in suits with Android device makers HTC and Motorola, and Oracle seeks more than $6 billion from Google saying Android infringes on Oracle's Java patents.
And for good measure, Microsoft filed suit against Motorola for its Android line.
The bid-winning coalition made no indication with the sale of what it will do with the patents or how they will be split up between them. In addition to providing the companies ammo and defense for future litigation, the patents may even be sold to other companies.
Whatever their eventual use, the sale of the Nortel patents still has some hurdles to clear, especially if this investigation is an indication of the scrutiny it will continue to invite.
BY MARGARET ROCK : mobile media