Apple Has Outright Ownership of Nortel's LTE (4G) Patents?

Sunday July 3, 2011 7:42 pm PDT by Arnold Kim
Robert Cringely claims to have some details of the deals that were in place for the $4.5 billion acquisition of Nortel's patent portfolio. The patents were ultimately won by a consortium that included Apple. The auction drew interest of many of the major players in mobile today due to Nortel's large portfolio of Long Term Evolution (LTE, also known as "4G") related patents.


Reuters recapped some of the behind the scenes maneuvering amongst the players. The bidding began with 5 different parties: Apple, Intel, Google, a consortium of Ericsson, RIM, Microsoft and EMC, and a consortium led by RPX. As the bidding increased, partnerships formed and Apple joined up with the Ericsson/RIM/Microsoft/EMC consortium. Meanwhile, Intel partnered with Google whose bidding "tapped out" over $4 billion. The patents were ultimately won for $4.5 billion.

Cringely claims that within the consortium were different arrangements for each party. RIM and Ericsson reportedly put up $1.1 billion together and includes "fully paid up" license rights to the portfolio. Microsoft and Sony also put up another $1 billion with unspecified terms, while EMC contributed $400 million for a subset of patents.

Meanwhile, the largest contributor of the consortium was said to be Apple who put up $2 billion "for outright ownership of Nortel's Long Term Evolution (4G) patents as well as another package of patents supposedly intended to hobble Android." Apple obviously has a large interest in LTE/4G for future iPhones and iPads. Apple recently settled with Nokia and agreed to a license of their patents for use in Apple's mobile devices. Nokia is also said to have a significant number of LTE related patents. Ownership of such patents could give Apple leverage and/or provide licensing fees from other mobile manufacturers that offer LTE technology.

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8CoreWhore
112 months ago
Let's not forget, if Apple hadn't developed the iPhone - for years in secrecy, this form factor phone wouldn't exist. If Apple hadn't done the same with the iPad, tablets wouldn't exist.

Samsung, etc, wouldn't know what to do. There'd be nothing to copy.
Rating: 20 Votes
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SandynJosh
112 months ago
It's interesting to me how rapidly Apple has advanced in the phone business.

Four years ago it entered what was called the upper part of the phone market with aspirations of capturing 5%. They had no patents relating to phones per sec. just some UI patents.

Within that first year Apple became the phone to own, and they were only on one network in one country. Now, Apple is greater then 5% worldwide, and a third of the USA market for smart phones. The iPhone 4 and 3GS are the number one and two selling phones, and now Apple owns a portfolio of important communications patents other manufacturers would love to have.

I cannot think of a similar market that has been so rapidly transformed by a new player as the smart phone market. Maybe the tablet market, but nothing else comes to mind.
Rating: 19 Votes
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xxBURT0Nxx
112 months ago

Have you ever used a Samsung Galaxy S2? In case you do, don't be surprised when you sell your iPhone and switch to the Galaxy -- I did. Not only the hardware of the Galaxy is superior to Apple's hardware, the software is also better in every aspect - and unlike iOS, Android does NOT try to restrict the user whenever and wherever possible.

Apple has lost the leadership and no longer has the better products; iOS 5 and iCloud are "me too" designs that basically only implement features that Android has had for a long time now. Since being good is not sufficient when somebody else is better, Apple is now trying pathetic legal games to regain the pole position.

I actually do enjoy android, but the galaxy phones are very similar spec wise to iphones, typically using the same cpu, just different branding.

Jailbreaking also unrestircts apples walls which makes iOS actually usable.... but android is just as hampered. phones are still being released with fryo when there has already been two other versions of android released and ice cream announced.
Rating: 15 Votes
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xxBURT0Nxx
112 months ago
^^ so you think companies should sit back and let their competitors buy the patent set????

That would be a terrible business decision. All of their competitors were bidding on them for the same reasons, would have been stupid to pass on trying to obtain these patents.
Rating: 15 Votes
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NebulaClash
112 months ago

I wonder if Apple would actually make other manufacturers license LTE. I'm not sure how good that would be.


Not Apple's style to do that. This strikes me as a defensive purchase. This is how it would go:

Competitor: "Aha! Pay up, Apple. We own these patents that cover the iPhone!"

Apple: "Don't think so. We own the LTE patents. Nice LTE phone you have there, shame if anything were to happen to it."

Competitor: "Never mind."
Rating: 14 Votes
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PCClone
112 months ago

Have you ever used a Samsung Galaxy S2? In case you do, don't be surprised when you sell your iPhone and switch to the Galaxy -- I did. Not only the hardware of the Galaxy is superior to Apple's hardware, the software is also better in every aspect - and unlike iOS, Android does NOT try to restrict the user whenever and wherever possible.

Apple has lost the leadership and no longer has the better products; iOS 5 and iCloud are "me too" designs that basically only implement features that Android has had for a long time now. Since being good is not sufficient when somebody else is better, Apple is now trying pathetic legal games to regain the pole position.


Samsung makes cheap crap. The vibrant was the worst phone ever. Al they do is copy apple and then make a POS.
Rating: 13 Votes
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8CoreWhore
112 months ago

I'm a fan of Apple, but I think it's pathetic that Apple (or Google) would buy patents to "hobble" their biggest competitor. The iPhone is a better phone because of the competition with Android. I have no problems with them protecting their own intellectual property like they are doing with Samsung and their blatant ripoff of the iPhone. But to buy patents for the sole purpose of hurting the competition is anti-competitive, and wrong IMO.

I do realize that in the end, it's not really Apple's fault and that they are just playing by the rules of the game. If they hadn't ponied up the $2B, then Google would have done the same to "hobble" Apple. So I don't blame Apple entirely, and instead blame the entire environment created by the awful existing system. But in the end, the consumers lose, which sucks.


The "hobble" quote is quoting Cringley, not Apple or anyone else that speaks for Apple. Cringely, MacRumors, etc - do not actually know what patents Apple received, nor do they know what purpose Apple purchased them for yet.

So, to say it was purchased to "hobble" is just an attempt at trolling the internet, link bating, and doesn't contribute positively to the discussion.
Rating: 11 Votes
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840quadra
112 months ago

Why does it make sense for them to have patents for LTE/4G? They aren't a carrier. Are they going to build a 4G network that only Apple devices can use? (That would be in character for them, wouldn't it...?) Or are they just going to sit on them and extract fees for their use, just because they can, and it increases their power in the business? (Oh, right, that's how business works...)

I know I'm skeptical that having these patents in Apple's hands will be a good thing for consumers. Especially given their track record in terms of working with other companies, or the rates they offer their developers and content providers.


Remember the phones themselves need to have radios in them to work on whatever network they are attaching to. If broad patents are issued for those radios in both the phones and towers, than the phone manufacturers would need to have a license, or own the patents to avoid a lawsuit.

I'm still not convinced that our patent system does more good than harm.


I fully agree. IMHO the fact that there are so many lawsuits, judgments, and violations is an indication the system is more broken, than it is useful.
Rating: 10 Votes
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rman726
112 months ago
I'm a fan of Apple, but I think it's pathetic that Apple (or Google) would buy patents to "hobble" their biggest competitor. The iPhone is a better phone because of the competition with Android. I have no problems with them protecting their own intellectual property like they are doing with Samsung and their blatant ripoff of the iPhone. But to buy patents for the sole purpose of hurting the competition is anti-competitive, and wrong IMO.

I do realize that in the end, it's not really Apple's fault and that they are just playing by the rules of the game. If they hadn't ponied up the $2B, then Google would have done the same to "hobble" Apple. So I don't blame Apple entirely, and instead blame the entire environment created by the awful existing system. But in the end, the consumers lose, which sucks.
Rating: 10 Votes
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MorphingDragon
112 months ago

Yes since 2001-2002 apple and google and Twitter and Facebook and intel and AMD have done a lot of innovating. I guess England has ARM. And you guys have nice koalas. :)

Point is, I simply doubt that guy's claims about UK and Australia.


Can't we just write this up as the pointless exaggeration that this is?

I just doubt any "innovation" statistics in general, especially if they're based around patent output. Culture around patents and laws will affect the statistics in a way the statistics wont show or account for.

EG: New Zealand now has a 0% output for software patents. Why? We banned them in 2010. Australia has well defined laws compared to the USA over what is patentable and what isn't. Most of the stuff that flies in America won't fly in Australia.
Rating: 9 Votes

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