Tom Sweeney

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UPDATE: Google bids $900M for Nortel’s patent portfolio

Posted by sweens on April 6, 2011


Published on April 4, 2011
Elizabeth Howell

Google Inc. will be the stalking horse bidder for Nortel Network Corp.’s patent portfolio, the last piece of lucrative business standing after the former Ottawa telecom titan went bankrupt in 2009.

The sale, should it pass the muster of United States and Canadian regulatory authorities, would involve around 6,000 patents and patent applications spanning wired, wireless and digital communication technologies, Nortel stated in a release.

“This is an unprecedented opportunity to acquire one of the most extensive and compelling patent portfolios to ever come on the market,” stated George Riedel, Nortel’s chief strategy officer and president of business units. 

The bid will go through both the Ontario Superior Court of Justice and the United States Bankruptcy Court for the District of Delaware along with a request to let other “qualified bidders” submit their offers, Nortel stated. The firm aims to hold the auction in June.

When reached by OBJ, Ottawa patent portfolio firms Wi-LAN Inc. and MOSAID separately said they would not comment on whether they would submit bids.

BlackBerry maker Research In Motion, which has 900 employees in Ottawa, is also pegged as a potential bidder. The Waterloo-based firm did not immediately respond to a query from OBJ.

In a statement on its official blog, Google said that patent lawsuits, an exploding business of late, may “stifle innovation” without reform. The California search-engine firm has already been named in several patent infringement lawsuits in the past year, including from firms Gemalto, NTP Inc. and Oracle.

As such, Google is looking to acquire Nortel’s portfolio to guard against such action in the future. 

“If successful, we hope this portfolio will not only create a disincentive for others to sue Google, but also help us, our partners and the open source community — which is integrally involved in projects like Android and Chrome — continue to innovate,” stated Kent Walker, Google’s senior vice-president and general counsel.

“In the absence of meaningful reform, we believe it’s the best long-term solution for Google, our users and our partners.”

A few weeks ago, Microsoft Corp. picked up around 666,000 web addresses from Nortel that use the now-defunct IPv4 technology.

The $7.5-million deal will allow Microsoft to use these addresses without needing to upgrade to the new standard, IPv6.

The Ottawa tech giant, formerly known as Bell Northern Research, once made up the bulk of the Toronto Stock Exchange at the height of its powers, with a $366-billion market capitalization in 2000.

From that dizzying high, the 95,000-employee firm fell hard from the tech boom as the demand for traditional telecommunications products fell, and several accounting scandals shook Nortel’s reputation.

Nortel filed for creditor protection in January 2009 when its stock price, once trading for $1,600 a share, was at a nickel. Its stock was delisted immediately afterwards.

It has been selling off pieces of its business, as well as its former Carling Avenue property, ever since.

NORTEL SALES

Other major asset sales of Nortel in the past two years:

– March 2009: Israel’s Radware picks up Nortel’s data-switching division for $17.7 million.

– July 2009: Nortel sells its wireless assets to Ericsson for $1.13 billion, and its enterprise solutions business to Avaya Inc. for US$475 million.

– October 2009: Hitachi Corp. buys Nortel’s next-generation packet core network component assets for US$10 million.

– November 2009: Nortel sells its GSM business to Ericsson and Kapsch for US$103 million, and its optical unit to Ciena for $769 million.

– December 2010: Ericsson buys Nortel’s Chinese joint venture for US$50 million.

– February 2010: Nortel directly sells its carrier business to GENBAND for $182 million.

– April 2010: LM Ericsson buys Nortel’s share of its Korean joint venture with LG Electronics for US$242 million.

– September 2010: Swedish wireless giant Ericsson buys Nortel’s multi-switch business for US$65 million. Avaya purchases Nortel’s enterprise solutions unit for US$915 million.

– October 2010: Public Works buys the 370-acre Nortel campus for $208 million.

– March 2011: Nortel sells around 666,000 iPv4 web addresses to Microsoft for US$7.5 million.

http://www.obj.ca/Technology/2011-04-04/article-2398768/UPDATE-Google-bids-900M-for-Nortels-patent-portfolio/1

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