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Nortel Patents Sold for $4.5 Billion to Consortium Which Includes Apple


Nortel announced that they had concluded an auction to sell of its patents and patent applications to a consortium consisting of Apple, EMC, Ericsson, Microsoft, RIM and Sony. The final winning bid was $4.5 billion and includes over 6,000 patents and patent applications covering wireless, 4G, networking optical, voice internet, semiconductors and more.
"Following a very robust auction, we are pleased at the outcome of the auction of this extensive patent portfolio", said George Riedel, Chief Strategy Officer and President of Business Units, Nortel. "The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world."
We had previously reported that Apple had been interested in buying up the patents off Nortel Networks which had filed for bankruptcy in 2009. The interest in the portfolio was significant due to the broad reach of the patents, especially in the area of wireless networking and LTE technology. Google was also said to be one of the early interested parties by placing an opening bid of $900 million on the patents.

One research firm has estimated that there are 105 patent families deemed essential to deployment of LTE (4G) technology, with Nokia controlling 57 of those families. Ericsson is said to control 14 families, while Nortel, Qualcomm, and Sony are each reported to control about seven families. The companies that are part of the winning bid will presumably provide access to these patents to those companies.

Top Rated Comments

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43 months ago
Oh god, Google and Nokia not listed. Can't wait for the next round of annoying patent wars. :rolleyes:
Rating: 6 Votes
43 months ago
“This outcome is disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition,”

Google's hypocrisy goes to 11.
Rating: 6 Votes
43 months ago
Refreshing to see so many patents being sold to a consortium, hopefully that will cut down on suing, although I'm sure Google is not happy. Microsoft will probably help out Nokia since they are building their phones.
Rating: 5 Votes
43 months ago

Oh god, Google and Nokia not listed. Can't wait for the next round of annoying patent wars. :rolleyes:


Nokia has its own ammunition. Google, on the other hand....
Rating: 4 Votes
43 months ago
Nice to see Apple, Microsoft, and RIM working together. With companies like Apple and Microsoft having significant cash reserves it's interesting they decided not to go it alone. Based on the sharing, I guess this means they really are planning on using these patents for defense rather than offense.
Rating: 3 Votes
43 months ago

So this "consortium" exists as an agreement between major players in the telecom industry to limit the use of these technologies to its members, thereby locking out new competitors?


Nope.

In my great-granddaddy's day they called that a "trust", and passed laws against it.


It's still against anti-trust laws to withhold a group of patents vital to an industry.

That's why the government had a little talk with Apple before they bid in the auction. All the other companies have a long history of licensing patents. Apple does not.

I also suspect this auction is involved with why Apple made a deal for Nokia licenses so suddenly. I think they were showing the government that they could play nice and/or it was a requirement to be a consortium member.
Rating: 3 Votes
43 months ago

I don't understand how does that company declare bankruptcy? Don't companies use their patents -> give them some steady income? Although "bankruptcy" is subjective, they just made 4,5billions, I don't think they're bankrupt any more :)


Bankruptcy in its purest form is having less assets than liabilities. The fact that you own a patent doesnt mean that you are actually earning money for a start. You could have the patent on cold fusion but not earning any money as no-one might be licensing the patent.

Also in terms of bankruptcy - the value attributed to the patent asset might be a lot less than the amount paid at this point. Think of it as a fire sale - for bankruptcy purposes they might value the patent a lot lower than it was eventually sold for.

Finally - although they got $4.5Bn for the patents - they might have had $10Bn in liabilities...
Rating: 3 Votes
43 months ago
with all this patent drama its a wonder tech companies have the time to create products.
Rating: 2 Votes
43 months ago

Apple is now going to start or buy there own cell network. Then they can add and design the network to work with there phone.


You heard it here first.


No we didn't. Others suggested this years ago, and they, too, were ignorantly ignoring that they sell phones throughout the world, not just in the U.S.
Rating: 2 Votes
43 months ago

I had a dream once that there were no patents and companies had to compete on how they implemented and delivered ideas instead of being granted the legal right to hoard ideas in order to prevent (or charge) anyone else from using them. I don't remember any lawsuits in this dream, and everyone seemed to be much happier.


That would be awesome! I can make money hand over fist finding the cheapest foreign labor to implement good ideas that other companies come up with. Oh, wait - those other companies won't come up with any good ideas because it would make more sense for them to wait for someone else to do so and just copying them, thus saving the R&D.

Hmmm. Well, at least the pharmaceutical companies will spend a billion dollars to research a drug that they can never make their money back on due to immediate cloning by generics manufacturers. I mean, what do I care - I probably am not going to get any diseases.

Hey, we may be stuck with lame technologies and no innovation, and we may all die from curable diseases, but at least there won't be any lawsuits.
Rating: 2 Votes

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