Topic: Enterprise Software

Nortel patent portfolio draws bidding war: Apple vs. Google?

Summary: Nortel Networks said it is putting off the auction for its 6,000 patents and applications due to "significant level of interest." The move sets the stage for a potential Apple vs. Google bidding war.

By Larry Dignan for Between the Lines | June 16, 2011 -- 06:40 GMT (23:40 PDT)

Follow @ldignan

Nortel Networks said it is putting off the auction for its 6,000 patents and applications due to "significant level of interest."

The Nortel auction was moved from June 20 to June 27 to accommodate the increased interest.

In other words, Google got the go-ahead from regulators to bid on Nortel's patents, but may wind up paying a lot more than $900 million if it wants the portfolio.

So what companies are likely bidders for Nortel's patents?

Look no further than the companies that filed objections to Google's effort to bid on Nortel's patents: Apple, Research in Motion, Microsoft, AT&T, Verizon, Hewlett-Packard and Nokia. Of that group, Apple clearly has the financial resources to outbid Google. Microsoft could also bid, but has a strong intellectual property portfolio in its own right. Nokia is another option, but a bidding war could drain cash and attention away from a restructuring.

The other companies would be complete wild-cards. Google has said that it wants Nortel's patent portfolio to defend against lawsuits such as the one Oracle has filed over Android.

Given that Apple just paid Nokia to settle patent litigation, Steve Jobs & Co. may be Google's biggest bidding rival.

Topics: Enterprise Software, Apple, Google, Legal, Nokia

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56 comments

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RE: Nortel patent portfolio draws bidding war: Apple vs. Google?

Every time I see one of these articles, the only thing I can think of is how much I hate patent law.

Aerowind
16 June, 2011 07:04

Reply Vote
- Why? This time is quite fair; Nortel invested in research, got the patents,
 
 @Aerowind: ... and now shareholders/debtholders can get some compensation for that from the highest bidder. As to who can outbid whom, it is irrelevant how much money Apple has versus Google since, obviously, price for the portfolio can not ever go anywhere close to levels where Google's (or most of other mentioned companies') possibilities are limited comparing to Apple. So the highest bidder will be the company that wants the patents more badly. And since Jobs was never big spender, it is highly doubtful that he will agree to buy even the portfolio he wants at overblown price. Jobs is very pragmatic about this. Whether the new owner will be "winner" or not will depend on the price.
 
 DDERSSS
 16 June, 2011 07:12
 
 Reply Vote
 - This is a hard one.
 
 @DeRSSS
 
 This is a hard question for any company to answer. For Google, they have to weigh the cost of the patents and determine if they will be to form a patent moat or be used offensively. There may be cases where any existing licensing will not apply to third parties like HTC or ZTE and Google's investment will not help. Google has to look at the payoff to Google.
 
 Apple is in the same boat. They just paid $600 to $1000 million to Nokia. They will also endup paying some to Motorola (my guess is $200 to $400 million). But they may end up getting $50-$200 million from HTC and/or Samsung. Will having 6000 patents help avoid the Nokias and Motorolas? Will it help enough with the Samsung and HTCs? Will a $1000-$1200 million investment pay off in the next 5-10 years or is it cheaper to just pay fees?
 
 Hard questions.
 
 Bruizer
 16 June, 2011 09:07
 
 Reply Vote
 - Existing patents rarely negate each other, so buying Nortel's portfolio ...
 
 @Bruizer: ... will hardly save money in this aspect. However, these who will *not* own the portfolio, will have to pay license fees to the bidding winner.
 
 DDERSSS
 16 June, 2011 12:28
 
 Reply Vote
- I agree
 
 @Aerowind The purpose for patents is to create innovation. Software patents don't seem to do this (granted Nortel likely has more than software patents here). Good software ideas are going to be created whether or not a patent system exists. Patents might be hampering innovation because we now have a patent minefield that keeps companies and people from developing new ideas for fear of infringement. And to top it off, software patents don't exist to a large extent in many foreign countries, so that means that the minefield affects mostly the U.S. and this could cause the us to start falling behind other countries in innovation.
 
 K B
 16 June, 2011 09:58
 
 Reply Vote
 - RE: Nortel patent portfolio draws bidding war: Apple vs. Google?
 
 @K B Patents are to protect the creator's innovation from being stolen, not to create innovation.
 
 NeoZon@...
 16 June, 2011 10:13
 
 Reply Vote
 - Well, since we've never invented software outside of
 
 a patent system, your argument that good software ideas do not rely on patent protection is patently absurd.
 
 fr_gough
 16 June, 2011 13:07
 
 Reply Vote
 - RE: Well, since we've never invented software outside of
 
 @fr_gough
 
 You are wrong about that.
 
 Software patents were very rare until around 25 or 30 years ago. There were LOTS of very good software ideas developed before the software patent mania got started.
 
 There is a fair amount of historical evidence that patents are unnecessary to promote invention in any area, and the actual experience of the software industry demonstrates that software patents, in particular, are not only not necessary, but a downright drag on the business.
 
 KeithDick
 16 June, 2011 15:27
 
 Reply Vote
 - RE: Nortel patent portfolio draws bidding war: Apple vs. Google?
 
 @NeoZon
 "Patents are to protect the creator's innovation from being stolen, not to create innovation."
 
 And the ULTIMATE PURPOSE of this is to create an incentive to foster patent CREATION.
 Duh.
 
 DeusXMachina
 16 June, 2011 17:38
 
 Reply Vote
- I'll lay money right now that if you were a patent holder
 
 you wouldn't hate patent law at all. No. What you really hate is that patents mean you can't have something for free.
 
 fr_gough
 16 June, 2011 13:06
 
 Reply Vote
 - Socialists believe in sharing everything ever created or invented,
 
 with the idealist view that "it's for the good of all".
 
 What they have a hard time understanding, is that, without patents and IP protections, most innovation would not occur, because, there would be no meaningful compensation, if any at all, for the thinking and hard work and funding, that went into creating any of the innovations.
 
 adornoe
 16 June, 2011 15:04
 
 Reply Vote
 - RE:Socialists believe in sharing everything ever created or invented,
 
 @adornoe@...
 
 Wrong wrong wrong. Most innovation is done to solve problems a business has. The business would have the problems in the absence of patents and still work to solve them. In most businesses, patents are an afterthought -- something a patent lawyer on the corporate staff comes and badgers the inventor about doing AFTER the invention has been done.
 
 There have been times and places (modern times, not ancient history) where patents did not exist, and inventions were created in those places about the same as anywhere else.
 
 KeithDick
 16 June, 2011 15:35
 
 Reply Vote
 - KeithDick: Garbage!
 
 Most innovation is done to solve problems a business has.
 
 Which came first? The chicken or the egg?
 
 An innovation can and does create businesses or ventures. A venture does not exist without some idea or innovation which came before the business idea. The telephone gave birth to Ma Bell, as an example. IBM came about after computing devices were "invented". The internet wasn't invented by a corporation, and it was created through collaboration of government, institutions of higher learning, and people with innovative ideas. From all those aforementioned ideas, and many other thousands, corporations or businesses were created. The need to grow and expand is what causes corporations to undertake new research to expand on the ideas and products which they already own. Once a corporation is established, it's easier to be "innovative", because, those corporations can be self-funding for new research, and news products. I would be the first to propose that, the profit motive is the biggest "innovator" there could be. Money is probably the biggest incentive there is in the world that unleashes the creative juices in people.
 
 The business would have the problems in the absence of patents and still work to solve them.
 
 That sentence is very poorly constructed. What the heck does it mean?
 
 Businesses do create products which can be protected through patents. But, patents can be the creator of a business. It works both ways.
 
 In most businesses, patents are an afterthought -- something a patent lawyer on the corporate staff comes and badgers the inventor about doing AFTER the invention has been done.
 
 In a corporation, the "inventor" is the corporation, even if there were people who came up with the idea. Many of the ideas in a corporation would not have been possible or even thought about, if the corporations were not the stimulus or the driver behind the idea or innovation or product.
 
 There have been times and places (modern times, not ancient history) where patents did not exist, and inventions were created in those places about the same as anywhere else. 
 
 Most inventions have happened in modern times, and that includes from the middle-ages to now. Without corporations, the whole world would still be dependent upon the occassional innovation from somebody with an innovative mind or from some accidental discovery. Without corporations driving most of today's innovations, we would still be somewhere in the middle ages or before.
 
 However, what did your post have to do with my assertion above regarding socialists and their beliefs about sharing patents? You didn't address that point, so, what was the purpose of your post?
 
 adornoe
 16 June, 2011 16:48
 
 Reply Vote
 - RE: Nortel patent portfolio draws bidding war: Apple vs. Google?
 
 @adornoe You have already demonstrated that you don't know crap about the history of Bell Labs, or about socialism. For instance, socialism says NOTHING about "sharing everything ever created or invented", a purely straw man argument. Care to differ? Provide a citation re: socialism and patent law. As for the rest of your garbage it is all summed up by your choice of analogy. "Which came first? The chicken or the egg?" Um, the egg did. Period. We have known that since Darwin. Duh.
 
 DeusXMachina
 16 June, 2011 17:54
 
 Reply Vote
 - Patents
 
 @fr_gough I don't like patents (software patents) because they are unnecessary for innovation and may instead hinder innovation. Sure it would be nice to own a nice valuable patent. But more likely, I'll get screwed out of a great invention because someone has a patent claim over a minute part of it. It's next to impossible to know what has already been patented these days. adornoe@... For all the text that you wrote, you should at least make a point about why patents should exist. No one here is arguing that you shouldn't be able to make money off of innovating something -- you can do this without patents. Shouldn't a conservative like you be against government regulations like patents?
 
 K B
 16 June, 2011 18:50
 
 Reply Vote
 - DeusX, again being intrusive and annoying, with nothing real to contribute.
 
 You have already demonstrated that you don't know crap about the hstory of Bell Labs, This is not about the history of Ma Bell. It's about what brought about Ma Bell. Ma Bell would not have even been conceived if there already hadn't been a product which could be used for distribution and massive communication by the masses. Tangential arguments don't help your side at all. or about socialism. Stupid is as stupid thinks. And you have no idea what socialism is about. Whether it's written in the ideological manuals or not, and whether it's spoken or not, the goal for socialists is to make anything and everything, community property. If you haven't learned that lesson yet, then you need to go back to middle-school or earlier. For instance, socialism says NOTHING about "sharing everything ever created or invented", a purely straw man argument. The approach of socialism is to make everything community property, or shared by all. Like I said, go back to school. Care to differ? Anybody with common sense would disagree with your asinine statements and assessments. Provide a citation re: socialism and patent law. That's a pretty stupid request. It doesn't work that way. The way it works is for socialism/socialists to gradually take possession of all things that produce any kind of wealth, and then to consider it "government owned" or "government managed", and then to finally declare it "owned by the people". Sort of what they're attempting to do with healthcare, and what they've done to education in the k-12 levels. As for the rest of your garbage it is all summed up by your choice of analogy. For somebody who continually likes to remind people that you taught "calculus and logic in college", you sure lack a lot of common sense. "Which came first? The chicken or the egg?" You fail to grasp the common sense approach to the argument, and it's not about whether the chicken or the egg came first. Try some common sense and you'll begin to grasp the crux of the argument. Um, the egg did. Period. We have known that since Darwin. Duh.
 
 That's very presumptuous. Neither Darwin nor anyone else can or could state with any certainty which came first. What "created" the egg? Darwin, just like most evolutionists, made a lot of assumptions from their observations, and to this date, the theory of evolution cannot be proven, even if the progression of the species seems to follow some kind of order. Logic requires a lot more than drawing to conclusions.
 
 adornoe
 17 June, 2011 12:24
 
 Reply Vote
 - K B: It has become standard practice for government to register patents
 
 and to issue regulations and/or laws to govern the use of those patents. Government doesn't control the patents, they just manage the registering and the use and protection of the patents. If government had control of the patents, then the disputes for IP and/or patents and/or copyright, wouldn't even get started. And the list of patents would be very short indeed, and most of the technology we have today wouldn't even exist.
 
 adornoe
 17 June, 2011 12:38
 
 Reply Vote
 - RE: Nortel patent portfolio draws bidding war: Apple vs. Google?
 
 @adornoe@... The belief that patents are needed to promote invention is a faith-based belief, not a fact-based belief. That's what this argument comes down to. Mike at the Techdirt web site has done a lot of investigation into patents and copyrights. He has found a lot of peer-reviewed research about them. As far as I know, he has not found any research that demonstrates that they are necessary to promote creation of inventions or new art, and, in fact, plenty of documented cases in which their absence has done no harm to such activity. For an easy example of this, just consider the software industry prior to the time the courts so inadvisedly permitted software patents to issue. There was tremendous progress made in a few decades, and no one seems to have been dissuaded from inventing software because they could not patent it. You might say that is somehow a special case, but it is not the only one. Go look at Mike's posts on the subject. There is no evidence that patents are necessary, and lots of evidence that they are, in fact, a bad idea. It wouldn't be the first time that major social/economic policy was based on a fallacy.
 
 KeithDick
 17 June, 2011 13:04
 
 Reply Vote
 - KeithDicK: This is not about a belief system; it's about the facts.
 
 The belief that patents are needed to promote invention is a faith-based belief, not a fact-based belief. Get that silly nonsense out of your mind. It's not about "belief". That's garbage! That's what this argument comes down to. When "thinking" idealistically, you're not engaging in practical arguments. The argument comes down to the protection of ideas and innovation, which someone put a lot of time and hard work and even funding into. Mike at the Techdirt web site has done a lot of investigation into patents and copyrights. He has found a lot of peer-reviewed research about them. As far as I know, he has not found any research that demonstrates that they are necessary to promote creation of inventions or new art, and, in fact, plenty of documented cases in which their absence has done no harm to such activity. More garbage! Your Mike very likely started with an agenda, and a predefined objective, and all that he was looking to get was a set of his own "facts" to prove his premise. Have you ever heard of "junk science"? Mike, very likely was engaged in "junk research". It's the same as phony polls where somebody with an agenda sets out to prove a political point, and just polls those who will agree with the pollster's premise. For an easy example of this, just consider the software industry prior to the time the courts so inadvisedly permitted software patents to issue. There was tremendous progress made in a few decades, and no one seems to have been dissuaded from inventing software because they could not patent it. The fact is that, with people being able to protect their patents and IP, that more people are encouraged to produce their own ideas and innovations and even unique software pieces. Fart apps are not unique, as an example, but there are a lot of pieces of software which somebody created the idea for, and later developed the idea. If that person was the first with the idea, then his/her work should be protected. Would the idea have been developed by somebody else anyway? Possible, but, there's no way of really determining that. The fact is that, with patents and IP protections, there are millions of people engaged in trying to produce their own ideas and innovations and products. If there were no protections, then most of those people would be discouraged from using their creative and innovative minds. Some or many would still want to be creative, but, the pace of progress would be a lot slower than with the patent or IP protections in place. You might say that is somehow a special case, but it is not the only one. You still don't understand. Ideas and innovations are not new and people were creative before people even thought of patents. However, ideas and innovations and products, in the current world, do warrant patents, because, those ideas and innovations and products, represent a lot of time and effort and money invested by the individuals or companies that produced them. Without those protections, you would still be in the 1800s, where the horse and buggy would be your basic means of transportation. Go look at Mike's posts on the subject. Mike is a very bad example of somebody to be quoting from, because, he's starting out with an agenda. There is no evidence that patents are necessary, and lots of evidence that they are, in fact, a bad idea. When I look around the world today, I see a place where patents have enriched everybody with technology and communications capabilities and medicines and transportation and entertainment and food and education and pure knowledge, and all of those things would not be in the current stage they're in without patent protections. Without patents, development of ideas would be at a very tiny fraction of their current rate. As an example, I'm in the middle of trying to develop an idea, for news/information/views/opinion that will be internet based with a complicated database for access and searching capabilities, and if I knew that my work were to be open for anybody to copy and use my ideas as their own, then I wouldn't even bother in trying to develop the idea into a product. And believe me, though it sounds like what you can find on the internet right now, it's far from it. It wouldn't be the first time that major social/economic policy was based on a fallacy. There is no more fallacious argument than that which is based on hypothetical situations, where people make assumptions about how things would have turned out if conditions had been different. The real fact is that, innovation and ideas have been coming at a much faster pace since patent and IP protections were set up, than before. The modern day Da Vincis and Galileos and Newtons and Graham Bells, would still be doing their things, but, the many other thousands, and millions (if you include innovations within companies), would not be happening. Your Mike and you are operating with very narrow minds and without any real concept of how things work in the real world.
 
 adornoe
 18 June, 2011 08:32
 
 Reply Vote
- RE: Nortel patent portfolio draws bidding war: Apple vs. Google?
 
 @Aerowind
 
 Really, you hate patent laws. I agree that they are abused, that they can be messy, and that they can be very difficult to interpret.
 
 But if a company spends millions or billions of dollars that come from investors (of all sorts, including grandma's retirement portfolio), don't they deserve protection for what they created?
 
 Or do you think it is perfectly fine for companies to spend money to create something great and then the hyenas can over power the Lion and steal her catch...that is okay with you?
 
 Without patent laws there is far, far, far, far less innovation!
 
 Raid6
 16 June, 2011 22:17
 
 Reply Vote