Tech companies waste cash on patents, claims Schmidt

Google executive chairman Eric Schmidt has slammed Apple, Microsoft and Research in Motion for spending too much cash on buying up patents.

He said that companies should be making new things rather than trying to troll for patents.

Of course, Schmidt might be partaking of a heady brew of the sour grapes. Google had a go at bidding for a collection of strategically vital patents from Nortel that cover wireless, 4G, data networking, internet and semiconductor technologies but did not come up with the readies.

Schmidt told the Allen & Co conference in Sun Valley, Idaho he was worried that the industry had got to the point where it was all about patents and not about innovation.

Google opened the bidding for the more than 6,000 Nortel patents in April with an offer of $900 million but was outdone by a consortium, which together paid $4.5 billion.

Schmidt said that the price exceeded Google’s value threshold and there was no way that anyone was going to get their money back without some cunning plan to re-coup the costs.

He was worried about the consortium’s intent, but is also worried that the other technology companies are likely to go into full scale patent troll rage.

But Schmidt does appear to have a mixed view on patents. While on the one hand having a pop at the consortium for beating this company, on the other he is saying the search engine outfit would not be shy about acquiring other patent portfolios at reasonable prices, while building out its own holdings.

He got a bit cryptic when he said that the “value of patents” had increased a great deal based on data points and there were lots of people that have patents that are available.

Schmidt said that when it came to patents he had a bulky dossier for a man of his size so Google will do well if there is a patent war.