Unintended Consequences Of Google's $900 Million Nortel Patent Bid: Creating New Patent Trolls

A few weeks back, Google got a ton of attention for offering a $900 million bid for a bunch of Nortel patents. Google made it pretty clear that it was seeking these patents largely to keep them out of the hands of someone else who might start suing everyone. However, there may be some unintended consequences. The publicity around Google's role and the size of the bid (which rumors say has already been surpassed by others) has drawn some renewed interest by some companies in "monetizing" their own patents. Greg Sandoval over at News.com has the story of a company called ReQuest, who claims to hold patents (7,577,757 and 7,136,934) on syncing -- and is now sending out letters to companies asking for licensing fees. The letters apparently make it clear that "patent lawyers" are interested in buying up the patents, which is a pretty transparent threat: license up or we'll sue.

But what struck me is how the company's CEO explained to Sandoval why he was suddenly resorting to patent shakedowns:

"We just wanted to open up the patents to the market, especially as the patent market has heated up," Cholnoky said in the phone interview. "Google just offered to pay $900 million for (6,000 patents belonging to Nortel, the bankrupt Canadian telecom-equipment company). Nortel is auctioning them off. So, companies like Google are interested in acquiring patents and I sent the letters to people who might have some interest...we've received lots of calls."

In other words, if Google thinks a bunch of patents are worth $900 million, it's signalling to the world that patents-as-weapons (rather than patents as innovation drivers) are something it will pay for, and that's making more people interested in exploiting (i.e., shaking down) others over a bunch of wasteful patents.

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