Apple, Microsoft, 4 others buy Nortel patents for $4.5 billion
A six-company consortium including Apple Inc. and Microsoft Corp. teamed up to acquire Nortel Networks Corp.’s highly coveted mobile technology patents for $4.5 billion.
The team, which also includes BlackBerry maker Research in Motion Ltd., Sony Corp., EMC Corp. and Ericsson, outbid a group led by Google Inc. for a cluster of more than 6,000 patents and patent applications that many consider crucial to the future of mobile computing technologies.
The patents cover wireless technologies used in phones and tablet computers, including 4G data and data networking, semiconductors and optical devices.
The sale of the patents is a coup for the six-company consortium and a big loss for Google, which is known for having a weaker patent portfolio than many of its competitors that has left its mobile operating system, Android, vulnerable to lawsuits. Oracle Corp. recently said it was seeking $2.6 billion from Google in a patent infringement case.
Google’s $900-million bid for the patents was a starting point in a multi-day auction that began Monday. How many other bids were made, and by whom, was not disclosed.
“Following a very robust auction, we are pleased at the outcome of the auction of this extensive patent portfolio,” George Riedel, Nortel’s chief strategy officer and president of business units, said in a statement. “The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world.”
The sale is a big one for Nortel, which is in bankruptcy. The deal is subject to approval from Canadian and U.S. courts. A decision is set to occur during a joint hearing expected to be held July 11, the Toronto-based communications company said.
“Nortel will work diligently with the consortium to close the sale in the third quarter of 2011,” the statement said.
Florian Mueller, an intellectual property analyst writing for the blog Foss Patents, said Google could have afforded to spend more than $4.5 billion for the Nortel patents, but the fact that it didn’t might show it’s not as committed to Android as many might have expected.
“No major industry player is as needy in terms of patents as Google,” Mueller said in a statement. “There are already 45 patent infringement lawsuits surrounding Android and makers of Android-based devices have to pay royalties to dozens of rights holders. Just this week, Microsoft announced that three more Android device makers, in addition to HTC, are already paying royalties on Google’s Android to Microsoft.”
Buying Nortel’s mobile patents wouldn’t have solved all of Google’s Android patent issues at once, but it could have helped tremendously, he said.
“I’m afraid it won’t get a similar opportunity in quantitative and qualitative terms anytime soon,” Mueller said. “It will have to continue to buy up smaller quantities of patents from failed start-ups and similar kinds of sellers.”
