Will Nortel Bring down Android?

by Matt Klassen on November 5, 2013

While the Cold War between Android and the tech world in general has been waging for some time now, it looks like the first salvos of what is quickly shaping up to be an all-out, knock-down, drag out tech war have been fired, and what is really interesting about this story is that at the centre of it all is a company that continues to influence the ebb and flow of the mobile industry, even from beyond the grave: Nortel.

As first reported by Reuters, The Rockstar Consortium—comprised of Apple, Microsoft, BlackBerry, Ericsson and Sony—which bought Nortel’s patents back in 2011 after a heated bidding war with Google, is suing the search engine giant for alleged infringement on seven of those very patents. The patent infringement allegations go beyond just Google, however, to the entire Android ecosystem, as the suit has named HTC, Samsung, and almost every other Android operator out there as Google’s partners in crime.

While I’ve noted ad nauseam that the death of Android won’t come quickly, consider this yet another baby step in that direction, particularly as Android partners well-suited for independence—notably Samsung, but also HTC—start to weigh the cost of sticking with the little green droid or striking out on their own.

Patent defence has surely been on Google’s mind over the past few years, its $4.4 billion failed bid for the Nortel patent lot and the subsequent $12.5 billion acquisition of Motorola evidence that the search engine giant has been keen to patch the kinks in Android’s patent armour. But of course such a desire also points to Google’s potential complicity in Android’s patent infringement, a point the Rockstar Consortium has made clear.

“Google placed an initial bid of $900,000,000 for the patents-in-suit and the rest of the Nortel portfolio. Google subsequently increased its bid multiple times, ultimately bidding as high as $4.4 billion,” the filing states. “That price was insufficient to win the auction, as a group led by the current shareholders of Rockstar purchased the portfolio for $4.5 billion. Despite losing in its attempt to acquire the patents-in-suit at auction, Google has infringed and continues to infringe the patents-in-suit.”

Simply put, Google wanted Nortel’s patent trove because it knew it was infringing on the company’s intellectual property. Its failure to acquire the patents means Google and its Android OS continue to infringe on what are now the intellectual assets of the Rockstar Consortium.

The seven patents in question relate directly to “methods of associating Internet search terms with advertisements, the central feature of Google’s ad businesses, such as AdWords,” AppleInsider writer Mikey Campbell explains. Not great news for a company whose entire Android revenue stream is linked to advertising.

The worst case scenario for Google and its Android ecosystem in this whole debacle is likely the start of the death throes for Android, as punitive fines levied against all involved with Android as well as millions in legal costs, being forced to change their business model, and devices being pulled off shelves may be enough to leave Google’s mobile enterprise reeling. Not to mention the requisite long-term licensing deals that would be required to silence the Consortium, deals that would likely take a sizeable chunk out of Android’s profitability.

All of that to say, with the Consortium taking Android to task and Android partners finding their own profitable alternatives, things may turn grim for the little green droid.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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