Canada-based telecom Nortel went bankrupt in 2009 and sold its biggest asset—a portfolio of more than 6,000 patents covering 4G wireless innovations and a range of technologies—at an auction in 2011.
Google bid for the patents, but it didn’t get them. Instead, the patents went to a group of competitors—Microsoft, Apple, RIM, Ericsson, and Sony—operating under the name “Rockstar Bidco.” The companies together bid the shocking sum of $4.5 billion.
Patent insiders knew that the Nortel portfolio was the patent equivalent of a nuclear stockpile: dangerous in the wrong hands, and a bit scary even if held by a “responsible” party.
Jobs said he would go thermonuclear against Google for ripping off Apple. This seems to be the first megaton payload.
In July, 2011, Nortel decided to auction its patent portfolio in order to raise money in its bankruptcy proceedings. It had some of the basic patents on mobil devices. Google apparently thought it had it in the bag. It had scared off many by stating the bidding would be over $900 million. So it played games with the bids.
Apple ended up forming a consortium (which now includes Microsoft, Blackberry, Ericsson and Sony) to beat the Google/Intel consortium. Apple is the majority partner of the consortium.
Google offered to buy Motorola about a month later (in August 2011), mostly in order to gets its patents to defend itself against the Rockstar patents. So far, those Motorola patents have not been very helpful in fending off lawsuits.
I am not a fan of patents in many cases as they are often used today. But I do have to appreciate how apple and Jobs would use any legal tool to get what they wanted.
Jobs was still alive when this happened. I bet he knew that getting those Nortel patents was the equivalent of pushing the launch buttons. He knew he would not be there to see the result, but he died knowing things were in place.