Dealtalk: Google bid “pi” for Nortel patents and lost
(Reuters) - At the auction for Nortel Networks' wireless patents this week, Google's bids were mystifying, such as $1,902,160,540 and $2,614,972,128. — Math whizzes might recognize these numbers as Brun's constant and Meissel-Mertens constant …
Context & Ripple Effects
Google entered the week as the presumptive buyer: it had put the stalking-horse $900 million bid on Nortel's wireless portfolio in April — a move Techdirt flagged for its risk of minting new patent trolls — and the DOJ cleared its bid on June 14. Bloomberg had reported in April that RIM was weighing a rival offer, so a contested auction was expected.
What was not expected was the bidding style: Reuters reports Google submitted bids built on mathematical constants such as Brun's constant ($1,902,160,540) and the Meissel-Mertens constant, and still lost. Syndicated pickup by the New York Times' DealBook — 'Apple and Microsoft Beat Google for Nortel Patents' — shows how widely the defeat travelled within days.
First-order effects
- The Apple-Microsoft-led consortium takes Nortel's ~6,000 wireless patents, while Google — which wanted the portfolio as a defensive shield for Android — leaves the bankruptcy auction empty-handed despite clearing antitrust review weeks earlier.
- RIM, reported in April to be considering a topping bid, ends up on the winning side rather than competing against Google.
Second-order effects
- Android handset makers now face licensing exposure to patents held by Google's direct OS rivals, sharpening the per-device royalty fight around smartphones.
- The loss pushes Google toward alternative sources of defensive IP — organic filing, partnerships, or acquisitions — rather than bankruptcy-auction purchases.
Third-order effects
- Bankrupt companies' patent estates are becoming strategic weapons in the mobile platform wars: when a distressed seller holds standards-essential IP, OS vendors will pay billions rather than let a competitor control it.
- If losing bidders respond by buying entire patent-holding firms instead of individual portfolios, expect antitrust regulators to shift scrutiny from auction conduct to who is accumulating platform-critical IP.
The trend: Smartphone competition is increasingly fought through acquisitions of bankrupt estates' patent portfolios rather than through products, with each blockbusting sale raising the price of the next.