Microsoft Fighting To Ensure Google Does Not Gain Patent Leverage, Deterrence

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A week and a half ago, a report said that while the U.S. Department of Justice was looking into the bidding over the Nortel wirelesspatents, they were unlikely to object to Google winning the rights to them. But a new opponent to Google’s bid has arisen. And it’s a familiar foe: Microsoft.

Specifically, Microsoft is objecting to Google being able to purchase the over 6,000 patents without recognizing Microsoft’s existing licensing agreements on the patents, Reuters reports.  As we noted a week and a half ago, these licensing agreements were precisely why Microsoft was the one obvious bidder not competing for the patents — they didn’t think they had to. But the current terms for the winner of the auction doesn’t back up that argument. As of right now, the company that wins the bidding would be able to terminate existing agreements.

Microsoft says that’s unfair. And while they don’t specifically mention Google, it seems pretty clear who they’re thinking about when they write that a termination of existing licensing agreements “would result in considerable disruption in the development and enhancement of various existing technologies and give the prospective purchaser an unfair competitive advantage”.

In other words, “we don’t want the company that we have under our patent thumb to be able to turn the tables”.

And to be fair, Microsoft does have a bit of a point. While they have shown no restraint in using their 17,000+ patents to go after competition— often Google or their partners — Google buying patents that Microsoft has been fairly licensing and using for years could potentially be a huge problem for products both new and old.

But one reason the DoJ is not believed to have a problem with Google’s purchasing the patents is because Google has not shown a desire to aggressively go on the offensive with the patents they do have. (Of course, with under 1,000 patents, they’re hardly in the position to do so.) But with 6,000 more in their pocket, you can bet they would at least be used as a nuclear deterrent, of sorts.

As in, “if you come after us (or our partners) Microsoft, just remember that we can now retaliate”. And that security is exactly why Google is willing to spend billions bidding on the patents in the first place.

Microsoft would undoubtedly also not be pleased if Apple bid and won the patents. But that seems less likely to happen at this point because the DoJ is concerned that Apple may be too aggressive in protecting those patents if awarded them. (As in, they’d use them less for deterrence and more for first-strike capabilities.) Apple is said to be talking to the DoJ to assuage these fears. We’ll see.

HP and Nokia are also said to be opposed to the terms of the auction that would terminate current licensing agreements.