Google in Preliminary Buyout Talks with Wireless Patent Holder Interdigital: Report

By Beecher Tuttle July 21, 2011

Google has participated in initial acquisition talks with wireless chip technology company Interdigital to better arm itself in the rapidly escalating patent war between mobile technology providers, sources close to the situation told the Wall Street Journal.

The news of the preliminary discussions comes just after Google failed to acquire thousands of telecom patents auctioned off by bankrupt Nortel. Google was beat out by a consortium of competitors headlined by Apple, Microsoft and Research in Motion, which paid $4.5 billion for around 6,000 patents. The winning bid dwarfed Google's $900 million stalking horse bid.

Purchasing Interdigital would help Google beef up its portfolio of intellectual property and protect its Android mobile platform from being targeted by patent-infringement lawsuits. Interdigital owns a war chest of around 8,800 patents, most of which are related to the telecommunications and wireless industries. The company is said to have a market value of around $3.1 billion, says Reuters.

Although Google is not always directly targeted itself, device makers that license Android are regularly greeted with litigation in regards to the technology running their handsets. Android licensees like HTC, Motorola and Samsung have faced numerous patent infringement lawsuits in recent years from companies like Apple, Microsoft and French digital security firm Gemalto.

The sources told the Journal that Google's interest in the patent holder was peeked after Interdigital acknowledged that its board was looking into “strategic alternatives” for the company.

Although Interdigital declined to comment on the matter, people close to the situation said that the wireless chip company will look for a deal that reflects both the current value of its patent portfolio and the long-term revenue that will be gained from its intellectual property licenses.

Interdigital shares skyrocketed by nearly 30 percent to $69.15 after the Journal article hit the presses.

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Beecher Tuttle is a TechZone360 contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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