When Google decided yesterday to bid $900 million for Nortel's patent portfolio yesterday, one natural question asked by some reporters was: Will Microsoft step in and try to block its rival from completing the deal?
But there may be no need. Microsoft, thanks to a 2006 agreement with Nortel, already owns the rights to all of Nortel's patents and will continue to hold those rights even if Google purchases all 6,000 of them.
Microsoft released a statement saying "Microsoft has a worldwide, perpetual, royalty-free license to all of Nortel's patents that covers all Microsoft products and services, resulting from the patent cross-license signed with Nortel in 2006. Microsoft's licensed rights to the patents continue, even when ownership of the patents change hands."
The statement indicates Microsoft is using plenty of Nortel intellectual property within its own product lines. But when I asked Microsoft which products benefit from tne Nortel licensing deal the spokesperson said "Microsoft does not have any other comment or detail to provide on your other questions." Microsoft also would not comment on whether any other components of its 2006 agreement with Nortel are still active.
Microsoft and Nortel announced on July 18, 2006 a "strategic alliance to accelerate transformation of business communications," combining the two companies' products to deliver business phone systems and other components of unified communications.
Microsoft is still pursuing unified communications with its new Lync software, but Nortel is in bankruptcy and in the process of selling off all of its business units. Avaya purchased Nortel's enterprise business unit including the unified communications portfolio, and is a partner of Microsoft's in this market.
But back to Google's attempt to purchase Nortel's patents. Google said this is a defensive measure to prevent others from suing the search giant. "If successful, we hope this portfolio will not only create a disincentive for others to sue Google, but also help us, our partners and the open source community - which is integrally involved in projects like Android and Chrome - continue to innovate," Google said.
One thing Google apparently won't be able to do with the patents is prevent Microsoft from using Nortel intellectual property.