Apple, Microsoft Win Nortel Patents, Google Out

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The bidding frenzy for Nortel’s patent portfolio is over and a consortium that includes Apple and Microsoft walked away with a prize that includes over 6,000 telecommunication-related patents. Google, however, walked away empty handed.

Nortel said its portfolio included patents and patent applications covering “wireless, wireless 4G, data networking, optical, voice, internet, service provider, semiconductors and other patents. The extensive patent portfolio touches nearly every aspect of telecommunications and additional markets as well, including Internet search and social networking.”

Nortel sells off its patent portfolioConsortium to Nortel: All your patents are belong to us!

The company put its patent portfolio on the auction block after declaring bankruptcy in 2009.

The purchase set the consortium back some US$4.5 billion. Other members of the group include RIM, Sony, EMC and Ericsson.

Missing out on Nortel’s patents is a blow to Google and its Android OS platform. The Internet search giant’s mobile device operating system has already been attacked over patent infringement claims, and expanding its relatively slim portfolio could have put the company in a better position to defend itself or even third-party companies that develop for Android.

The $4.5 billion price tag after bidding seems to have been more than Google wanted to spend, and the price seems to have been something of a surprise to 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,” commented Nortel’s chief strategy officer and Business Units president, George Riedel.

Nortel expects to wrap up the patent sale process with the consortium in the third quarter of 2011 following standard U.S. and Canadian court approval. A joint hearing is expected to be held on July 11.

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And that is why Apple keeps so much cash in the bank: to be able to jump on opportunities like this.


Apple is the wealthiest company in tech, and Microsoft also has plenty of cash.  Once they teamed up, the Nortel patents were theirs for the taking; it was only a matter of whether they would choose to outbid Google, because Google simply doesn’t have the money to outbid Apple alone, much less outbid Apple and Microsoft combined.  Apple and Microsoft choose to pay more than Google could pay; that is the end of that story.

So now Google must defend itself and its Android OEMs with its puny 700 patents, which are largely legally irrelevant to the disputes that Google and its Android OEMs are defending.  So now Google and its OEMs must defend against the Apple, Microsoft, and Oracle infringement suits on the merits, which they may not be able to do.


The good thing is that:

1.  Apple is the actual outright owner of these patents.
2.  These patents includes those necessary for 4G wireless.
3.  The other companies, like Microsoft and RIM, simply paid for full-paid-up licenses to the patents.

This means Apple can use the patents to sue others - who are either trolls suing Apple or copycats xeroxing Apple’s user interface - like Samsung.


Hold on Jameskatt:  We don’t know that Apple is outright owner of these patents.  It could be that Apple own them jointly with others.  Nor do we know exactly what rights Apple purchased I would think that Apple at a minimum purchased rights that allow it to practice the patents.  I also think that Apple probably has the right to sue for infringement against others who didn’t join with it in purchasing the patents.  But since these patents were purchased as part of a consortium, we would have to know the agreement among the members of that consortium, before we know what Apple’s rights are respecting any of the patents.

John Dingler, artist

Of the intellectual property which Apple acquired in association with other members of the consortium, I believe that much of what it acquired is a group of patents related to networking and connectivity, a significant part of the Holy Grail within Jobs’ vision for his devices; In the YouTube video showing him taking questions from the 1989 developers’ conference, I saw him emphatically express disgust with self-contained devices (including the Newton) which, at the time, contained all of the data within the device, having little ability to network, saying that he threw at least a couple of them away.

In another part of the video, he says that his overarching goal is ubiquitous connectivity, hence giving credence to the central importance of the newly won patents from Nortel.

The Canadian Nortel was a significant technology company. Look at it now. It’s core significance now is the billions it has won for its investors as it shuts its doors.

Wonder if the Canadian RIM’s future will similarly unfold.

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