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DOJ probes Apple's interest in Nortel patents

post #1 of 79
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The U.S. Department of Justice is concerned about potential bids from Apple for a cache of patents being sold by Canadian telecom company Nortel, given the iPhone maker's legal track record.

The Wall Street Journal reports that the Justice Department is investigating companies interested in bidding on a collection of more than 6,000 patents from the now bankrupt Nortel including valuable intellectual property related to the 4G LTE standard.

The agency fears that U.S. technology giants, such as Apple and Google, could leverage the patents to block competition in the high-tech and wireless industries. According to people familiar with the matter, the DOJ hasn't found "major competitive issues" with Google, which has set the opening bid for the patents. However, officials reportedly have "greater concerns" about Apple. Sources said the company has been in talks with the Justice Department to address its concerns.

One legal expert called the trove "a stockpile of nuclear weapons as far as patents go." The auction is set to begin on June 20.

Late last year, Apple, Google, Nokia and Research in Motion were named as likely bidders on the patents. In April, Google's 900 million bid was accepted as a 'stalking-horse' offer.

Google is a relatively young company, and although we have a growing number of patents, many of our competitors have larger portfolios given their longer histories, Google general counsel Kent Walker said in April. So after a lot of thought, weve decided to bid for Nortels patent portfolio in the companys bankruptcy auction."

RIM has reportedly seriously considered topping Google's bid. Co-CEO Mike Lazaridis has called Nortel's LTE patents a "national treasure" in the past. It has also been suggested that a group of technology companies, which could include RIM, may pool their resources to outbid Google.

The Nortel situation has drawn comparisons to regulatory reaction earlier this year to a consortium of companies looking to acquire patents from Novell. Apple, Microsoft, Oracle and EMC created a joint holdings company to purchase 882 Novell patents after the company was acquired by Attachmate.

However, the deal prompted criticism from open source advocates worried that the companies would use the patents to damage open source competitors. In April, the Justice Department forced the consortium to promise not to use the Novell portfolio to unfairly stifle competition. Microsoft was also required to license patents instead of buying them.
post #2 of 79
Yeah, really important that somebody innovative buys them... er....
post #3 of 79
Quote:
[...] given the iPhone maker's legal track record.

Sorry, could you be more specific and try to elaborate. If you mean them going to court defending their in-house portfolio, nothing's wrong with that. For bought IP, maybe...
post #4 of 79
........
post #5 of 79
Quote:
Originally Posted by magicj View Post

Top Contributors To Obama, 2008
University of California\t$1,591,395
Goldman Sachs\t$994,795
Harvard University\t$854,747
Microsoft Corp\t$833,617
Google Inc\t$803,436
Citigroup Inc\t$701,290
JPMorgan Chase & Co\t$695,132
Time Warner\t$590,084
Sidley Austin LLP\t$588,598
Stanford University\t$586,557
National Amusements Inc\t$551,683
UBS AG\t$543,219
Wilmerhale Llp\t$542,618
Skadden, Arps et al\t$530,839
IBM Corp\t$528,822
Columbia University\t$528,302
Morgan Stanley\t$514,881
General Electric\t$499,130
US Government\t$494,820
Latham & Watkins\t$493,835
http://www.opensecrets.org/pres08/co...&cid=N00009638

So what. Several of those top donors won't be there in 2012 because they won't like the necessity of streamlining the Military, redundant health services, and especially the need to raise taxes on the wealthy to balance the budget.
post #6 of 79
Quote:
Originally Posted by Splash-reverse View Post

Sorry, could you be more specific and try to elaborate. If you mean them going to court defending their in-house portfolio, nothing's wrong with that. For bought IP, maybe...

Actually, it's mandatory do defend your patents rigorously under US law or risk losing them I believe.
post #7 of 79
It seems strange that we have a situation where a company that has such coveted patents has gone bankrupt.

Why does the 'open source community' always have to assume the very worst motives of large corporations like Apple. Maybe it's justified, but let's not just assume the worst.

It has to be said, if this portfolio is so valuable, surely Apple can go over anyone's head with the bidding at this point in time. $50b in readies.
post #8 of 79
Quote:
Originally Posted by Jonamac View Post

Actually, it's mandatory do defend your patents rigorously under US law or risk losing them I believe.

I thought it was only trademarks that required the fervent defense, not patents (or copyrights).
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post #9 of 79
Quote:
Originally Posted by mdriftmeyer View Post

So what. Several of those top donors won't be there in 2012 because they won't like the necessity of streamlining the Military, redundant health services, and especially the need to raise taxes on the wealthy to balance the budget.

Do you know that "raising taxes on the wealthy" is only political class warfare. Interesting how some politicians try to benefit by pinning Americans against Americans. The fact is if you taxed "the rich" at 100%, meaning you take ALL their income, that that is only a drop in bucket toward reducing the national debt.

Think of it this way. If you're taxed at 30% then you're working not for yourself or the company you work at, but for the government for that percentage of every day.

Curious about that $1 a year salary Mr. Jobs himself takes each year. Wonder which tax bracket that puts him in.
post #10 of 79
I don't like Eric Holder and I don't like the DOJ.

I think that Apple should hire some nasty racists (not white racists), then the DOJ would back down and not pursue this issue any further.

The DOJ also shut down two of my favorite poker sites recently. I got my money back from one of them, and I'm still waiting to get my money back from the other one.
post #11 of 79
Quote:
Originally Posted by crees! View Post

Do you know that "raising taxes on the wealthy" is only political class warfare. Interesting how some politicians try to benefit by pinning Americans against Americans. The fact is if you taxed "the rich" at 100%, meaning you take ALL their income, that that is only a drop in bucket toward reducing the national debt.
.

Raising taxes on the wealthy isn't political class warfare, it is just an extension of commonly accepted practices. In most countries, the poorest are taxed at a lower rate (I can't speak for the US)

According to http://en.wikipedia.org/wiki/Income_..._United_States

"Today, the top 1% account for 24% of all income"

And here: http://en.wikipedia.org/wiki/Househo..._United_States

"In 2006, there were approximately 116,011,000 households in the United States."

and

"In 2006, the "real" (adjusted for inflation) median annual household income rose 1.3% to $50,233.00 according to the Census Bureau"

So that would mean that the total income in the US in 2006 (the most recent numbers I could find) was $5,827,580,560,000. Thats $5 trillion, 827 Billion.

So, if you taxed the richest 1% at 100%, you'd get $1.39 trillion per year. Not really "only a drop in the bucket"

I'm not arguing that it is right to tax the richest at a higher rate, but you should try to be factual when making such a claim.
post #12 of 79
Quote:
Originally Posted by LTMP View Post

Raising taxes on the wealthy isn't political class warfare, it is just an extension of commonly accepted practices. In most countries, the poorest are taxed at a lower rate (I can't speak for the US)

According to http://en.wikipedia.org/wiki/Income_..._United_States

"Today, the top 1% account for 24% of all income"

And here: http://en.wikipedia.org/wiki/Househo..._United_States

"In 2006, there were approximately 116,011,000 households in the United States."

and

"In 2006, the "real" (adjusted for inflation) median annual household income rose 1.3% to $50,233.00 according to the Census Bureau"

So that would mean that the total income in the US in 2006 (the most recent numbers I could find) was $5,827,580,560,000. Thats $5 trillion, 827 Billion.

So, if you taxed the richest 1% at 100%, you'd get $1.39 trillion per year. Not really "only a drop in the bucket"

I'm not arguing that it is right to tax the richest at a higher rate, but you should try to be factual when making such a claim.

You really need to understand the difference between 'mean' and 'median' before spouting off on such matters.

And, the fact that it makes no sense to multiply the median by any other number.
post #13 of 79
Quote:
Originally Posted by anantksundaram View Post

You really need to understand the difference between 'mean' and 'median' before spouting off on such matters.

And, the fact that it makes no sense to multiply the median by any other number.

Well, no, I just need to learn to read.
My bad.
post #14 of 79
Quote:
Originally Posted by AppleInsider View Post

... the iPhone maker's legal track record ...

Presumably Microsoft is banned completely because of its illegal track record?
post #15 of 79
Quote:
Originally Posted by magicj View Post

Doesn't mean that. "Median" is the number in the middle of the list if you sort the list numerically. You can't multiply the median by the number of items on the list and get the total value of the list.

Edit:
I see anantksundaram beat me to it.

I found the correct 2008 numbers (mean income instead of median) at http://www.census.gov/compendia/stat...es/11s0689.xls

117,181,000 households
Mean household income: $68,424 (incidentally, the lowest it had been since 1998)

Total US income in 2008: $8,017,992,740,000

*24% $1,924,318,260,000

Sorry for my carelessness.
post #16 of 79
Quote:
Originally Posted by AppleInsider View Post


However, the deal prompted criticism from open source advocates worried that the companies would use the patents to damage open source competitors. In April, the Justice Department forced the consortium to promise not to use the Novell portfolio to unfairly stifle competition. Microsoft was also required to license patents instead of buying them.

This is incredible. While it's certainly within the realm of reasonableness for the DoJ to address actual anticompetitive behavior, preempting sensible business strategy by successful companies in the name of thwarting some vaguely-defined, potential behavior because of the caterwauling by self-described 'open source advcates' (whatever-the-heck that means -- how does one become an open source advocate?) is absolutely insane.

This is the kind of nonsense that sometimes results in US companies having to compete in global markets with one hand tied behind their backs.
post #17 of 79
Maybe if they didn't grant idea patents so flippantly we wouldn't have this issue. They really should just put them in the public domain.
post #18 of 79
Quote:
Originally Posted by LTMP View Post

Well, no, I just need to learn to read.
My bad.

Sorry... Didn't mean to come off like a sourpuss in my post -- upon re-reading, I may have sounded like one!
post #19 of 79
The DoJ is simply retaliating against Apple for not paying enough into Obama's campaign coffers. Apple have a long and consistent history of using patents only defensively to protect their right to participate in the market, never offensively to exclude anyone else from participating in the market (with the arguable recent except of Samsung, but Samsung's copying of the iPhone was egregious). This defensive-only use of patents is rare among large technology companies.
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post #20 of 79
Quote:
Originally Posted by magicj View Post

What you really want is a precise definition of what politicians mean when they say "The Rich". Then figure out how much money "The Rich" make, and base your calculations off of that.

Take a look at the number of Americans who are leeches, in that they pay zero taxes. They are economical parasitic creatures, most of them vote for Democrats, and they're also the kind of people who support stealing money from working people and handing out your money to other people who don't deserve it. They don't call this thievery by it's proper name, they prefer a nicer term like wealth redistribution. Just like we're not really engaged in any war in Libya right now, it's a kinetic military action. That kind of sounds like something that Microsoft would release for the Xbox.
post #21 of 79
Quote:
Originally Posted by magicj View Post

Sorry, not getting your point. Contributors to left wing candidate will not contribute to left wing candidate in the future because he wants to implement left wing policies?

Not sure that's true, but also don't see how it ties in with DoJ (part of executive branch) not finding a problem with a company (Google) that has made large political donations, yet finding problems with another company that hasn't (Apple), despite the fact that the two are in exactly the same business with regard to these patents.

Without getting into the politics, I do have to wonder why the DoJ thinks Google is so angelic? In fact, Google has the history of violating patents, don't they? Perhaps the DoJ thinks Google should have the patents thinking they'll make them freely available for open source folks to use. But then we get back into the political/economic motivations of the DoJ, an entity that should have no such motivations.
post #22 of 79
Yeah. It's really important to keep Apple from buying patents they might want to defend at some point. Obviously, it's far better to let a bunch of trolls who would sit on their patents, doing nothing, get those patents so they can defend them against innovative companies trying to bring new poducts to market.

Viv' la troll! /snark
post #23 of 79
Anyone who thinks tax rates for the rich are too low doesn't understand the Laffer Curve. http://en.wikipedia.org/wiki/Laffer_curve
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post #24 of 79
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Originally Posted by Wiggin View Post

I do have to wonder why the DoJ thinks Google is so angelic? In fact, Google has the history of violating patents, don't they? Perhaps the DoJ thinks Google should have the patents thinking they'll make them freely available for open source folks to use.

The unofficial position at DoJ is that Google bought the right to those patents by paying tons of money to help elect Obama. If Apple had contributed more to Obama, then Apple would have the right to the patents.
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post #25 of 79
Quote:
Originally Posted by Beauty of Bath View Post

Presumably Microsoft is banned completely because of its illegal track record?

I think Microsoft already have access to all of these patents, so they aren't even bidding.
post #26 of 79
Quote:
Originally Posted by Jonamac View Post

It has to be said, if this portfolio is so valuable, surely Apple can go over anyone's head with the bidding at this point in time. $50b in readies.

I think Apple already own enough patents to guarantee assured mutual destruction in any patent case against them... Google, not so much.

I'm sure Google want them more as a defensive measure. If Apple buy them it's going to be an offensive move, either to go after someone like Google, or prevent Google from defending themselves.

So to me, they seem more valuable to Google than Apple.
post #27 of 79
Doesn't anyone else find it a bit obscene that under the current patent system you're allowed to buy patents from someone else for a hell of a lot of money if you outcompete the next guy. In this case let's imagine both Google and Apple put in bids for $1BN and one of them wins.

Thats 6000 patents at $160k each.

You can then use those purchased patents to sue the loser of the purchasing battle for many billions more dollars. For nothing you've innovated yourself, just purchased. Pieces of paper that last only 20 years.

-Nano.
post #28 of 79
Quote:
Originally Posted by Firefly7475 View Post

I think Apple already own enough patents to guarantee assured mutual destruction in any patent case against them... Google, not so much.

I'm sure Google want them more as a defensive measure. If Apple buy them it's going to be an offensive move, either to go after someone like Google, or prevent Google from defending themselves.

Not true. Google have been aggressively acquiring patents for ten years. Not Apple. Google have a history of using patents aggressively. Not Apple (again, with the arguable exception of the Samsung case).

Steve Jobs hates patents and blocked the purposeful acquisition of patents until Bruce Sewell and others convinced him to bid for Palm. Apple obviously could have outbid HP, but Steve just wasn't that interested in Palm's patent portfolio.
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post #29 of 79
What a joke - DOJ is afraid of these big companies using patents to 'stifle competition', which is exactly what the system is used for. The original purpose of granting patents was to stifle competitors from copying what someone had invented for, what, 17 years - sure, to let that person recoup their investment in research, but essentially it's to prevent competition with the thought being that it will encourage innovation.

So a big company can afford to bid more for these and use that to shut out smaller companies... no kidding. So fix it - shorten the lifespan of the patents, stop granting software patents, obvious crap, etc.

Anyway... and then on top of it, little Google with their Android smartphone market share doesn't raise any red flags? Are they kidding? Clearly ANY of the companies who can afford these patents are just going to buy them and then use them to try to stop their competition. If that's the concern of DOJ, then buy them and declare them available for use by everyone.
post #30 of 79
Quote:
Originally Posted by NanoAkron View Post

Doesn't anyone else find it a bit obscene that under the current patent system you're allowed to buy patents from someone else for a hell of a lot of money if you outcompete the next guy. In this case let's imagine both Google and Apple put in bids for $1BN and one of them wins.

Thats 6000 patents at $160k each.

You can then use those purchased patents to sue the loser of the purchasing battle for many billions more dollars. For nothing you've innovated yourself, just purchased. Pieces of paper that last only 20 years.

The idea of patents is that they should encourage and promote innovation. The patent holder gets a temporary monopoly and the public eventually gets the know-how. Without patents, companies would rely much more on trade secrets.

I don't find it obscene that patents can be bought and sold. I do find it obscene that the United States, unlike most of the world, allow software patents. I also find it obscene that patents can last more than 10 years. A hundred years ago, when technology was moving slowly and patents lasted 17 years, that might have made sense. In today's fast moving world, I think 3 to 5 years would be an appropriate life for patents. I believe 3 to 5 years of monopoly rights would be enough to foster innovation. An exception of 10 years for the pharmaceutical industry might make sense due to the huge R&D costs (about a billion) to bring a new drug to market.
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post #31 of 79
Way to go, DOJ! Let Lodsys buy the patents instead!
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post #32 of 79
Aren't patents support to protect the inventors so that they have an incentive to innovate? Who in their right minds said that patents could be transfered? Doesn't that defeat the purpose?

So OK maybe the inventor can benefit by selling his idea, thus giving him an incentive to come up with that idea, but then once it is sold, you're not protecting anyone anymore. Seems to me that once the original inventor is out of the picture, patents shouldn't mean a thing, IF the idea was to give incentive to inventors.
post #33 of 79
Quote:
Originally Posted by Beauty of Bath View Post

Presumably Microsoft is banned completely because of its illegal track record?

An article I was reading today said that the DoJ probably would block Microsoft if they were to bid because of the size of their existing patent portfolio (much bigger than Apple's). Of course Microsoft don't need to bid since they already have a license to use them.
post #34 of 79
Quote:
Originally Posted by mcarling View Post

The DoJ is simply retaliating against Apple for not paying enough into Obama's campaign coffers. Apple have a long and consistent history of using patents only defensively to protect their right to participate in the market, never offensively to exclude anyone else from participating in the market (with the arguable recent except of Samsung, but Samsung's copying of the iPhone was egregious). This defensive-only use of patents is rare among large technology companies.

Your first statement is idiocy. As to the rest, I believe Apple sued Kodak first, and also HTC. These are recent lawsuits, and when you add in the Samsung suit, it's no wonder the DoJ is taking a closer look.
post #35 of 79
Quote:
Originally Posted by mcarling View Post

The unofficial position at DoJ is that Google bought the right to those patents by paying tons of money to help elect Obama. If Apple had contributed more to Obama, then Apple would have the right to the patents.

Wow. Mind blown. How do you come by this information? Do you mean to say that Google has curried favor with the current administration due to political contributions and that Apple, among others, is at a disadvantage for not having contributed enough to have the rights to these patents? Please say more.
post #36 of 79
Quote:
Originally Posted by mcarling View Post

Not true. Google have been aggressively acquiring patents for ten years. Not Apple. Google have a history of using patents aggressively. Not Apple (again, with the arguable exception of the Samsung case).

I don't think there's any instance of Google proactively making a patent infringement filing against any competitor.
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post #37 of 79
Quote:
Originally Posted by alienzed View Post

Aren't patents support to protect the inventors so that they have an incentive to innovate? Who in their right minds said that patents could be transfered? Doesn't that defeat the purpose?

So OK maybe the inventor can benefit by selling his idea, thus giving him an incentive to come up with that idea, but then once it is sold, you're not protecting anyone anymore. Seems to me that once the original inventor is out of the picture, patents shouldn't mean a thing, IF the idea was to give incentive to inventors.

Duh... If the patent became invalid once sold by the owner nobody would ever buy the patent. Using your logic once the patent is sold everybody else could then violate the patent without recourse. So why would any company buy a patent to start with?

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post #38 of 79
Quote:
Originally Posted by mcarling View Post

Anyone who thinks tax rates for the rich are too low doesn't understand the Laffer Curve. http://en.wikipedia.org/wiki/Laffer_curve

The fundamental flaw with using the Laffer Curve is that it is over simplified. It assumes that if the tax rate is too high, people will have no incentive to keep working.

If everyone had the same cost of living, and earned the same income, then it would be a much more useful tool.

However, since many (working) Americans earn at subsistence levels, and others literally earn more than they could ever spend, the effects of equal taxation will have vastly differing effects on the taxed.

As an example, if I make just enough money to support myself, a very low tax rate might make it untenable for me to report any income.

If I make hundreds of millions each year, a substantial tax increase might not have any impact on my life at all.

In fact, one could argue that allowing anyone to make more than they could ever spend removes the incentive to work.

I am not well versed in economic theory, so don't hesitate to point out any errors in my logic.
post #39 of 79
Quote:
Originally Posted by anantksundaram View Post

Sorry... Didn't mean to come off like a sourpuss in my post -- upon re-reading, I may have sounded like one!

Not at all. You politely pointed out a huge error in my post. Nothing sourpussy about that at all.
post #40 of 79
Quote:
Originally Posted by elroth View Post

Your first statement is idiocy. As to the rest, I believe Apple sued Kodak first, and also HTC. These are recent lawsuits, and when you add in the Samsung suit, it's no wonder the DoJ is taking a closer look.

Kodak went after Apple first, Apple countersued.

http://www.kodak.com/eknec/PageQueri...S&pq-path=2709
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