Google exec talks Nortel patent auction loss, calls for patent reform

Posted:
in General Discussion edited January 2014
During an interview on Monday, Google Senior Vice President and General Counsel Kent Walker opened up about the company's loss to Apple in the Nortel patent auction, calling for patent reform in the U.S. as he characterized patents as "government-granted monopolies" that block innovation.



Walker had indicated in April that Google was interested in a collection of 6,000 patents from bankrupt Canadian telecommunications equipment maker Nortel because "many of [Google's] competitors have larger portfolios given their longer histories." The search giant succeeded in placing the initial "stalking horse" bid, but ultimately lost out to a group consisting of Apple and other competitors, including as Microsoft, Research in Motion and Sony.



Shortly after the auction's results were announced, he posted a short statement describing the outcome as "disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition," but declined to comment more on the matter.



In an interview with TechCrunch's MG Siegler on Monday, Walker opened up about the Nortel auction and shared his thoughts on the U.S. patent system. He said the current patent situation in the technology industry "looks like plates of spaghetti" and has become a mess in the past 15 years.



"A patent isn?t innovation. It?s the right to block someone else from innovating,? he said, later adding that "patents are government-granted monopolies." Though the system was originally setup to reward innovation, "that?s not happening here,? he noted.



Regarding the Nortel auction, Siegler questioned whether Google had been serious about the deal, as some industry watchers had suggested the company's decision to bid "mystifyingly precise" mathematical constants meant it had treated the auction as a joke.



?No one bids that kind of money without taking things seriously,? Walker said. ?We think of this situation as a very serious one. There have been questions about our bidding strategy. We did have one."



?That said, the numbers being talked about were dwarfed by the amount finally bid. It?s all kind of moot,? he continued, noting that the $4.5 billion Nortel deal was the "biggest patents sale in the history of the world.?



Though unable to provide a specific figure, Walker said Google had a number in mind for what they were willing to pay for the patents, one that Apple and the so-called "Rockstar Bidco" consortium surpassed. For its part, Apple paid a $2.6 billion share in the Nortel patent acquisition.



"You have to have the discipline not to overbid,? Walker said, adding that there are "other opportunities out there," especially after fierce competition drove the Nortel auction up significantly higher than expected. Both Google and Apple have been suggested as interested in bidding for InterDigital, which claims to have "deeper and stronger" patents than Nortel.



Walker was unable to answer specific questions about the auction because of an NDA, but he did say that Google went into the auction knowing that there would be opportunities and risks for partnerships.



The executive didn't appear particularly worried about the current patent disputes in the technology industry. According to him, patent issues have flared up in the past before settling down. ?They settle into mutual assured destruction,? he said, citing the microprocessor industry and the OEM industry as examples. ?These fights are an arduous and expensive way to do it."



However, industry watchers have expressed concern that the messiness of the patent situation in the wireless industry could drive this expense even higher. For instance, Apple may have paid as much as $600 million to license patents from rival handset maker Nokia, not counting ongoing royalties that the Cupertino, Calif., company has agreed to pay.



Apple recently won a significant initial ruling with the International Trade Commission, which found that HTC had violated two of the company's patents. The iPhone maker's deep pockets have led one patent expert to speculate that Apple is not interested in a licensing deal with HTC. As of the end of June, Apple had a massive $76 billion in cash reserves, almost twice that of Google.



Meanwhile, Google Chairman Eric Schmidt has pledged the company's support to HTC in the ongoing legal battle.
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Comments

  • Reply 1 of 136
    Quote:
    Originally Posted by AppleInsider View Post


    During an interview on Monday, Google Senior Vice President and General Counsel Kent Walker opened up about the company's loss to Apple in the Nortel patent auction, calling for patent reform in the U.S. as he characterized patents as "government-granted monopolies" that block innovation...



    What a lot of ridiculous nonsense.



    A patent cannot "block innovation" by definition. It's embarrassing that he even said that. What a complete moron.



    Besides which, they are the company that singlehandedly forced the price up to ridiculous levels. If not for them the patents would have went for less than half what they eventually did and if they don't belief in patents why did they even bid on them?



    Besides which ... "sore losers" and "sour grapes" comes to mind.
  • Reply 2 of 136
    paxmanpaxman Posts: 4,589member
    Well, you would say that now, wouldn't you? But had your PI bid won the day you probably wouldn't have, is my guess.
  • Reply 3 of 136
    To be honest I really do agree with Google. The software patent system is really sad. And not even just for the reasons Google has stated for the reasons that Google has stated. For example apple was recently sued for its playlist technowledgy and they lost. It gets worst the company is sueing apple once more this time for the use of the playlist technowledgy in ios. Like it or not this system is a joke. Yeah android riped off of some people, but hell everyone has ripped off of someone even apple.
  • Reply 4 of 136
    Quote:
    Originally Posted by AppleInsider View Post


    Shortly after the auction's results were announced, he posted a short statement describing the outcome as "disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition," but declined to comment more on the matter.





    Not saying that there isn't some truth in what he says given the current state of affairs what with patent warfare and rampant patent troll extortion. That said, the quote above really comes across as sour grapes for a company that established the stalking horse bid and constantly extolls the benefits of 'openness' and 'innovation' while stoking the fires of the Android copy machine.
  • Reply 5 of 136
    ylonylon Posts: 43member
    AMEN. Although it sounds like sour grapes, patents are truly the downfall of this nation's innovative core at the moment. If we look at the original intention of patents and how copyright law works, etc. we can see that what we have today is indeed a bastardization of what our nation once was. Elimination of patents would help science, medicine and technology in absolutely amazing ways. Yes, there'd be some very upset people and granted I have deep ties within the patent office, yet it is something that must come to an end for real progress.
  • Reply 6 of 136
    Quote:
    Originally Posted by ylon View Post


    AMEN. Although it sounds like sour grapes, patents are truly the downfall of this nation's innovative core at the moment. If we look at the original intention of patents and how copyright law works, etc. we can see that what we have today is indeed a bastardization of what our nation once was. Elimination of patents would help science, medicine and technology in absolutely amazing ways. Yes, there'd be some very upset people and granted I have deep ties within the patent office, yet it is something that must come to an end for real progress.



    Amen to that!
  • Reply 7 of 136
    Patents are government-granted monopolies . . . for a limited time. And only kind of.



    Patents don't give you the right to produce and sell your invention, they merely allow you to exclude others from producing yours.



    If the US Patent system has become a hindrance to innovation, don't blame the players that play by the rules -- blame the rule-makers. In my opinion, far too many patents are issued because the inventions are obvious combinations of previous works or are trivial variations. When the system is so corrupt that lawyers are paid to get unpatentable ideas patented, it's inevitable that this situation would arise.



    Congress and the courts have allowed this system to become dysfunctional.
  • Reply 8 of 136
    sockrolidsockrolid Posts: 2,788member
    Quote:
    Originally Posted by AppleInsider View Post


    ... "A patent isn?t innovation. It?s the right to block someone else from innovating,? he said, later adding that "patents are government-granted monopolies."



    Stealing ideas is so deeply embedded in Google's culture that they don't know what the word "innovation" means any more. It's as though Google thinks that stealing is OK if they give their perpetual-beta software away for free.



    Patents protect innovation. If you create something original enough to receive a patent, you can profit from that work before anyone else can. Or you can let others use your idea for a fee.



    Without patents, anyone can copy and blatantly steal your idea, then use it in their products with impunity. You have far less incentive to create new ideas. How is that "innovation"?
  • Reply 9 of 136
    Quote:
    Originally Posted by Prof. Peabody View Post


    What a lot of ridiculous nonsense.



    A patent cannot "block innovation" by definition. It's embarrassing that he even said that. What a complete moron.



    Besides which, they are the company that singlehandedly forced the price up to ridiculous levels. If not for them the patents would have went for less than half what they eventually did and if they don't belief in patents why did they even bid on them?



    Besides which ... "sore losers" and "sour grapes" comes to mind.



    He also used the term "open," one of Google's favorite buzzwords.
  • Reply 10 of 136
    john.bjohn.b Posts: 2,716member
    I wonder how Google would feel about "sharing" their patented search and indexing algorithms?
  • Reply 11 of 136
    cloudgazercloudgazer Posts: 2,161member
    Quote:
    Originally Posted by Prof. Peabody View Post


    Besides which, they are the company that singlehandedly forced the price up to ridiculous levels. If not for them the patents would have went for less than half what they eventually did and if they don't belief in patents why did they even bid on them?

    .



    You know perfectly well why, because the only way Google can force Apple to the negotiating table over the patents which it has infringed is by finding/buying a patent which Apple has infringed. The ability to threaten mutually assured destruction is a big part of the modern patent game, and is why non-practicing entities tend to get bigger payoffs than practicing entities - because they can't be hurt by a counter-suit.
  • Reply 12 of 136
    patranuspatranus Posts: 366member
    I wonder if big G would be for patent reform if someone started a search engine company using



    Quote:

    A method assigns importance ranks to nodes in a linked database, such as any database of documents containing citations, the world wide web or any other hypermedia database.



    LOL
  • Reply 13 of 136
    kolchakkolchak Posts: 1,398member
    Quote:
    Originally Posted by ylon View Post


    AMEN. Although it sounds like sour grapes, patents are truly the downfall of this nation's innovative core at the moment. If we look at the original intention of patents and how copyright law works, etc. we can see that what we have today is indeed a bastardization of what our nation once was. Elimination of patents would help science, medicine and technology in absolutely amazing ways. Yes, there'd be some very upset people and granted I have deep ties within the patent office, yet it is something that must come to an end for real progress.



    So if I can't get patent protection to keep others from copying my ideas, what exactly would be my incentive to invent anything?
  • Reply 14 of 136
    Quote:
    Originally Posted by Prof. Peabody View Post


    What a lot of ridiculous nonsense.



    A patent cannot "block innovation" by definition. It's embarrassing that he even said that. What a complete moron.



    Besides which, they are the company that singlehandedly forced the price up to ridiculous levels. If not for them the patents would have went for less than half what they eventually did and if they don't belief in patents why did they even bid on them?



    Besides which ... "sore losers" and "sour grapes" comes to mind.



    The fact that Google placed bids on the patents proves that this guy is talking out his ass and he's being very contradictory.



    Google would have used the patents for defense... nothing to do with innovation.



    Yes... sour grapes exactly.



    ... and, from everything he is saying, it sounds like Google wasn't just trying to drive up the price... it sounds like they were bidding up the price to win... but in the end they still lost... hence the moaning from this guy.
  • Reply 15 of 136
    Quote:
    Originally Posted by ylon View Post


    AMEN. Although it sounds like sour grapes, patents are truly the downfall of this nation's innovative core at the moment. If we look at the original intention of patents and how copyright law works, etc. we can see that what we have today is indeed a bastardization of what our nation once was. Elimination of patents would help science, medicine and technology in absolutely amazing ways. Yes, there'd be some very upset people and granted I have deep ties within the patent office, yet it is something that must come to an end for real progress.



    I hear this a lot but I have yet to hear anyone have a good argument for *why* patents don't fulfil the "original intention." It seems to me that they clearly protect the inventor of a device or process and only do so for a reasonable amount of time.



    Now it's easy to see that *Copyright* on the other hand is way out of control, that the original creators have practically zero sway or say over what happens to their creations and that the entire industry is wildly tilted towards those companies that buy and sell IP as opposed to those individuals that create it. The original artists and writers gets basically nothing or next to nothing and the corporations own all the IP (that they didn't even create!) for something like a hundred years or more. This situation is quite clearly *not* the original intention of the law and quite clearly works almost in complete *reverse* of the way it's supposed to.



    Patent laws on the other hand seem very straightforward to me and do in fact tend to protect the little guy that actually invents the process or whatever. There are cases all the time of inventors making millions off of an invention, sometimes years later. There are almost *no* cases of the same thing happening with copyright law or with books, paintings, drawings, comics, etc.



    When it comes to art and literature, the corporations rule all and the original artists are usually screwed over. When it comes to invention, often the little guy wins.
  • Reply 16 of 136
    Quote:
    Originally Posted by John.B View Post


    I wonder how Google would feel about "sharing" their patented search and indexing algorithms?



    Yeah, I reckon if google is serious in feeling the patent system needs dumping, well they should lead the way.



    Show us Google, release all your IP for everyone to use as they please.



    Let's get some innovation going, especially in search where the patent monopoly of Google seems to have crushed into the mute cries even the most innovative of alternatives.



    No?



    Ahh, so it's a bunch of wahhhhhhhhhh dressed up in utopian ideals. I see
  • Reply 17 of 136
    addaboxaddabox Posts: 12,660member
    Quote:
    Originally Posted by John.B View Post


    I wonder how Google would feel about "sharing" their patented search and indexing algorithms?



    Really. I wish the next time a Google exec starts droning on about open and free someone would ask them which parts of their business that they actually make money on are either.



    Google loves to do ad supported versions of technologies that drive users towards their actual business, personal data harvesting. Of course they want those technologies to be open and free, the more they're used the more data they get, and they don't need to make a cent off the enabling tech.



    So far Google has managed to keep people's attention off their actual business by making a lot of noise about freedom and innovation. I wonder how long they can keep it up?
  • Reply 18 of 136
    Quote:
    Originally Posted by island hermit View Post


    The fact that Google placed bids on the patents proves that this guy is talking out his ass and he's being very contradictory.



    Google would have used the patents for defense... nothing to do with innovation.



    Yes... sour grapes exactly.



    ... and, from everything he is saying, it sounds like Google wasn't just trying to drive up the price... it sounds like they were bidding up the price to win... but in the end they still lost... hence the moaning from this guy.



    Agreed.



    What I meant specifically, was that he said patents curb innovation, but by definition .. "innovation" is doing something entirely new. Ending patents will allow people to *avoid* innovating, not *spur* innovation.



    But yeah, this guy is all over the map if you actually read what he says carefully. It makes almost no sense on any level.
  • Reply 19 of 136
    Quote:
    Originally Posted by island hermit View Post


    The fact that Google placed bids on the patents proves that this guy is talking out his ass and he's being very contradictory.



    Google would have used the patents for defense... nothing to do with innovation.



    Yes... sour grapes exactly.



    ... and, from everything he is saying, it sounds like Google wasn't just trying to drive up the price... it sounds like they were bidding up the price to win... but in the end they still lost... hence the moaning from this guy.



    While I agRee that the patent system is broken, this is nothing but sour grapes on google's part. Google has barely innovated (they have a lot of good people working on a lot of good projects, but hardly anything makes it to s product). the vast majority of their products since gmail are a combination of:



    1) Buying a smaller company doing great work, and releasing their product for free. (this is only possible because their huge marketshare on Internet search and advertising, the latter of which was also bought when they acquired doubleclick allows them to essentially profit of nearly all Internet transactions).

    2) stealing someone else's idea and using their vast resources and entrenched monopoly in Internet properties to bury other companies. We saw the first with android (which also was purchased) copying the iPhone, and the latter with their attempts to kill twitter and Facebook.



    Google is honestly looking more and more like the Microsoft of old, except they wrap themselves in the open and free flag.
  • Reply 20 of 136
    gromitgromit Posts: 37member
    Sounds like Google really hurt not winning the Nortel bidding war.



    And bleatings about openness and innovation because they lost is pathetic.



    How much are they gonna blub when they lose to Oracle for stealing their IP?

    Just because they then "openly" give the stolen property away does not mean it is right (it certainly isn't innovative).
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