Apple Reportedly Bidding to Purchase Nortel Patent Assets

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Reuters reports that Nortel Networks, which filed for bankruptcy in 2009 and is selling off all of its assets, is soliciting bidders for its extensive patent portfolio, and Apple is rumored to be one of the major players looking to acquire the rights as it seeks to beef up its arsenal in the increasingly-litigious mobile space.

Sources expect the sale to draw wireless telecom newcomers Apple and Google, which want to build up patent war chests as they fight incumbents such as Nokia, which want to protect their patent positions, in the courts.

"There has been one round of bidding on those patents, this has been completed," said one source, who declined to be identified because the process is private. "And what Nortel has done is divide the patents up into different lots covering different kinds of technologies."

According to the report, Nortel owns over 4,000 patents estimated to be worth over $1 billion, although Apple would almost certainly not be interested in acquiring all of Nortel's intellectual property assets and would instead focus on only the "buckets" of patents that most directly apply to its mobile products and technologies.

The patents likely to draw the most attention relate to third- and fourth-generation wireless technology such as Long Term Evolution, with device-makers such as Research In Motion, Motorola, and Apple seen as likely bidders.

"It is certainly a very significant stockpile of potent weaponry, and whoever lays their hands on it is going to gain significant advantage," said Alexander Poltorak, chief executive of General Patent Corp, which advises companies on intellectual property strategy and valuation but is not advising anyone involved in the Nortel patent auction.

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 mobile space currently involves a convoluted network of patent lawsuits in which companies are seeking to gain the upper hand over their rivals in the competitive market. Apple, which has been the most-sued technology company over the past several years, is currently suing or being sued by a number of companies, including Nokia, Motorola, HTC, and Kodak.

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