This week Google Inc. made a well-publicized bid of $900 million for the patent portfolio of Nortel Networks Corp., once Canada’s largest company by market capitalization. Many people have contacted us to see what our take is on this historic bid.
The deal involved 6,000 US and overseas patents and patent applications. Nortel selected Google’s bid as its stalking horse bid, meaning any other company interested in Nortel’s patent portfolio must first offer more than Google. Like most industry players, we have been following the fate of Nortel and its patent portfolio. We think this development is yet another encouraging affirmation that patents can be treated and traded just like any other asset. By offering such a significant amount for this portfolio, Google seems to be signaling to the marketplace that Nortel’s patents are not only valuable but also important to the company’s current and future business. While no one knows if Google will end up as the winner of Nortel’s many patents, the invention capital market has already reaped a clear benefit from their interest.