- Associated Press - Monday, April 4, 2011

WASHINGTON (AP) - Google Inc. plans to bid $900 million in cash for Nortel Networks‘ patent portfolio in a bankruptcy auction scheduled for June.

Nortel, the Canadian maker of telecommunications equipment and computer networking gear, has selected Google’s offer as the “stalking horse bid” to serve as the starting point in the bidding process.

Ontario-based Nortel has been selling its operations piece by piece since it filed for bankruptcy protection in Canada and the U.S. in January 2009. Its patent portfolio includes about 6,000 patents and patent applications spanning a broad range of technology, including wireless, data networking and semiconductors.

Google said it hopes Nortel’s patent portfolio will discourage other companies from suing it, and help it continue to innovate in the absence of broad reform of the U.S. patent system. The Senate last month passed legislation that would make the most significant changes to the patent system in more than 50 years.

Google added that it still supports broader reform to put an end to “an explosion in patent litigation, often involving low-quality software patents, which threatens to stifle innovation.”

Many of these lawsuits, Google said, are filed by “people or companies that have never actually created anything” or are “motivated by a desire to block competing products or profit from the success of a rival’s new technology.” A strong patent portfolio, the company said, is the best defense against such litigation.

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