Patent protection advocate calls for help in hindering Nortel patent sale

The leader of the Open Invention Network has put out an all-call to help it fight the pending sale of Nortel's patent portfolio to a consortium of vendors led by Apple and Microsoft. Keith Bergelt, CEO of OIN, wants developers and users to step up and share their viewpoints and stories with the Department of Justice investigating the sale. The pending sale is currently in accordance with regulatory approval nevertheless the group hopes to close the deal in the third quarter.

The new owners of the patents

At issue is if the new owners of the patents would use the patents to sue for patent infringement in order to hinder the growth of Android and other up-and-coming open source mobile devices. If so, this could lead to injunctions against Android, or could force companies into paying license fees. Bergelt believes that competitors of Android, particularly Microsoft and Apple, are angling to use patents to create a "tax" on open source mobile platforms. Their fees would be much higher than the cost of licensing Windows Phone 7, he says.

"The license fee is $15 for WP7. These companies are looking for $30/$40/$50 of licensing 'tax' to try and change the behaviors of device makers and carriers. There's a point where Android becomes uneconomic," he told attendees of LinuxCon while a session entitled "Patents and the Latest in Consumer Electronics."

The pending sale

The pending sale, announced in July, includes more than 6,000 patents and patent applications spanning wireless, wireless 4G, data networking, optical, voice, Internet, service provider, semiconductors and other patents, Nortel said. Bergelt says that 2,700 of these are U.S. patents. The consortium beat out Google to win Nortel's nod. Google offered $900 million for the patents in April.

Bergelt says that the price paid for the patents is far more than the licensing revenue they could generate. As a matter of fact, the Nortel patents sold for $4.5 billion and this is more than the total Nortel earned when selling off the products created with those patents. When adding up all of the previous deals for Nortel's four key product groups -- Enterprise, Carrier VoIP (Voice over Internet Protocol), Wireless and Metro Ethernet -- the bankrupt company netted just about $4 billion. Ergo, Bergelt believes these vendors could only want the patents as a weapon to harm Android.

The reason for the concern is that the vendors involved in the consortium are, more often than not, not friends of Android. The consortium consists of Apple, EMC, Ericsson, Microsoft, Innovation In Motion and Sony. Apple reportedly put up half the money toward the purchase. Ericsson said it would contribute $340 million to the transaction. RIM said its portion was about $770 million.

The DOJ hears from the developer

Key to this is if the DOJ hears from the developer, device maker and IT communities about their concerns for open source should the sale proceed. Bergelt says of particular value are stories of coercive behavior, just as threats to developers of losing authorized status, or price increases to users, or any hint that using or working on the Android platform would affect the relationship with any of the companies in the consortium.

These company's intention is "coercing people," Bergelt warned. "Threatening, illegal behavior is illegal behavior." He said Microsoft prefers "working hand in hand in a conspiratorial fashion with companies they understand, like Apple. They would in other words have a duopoly at that time have the gross uncertainty of open source. They don't understand Linux, don't have the capacity to compete long term with Linux platforms."

History of suing be allowed to stockpile patents

Bergelt says that should proprietary vendors with a history of suing be allowed to stockpile patents, the consequences will affect more than Android. "Until MeeGo or webOS mature, mobile Linux is Android. We are looking to build a community of choice. We should make sure that Android is sustainable and not pulled off shelves and stopped from coming into country," he said.

Julie Bort is the editor of Network World's Open Source community. She as well writes the Source Seeker blog, the Odds and Ends blog for Cisco Subnet, and the Microsoft Update blog for Microsoft Subnet. Follow Bort on Twitter@Julie188.