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Google's Patent Problems

marco.org

47 pointsddagradi14 comments

I reject the conclusion that using mathematical constants as bid means Google didn't take the auction seriously: clearly they had set out a limit and bid up to it.

Is there any evidence that Google chose not to bid in because there was no available mathematical constant between the competitors' highest bid and their internal valuation?

I've been thinking the same thing ever since this story broke. I don't think bidding mathematical constants says anything about whether or not google was taking the auction seriously.

One account I read suggested Google made the leaps to constants early (and confused the other bidders with that move), but by the end were simply trading bids in the auction format's $100-million increments until the other side outbid them.

I can respect that; they still ultimately bid up to their reserve. Only earlier, when bidding was below what they expected the final price to be, they sent a geek-macho "we're still in the play-money range, fellas" signal.

The original article doesn't mention mathematical constant at all, just mentions dismissive behavior. Do you think Google was following something like what I proposed in another comment in this thread?

Look at it from the point of view of business, financial, and lawyers familiar with how auctions work. This type of behavior is "weird" and not according to convention. The rebel in a lot folks is ok with this, but it goes against "normal" behavior in these situations. Wearing a pink tutu to the opera might make you feel rebellious, but it likely make other opera goers think less of you. Think of all the times business folks have messed over programmers in stuff that should be a programmer's prevue. An auctioneer would take Google's bids to be crazy or dismissive. You bid the increment, anything else is screwing with others and your shareholders.

I didn't understand what you meant when you said using mathematical constants, so for those who didn't know as well:

http://www.reuters.com/article/2011/07/02/us-dealtalk-nortel...

May be this was Google's algorithm during the auction:

while(bid < lobbying_cost) { bid = getMathematicalConstant(current_bid); }

I've thought the same thing, except lobbying_cost = legal_cost

edit: Although your algorithm is preferable !

After reading through the articles I've seen so far on this, and looking at the information provided I still do not believe that Google will have to worry about the patents in the Nortel package as much as some are saying. People seem to be forgetting that Google’s Android is software, and the bulk of the Nortel package is hardware related. I'm thinking that Android handset manufacturers have more to worry about considering the types of technologies that are being represented in the Nortel package.

That said, as a group they could severely hinder continued success for Microsoft, one of the top spenders from the consortium, which also requires their handsets to continue to sell its Win7 phones. If the total cost of patent royalty cost gets too high they could simply stop supplying Microsoft with phones to put its OS onto.

If I was a handset manufacturer I’d side with Google simply based on the numbers. Samsung and Motorola have fairly large stakes in the continued success of Android handsets with LG and HTC not far behind.

On a side note how many people have realized that Nortel seems to have just made a bunch of money? I’m basing my numbers on loose numbers that I’ve seen so correct me if I’m wrong, but Nortel was $5.8bln in debt, raise $2.8bln in previous asset sales, and now just made another $4.5bln. That looks to me like a $1.5bln they gain after recouping their debt.

I don't think acquiring the patent portfolio had much to do with patents Google actually needed. The idea was just to hold onto enough patents that you could threaten other people when they come for you.

This is what Sun used to do.

Google is DOOMED now that the others have access to these patents seems to be the big headline, but I do not see that being the case unless Google tries to move in areas covered by the Nortel patents.

So while Google did not get these patents that as it stands seem to be unrelated to current Google activities, they did help force the others to pay a premium for them. It looks like they may have helped Nortel gain enough that the company might in fact be able to start anew. $1.5bln in seed money is pretty decent, as long as that does not get liquidated to investors. Interesting none the less.

The headlines are of course exaggerations to sell ads, but LTE is the next step and Android just got a bit more expensive to use. The question is does this reduce the profit for handset manufactures to a point where other OS options are more profitable.

What I don't understand is why Google was interested in LTE patents? LTE patents are hardware patents and any phone manufacturer will use a chip from a vendor who has licensed these technologies. Google should buy Synaptics, Elan Microelectornics etc. which have patents in touch. $4bn can buy lots of patents, Google has to be smart and selective in building their patent war chest to defend Android.

Microsoft's strategy so far seems to be to choke the air out of Android by going after the handset vendors and not Google itself. If they can use the Nortel patents to further this strategy then they could seriously hinder Android's growth by making it too expensive for handset makers to continue to sell Android phones.

Personally I find this collective ganging-up on a disruptive newcomer while shrieking about the sanctity of "innovation" to be one of the most disgustingly disingenuous tactics I've seen in 13 years of working in software. Neither Microsoft nor Apple would be in business today if they hadn't copied their competitors outright and Google is bringing at least as much real innovation to the mobile marketplace as they are. Witness the wholesale appropriation in iOS 5 of Android's superior notification system, for instance.

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