Last updated: July 9, 2011 2:00 pm

Google chief voices fears on patents race

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Eric Schmidt, Google executive chairman, has criticised Apple, Microsoft and Research in Motion for spending richly on patents rather than innovating.

His criticisms come a week after those companies beat Google in the bidding for a collection of strategically vital patents from Nortel that cover wireless, 4G, data networking, internet and semiconductor technologies.

“I’m worried and or disappointed that we’ve gotten to this point in the industry,” Mr Schmidt said from the Allen & Co conference in Sun Valley, Idaho, where he spent the week mingling with other technology and media moguls including Facebook chief executive Mark Zuckerberg and Microsoft co-founder Bill Gates.

Google opened the bidding for the more than 6,000 Nortel patents in April with an offer of $900m. After a bidding war ensued, the search group was eventually outgunned by the consortium, which together paid $4.5bn. “The price exceeded our value threshold,” Mr Schmidt said.

“We chose not to bid at that level. I presume people spent $4.5bn to do something with them,” he said of the group that bought the bankrupt communication equipment maker’s patents. “They didn’t just wake up and say ‘oh, we’d like to have this patent portfolio’. I don’t know what their intent is, but we, as a company, worry that this is an attempt to use patents rather than to innovate.”

Google and other technology companies have become increasingly litigious when it comes to patents. Recent patent lawsuits between nearly every major developer of smartphone hardware and software have highlighted the need for groups to have robust patent portfolios.

But Mr Schmidt signalled that Google would not be shy about acquiring other patent portfolios at reasonable prices, while building out its own holdings. “Now that the value of patents appears to have increased a great deal based on these data points, there are lots of people that have patents that are available,” Mr Schmidt said. “We have a lot of patents. If the answer is tonnage, I think we’ll be fine.”

He also said that Google Plus, the search group’s latest attempt to take on Facebook in social networking, is set to become a fundamental part of the company’s strategy across search, maps and online video.

“The whole company is ramping up on top of it,” he said. “The assumption is that everything will move over to using the Plus infrastructure over time.”

Meanwhile on Friday, it was announced Mr Schmidt will testify at a September hearing before the Senate Judiciary Committee’s antitrust sub-committee.

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