Microsoft Developer

Despite all its money and its running start Google lost the marathon four-day auction this week for Nortel's prized patents.

At close to midnight last night Nortel announced that the winner was the purpose-built consortium - understood to be dubbed Rockstar Bidco - that consisted of Microsoft, Apple, EMC, RIM, Sony and Ericsson.

The sextet is paying $4.5 billion for the 6,000 patents and patent applications that span wireless, wireless 4G, data networking, optical, voice, Internet, search, social networking, service provider and semiconductors and touch nearly every aspect of telecommunications.

If and how they'll divvy up the spoils is unclear.

RIM said it was kicking about $770 million into the pot and Ericsson said it was contributing $340 million. So that means that Microsoft, Apple, EMC and Sony are supplying the other $3.4 billion, less per head than Google's $900 million stalking horse bid that established the auction's floor.

Google was looking to the patents as a defense against the kind of litigation that has been piling up at its door and at the doors of its Android OEMs.

Both Microsoft and Apple are part of that litigation and were probably determined that the patents not fall into Google's hands. Google has very few patents.

Bloomberg reached out to Google general counsel Kent Walker who reportedly e-mailed back the message, "This outcome is disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition. We will keep working to reduce the current flood of patent litigation that hurts both innovators and consumers."

Florian Mueller, the IP analyst who has detailed the 45 patent infringement lawsuits so far surrounding Android, said that "In light of Android's patent problems, it's surprising that Google didn't outbid everyone else. It could have afforded more than $4.5 billion but it doesn't appear to be truly committed to Android."

If they don't say so in public, he thinks that's what Android device makers will conclude.

In a statement, Nortel's chief strategy officer and president of business units George Riedel described the auction as "very robust," adding that "The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world."

The sale will still need Canadian and US court approval. A joint hearing is set for July 11. Nortel said it "will work diligently with the consortium to close the sale in the third quarter."