Yesterday Google took a drastic step to reduce the amount of frivolous patent lawsuits by bidding a cool $900 million for the purchase of Nortel’s patent portfolio. This marks the first step that Google, a classically unconventional company, has taken to reduce the number of lawsuits it deals with each year over patents.

In the past, Google has taken steps to change patent laws and has been quite outspoken about the fact that they believe the patent system has not kept pace with the changes in the economy, or the innovative nature of companies in the United States. However, they have done little to protect themselves against the system until now.

This $900 million bid is the “stalking horse” bid for the portfolio. For those of us who are not so familiar with a term… it means that Nortel has accepted the bid, and that it acts as the “minimum” that the portfolio will go for at auction. Imagine the wallets of the holders to those patents!

Now why do they need the patents? Well many intellectual property lawyers would say that a good patent portfolio aids in defense against lawsuits (like Oracle is doing now) and it secures a “protected” path for innovation. These are most noticeable in the Mobile market today (such as Microsoft vs. Barnes & Noble) and Google, to date, has fallen behind the times.

according to ifiClaims Google doesn’t even make the Top 50 mark… however some of the other big mobile players are seated squarely on there. Companies such as IBM, Microsoft, HP, Nokia etc seem to file more patents each year. Now IBM is an oddity in 2010 (filing for over 5896 patents) in that it filed more than EMC, Google, HP, Microsoft and Oracle combined! Now Google is catching up.

If the deal goes through Google stands to gain over “6,000 patents and patent applications covering a broad range of wired, wireless and digital communication technologies” according to Nortel’s press release. It will also be marked as one of Google’s biggest acquisitions (behind DoubleClick, YouTube, and it’s deal with AOL).  It will assist them to fend of the silly US litigious society and allow them to innovate (not that they need a reason or a scapegoat for not doing anything). It could also mark Google’s alignment to other large companies  progress in business. This strengthens the “Let’s not innovate, lets buy” that quite some companies (cough… cough… Oracle) follow today. Maybe Google will start to fall from unconventional to more streamlined in the upcoming years.

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