Google may be backing out of the bidding war over InterDigital's patents, freeing up the field for other competitors in the auction.
Samsung, Ericsson AB, Intel and HTC are all reviewing InterDigital's data as they consider offers for the company's intellectual property, according to sources. Google at first showed interest in the InterDigital package, but is reportedly no longer interested in the property as a result of its recent $12.5 billion buyout of Motorola Mobility.
InterDigital holds about 8,800 patents covering technology for high-speed mobile networks.
Google may not need the portfolio package because it bought Motorola Mobility Holdings last month for $12.5 billion, gaining 24,000 patents in the deal.
But InterDigital's patents could prove irresistible to companies looking for a ready-made intellectual property package they can use not only to protect themselves in court, but also as ammunition against rivals.
Samsung and HTC, for example, are both entangled in long-running patent battles with Apple, and Interdigital's patents may be useful in further court battles. The two companies and others may also decide to team up against rivals -- particularly Apple -- by forming a consortium to buy InterDigital's patents.
A group of buyers could pool their bidding power and drive up the InterDigital patent sales price, following the example set this summer by a consortium of six companies including Apple, Microsoft and Research in Motion that teamed up to pay a winning bid of $4.5 billion for 6,000 of Nortel's patents.
The Nortel bid brought in a record amount for an intellectual property purchase, but InterDigital's patents may bring in even more money. The King of Prussia, Pa.-based company now has a market value of $3 billion, said analysts at Algorithm Capital and Dougherty & Co., but it may earn $5 billion through the patent sale if the bidding war heats up.
InterDigital last week postponed first-round bids because bidders wanted more time to complete due diligence on the patents. It expects to accelerate the second round of bidding, however, to make up for the delay.
The company that wins the InterDigital action won't only win patents for courtroom protection, but may also take over lucrative licensing agreements. According to Reuters, just over half of the current 3G market pays royalties to InterDigital, including Apple, RIM, Samsung and HTC.
