Google Loses $4.5 Billion Nortel Patent Bid To Apple, Microsoft

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Google's mobile strategy may have hit a setback. The company's bid for patents owned by bankrupt Nortel Networks failed when a consortium of heavyweights bidding against the search giant won.

For Google, winning the bid would have secured patent protection for the Android operating system.

The consortium led by Apple and Microsoft swooped in and agreed to buy the 6,000 patents covering telecommunications technologies -- from Internet services to 4G wireless, optical to data networks -- for $4.5 billion. The winning bid also belongs to EMC, Ericsson, Research In Motion (RIM), and Sony.

Google had originally bid $900 million for the patent portfolio in April.

George Riedel, chief strategy officer at Nortel, called the size and dollar value for this transaction "unprecedented."

Losing the bid means Google doesn't have intellectual property rights for the patents in the portfolio and will need to license them from the consortium. In an email to MediaPost, Kent Walker, senior vice president and general counsel at Google, called the outcome "disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition."

He added the company will continue to work on reducing the flood of "patent litigation that hurts both innovators and consumers."

Google declined to comment on what the loss might mean for advertisers and application developers designing apps running on the Android operating system.

There is an estimated 45 patent infringement lawsuits based on Android, which means makers of Android-based devices must pay royalties to dozens of right holders.

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