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Apple and Google Look for Bigger Mobile Patents To Punish Their Rivals With

Both Apple (AAPL) and Google (GOOG) are in the bidding for the Nortel Networks patents, according to Reuters. The reason is that the patent bludgeoning strategy currently in vogue among wireless communications companies is about to meet the implementation of 4G networks. Own a piece of the fundamental technology pie, and you can both protect your own business interests and punish friend and foe alike.

Increasingly, patents have become a major strategic tool in the wireless industry. See them that way, and you have new interpretations of what is happening in the industry. And it's not an issue only between sworn enemies.

Look at Microsoft (MSFT) suing long-time partner Motorola (MOT). There's an obvious two-pronged strategy:

  1. Sue a hardware vendor using Android and you put pressure on Google.
  2. Put pressure on Motorola, and you potentially can twist arms enough to bring someone back from the Android camp.
Don't underestimate that second angle, no matter how unlikely it might seem. As some are saying, Microsoft needs to win over handset vendors, and not just consumers:
"To ensure Window Phone 7's success, Microsoft must sign up virtually all of the name brand smartphone vendors who deserted Windows Mobile for Android when Microsoft failed to modernize the operating system for three years," says Needham analyst Charlie Wolf. "Microsoft has signed up three of them and has two to go. Google would argue that it has the upper hand in this tussle because it licenses Android for free while Microsoft charges a licensing fee (albeit a small one compared to its PC licensing fees). But Microsoft simply has more at stake."
And so we come back to Apple and Google bidding. Apple was unsuccessful in its bid for Palm, which it largely wanted for the collection of patents. Even Google was interested, but it didn't go big because it didn't know of Apple's attempt.

That brings us back to the current Nortel patent bids. Nortel owns a number of the fundamental 4G patent families, putting it "on par with Qualcomm and Sony Corp," though behind Nokia and Ericsson. Now remember that Nokia has sued various companies, including Apple, over alleged patent infringement on older technologies. Getting a collection of weapons that threaten not the past of mobile, but the future, would be a welcome bit of news. And figure that both Apple and Google would love to send the other tripping.

So, those patent suits that we have been seeing in mobile? Expect them to continue -- with company.

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