It's not _bad_ news, but it's more PR than anything else for the most part. Google's statement that they wont sue anyone unless they are sued first sounds very noble on the surface, but it attempts to present suing as the only way in which one party can do a wrong to the other. As Google is quite weak in patents compared to other big players, it's far more the case that Google would do another party a wrong by infringing on their patents. Naturally the infringed party would then sue at which point Google hoists their flag of "We didn't sue first". But the reality is that they don't have to sue first in order to be the transgressor. Furthermore, the caveat that Google is only extending this offer to Open Source projects, is fine for Open Source projects, but it makes it meaningless in terms of whether this is actually costing Google anything. All their real rivals are Closed Source. There is only two viable contenders in the Open Source world to Google and these are Ubuntu and Firefox OS (potentially). The Mozilla Foundation is currently dependent on Google and Ubuntu is not a rival in the mobile space, only Desktop, which Google does not value highly because they feel they cannot realistically compete with Windows or Mac there. They are rolling out ChromeOS, but I really don't think they see Ubuntu as a threat there. So basically, this gesture from Google costs them nothing. Which again, is no bad thing for Open Source, but diminishes how generous this appears.
There are two other takes on Android - that by Amazon, and that by Samsung. Neither of these will be impacted by this as the distinctions between these and Google's own Android lines, are in the proprietary level of stores, apps, etc.
Is this a bad thing? No. Is it more than PR from Google? Not much.