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DoJ ramping up antitrust probe of $4.5B Nortel patent purchase by Apple, others

post #1 of 62
Thread Starter 
Even as Nortel announced the completion of the sale of its 6,000 patents to a group of tech giants including Apple, Microsoft and Research in Motion, the U.S. Department of Justice is said to be intensifying an investigation into whether the deal would unfairly disrupt competitors.

Canada-based Nortel Networks announced Friday that its subsidiaries "have completed the sale of all of Nortel's remaining patents and patent applications to a consortium consisting of Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony." The group, which called itself Rockstar Bidco, won the auction last month with a bid of $4.5 billion, a number more than three times the price expected by analysts.

U.S. and Canadian bankruptcy courts had already approved the deal several weeks ago.

However, The Wall Street Journal reports that the Justice Department is deepening its probe of the deal, with particular interest to whether the purchasers could use the patents to "unfairly hobble" devices running Google's Android mobile OS. The search giant placed the initial bid in the auction, but was unable to outbid its competitors once Apple teamed up with the other companies.

According to the report, the DoJ can still "impose conditions" on the companies even though the deal has already been completed. Earlier this year, the federal agency put pressure on a deal that would have seen Microsoft, Apple and Oracle purchase patents from Novell, instead forcing Microsoft to license the patents.

The Justice Department is particularly interested in whether "there's an agreement, implicit or explicit, among the members of the Rockstar consortium to collectively hinder the adoption of Android," said antitrust lawyer Thomas Ensign.

People familiar with the matter said the agency had individually approved all of the companies to participate in the auction, while reserving the right to "take a fresh look" if it had concerns afterward. Potential issues could be the fact that Apple joined the Rockstar consortium late into the auction and the high final price, the sources indicated.

Google general counsel Kent Walker said this week that the Rockstar bid was "a sign of companies coming together not to buy new technology, not to buy great engineers or great products, but to buy the legal right to stop other people from innovating."

As a younger company with a relatively small patent portfolio, Google has run into trouble as competitors, including Apple and Microsoft, have sued Android vendors for infringement. The Mountain View, Calif., company recently shored up its IP collection with the purchase of a batch of patents from IBM, which included inventions related to "memory and microprocessor chips, computer architecture and online search engines."

Rumors that Apple and Google may also compete to purchase InterDigital drove the company's value up by 50 percent earlier on speculation that a bidding war would result in a higher sale price.
post #2 of 62
Wow, major win for Google.

A conditional patent portfolio buyout.

Hope those $2 Billion + was worth it for Apple. Lets be honest here, its intent in jumping into the patent race was to stifle competition.

This is what is meant by "stifling competition": malicious intent on using patents to kill off a competitor.

Yup, fits the bill of anti-competitive measures to me.

The DOJ is doing the work for Google.

"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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post #3 of 62
Quote:
Originally Posted by AppleInsider View Post

Google general counsel Kent Walker said this week that the Rockstar bid was "a sign of companies coming together not to buy new technology, not to buy great engineers or great products, but to buy the legal right to stop other people from innovating."

Funny how Google never learned the difference between 'innovating' and 'stealing'.

Don't they teach that in Kindergarten in California?
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #4 of 62
I hope the DOJ is bright enough to see this from both angles. As much as bought patents could allow one company to hinder the progress of another, those same patents in turn could allow one company to steal the work of another company without consequence.
Hmmmmmm...
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Hmmmmmm...
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post #5 of 62
The DoJ hasn't done anything of note in years. Basically this is shuffling papers around on a desk.
He's a mod so he has a few extra vBulletin privileges. That doesn't mean he should stop posting or should start acting like Digital Jesus.
- SolipsismX
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He's a mod so he has a few extra vBulletin privileges. That doesn't mean he should stop posting or should start acting like Digital Jesus.
- SolipsismX
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post #6 of 62
Quote:
Originally Posted by hmurchison View Post

The DoJ hasn't done anything of note in years. Basically this is shuffling papers around on a desk.

Because all of it being done behind closed doors without much media coverage.

"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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post #7 of 62
Quote:
Originally Posted by Galbi View Post

Wow, major win for Google.


The DOJ is doing the work for Google.

I'd say that just about sums it up. Google is such a whiner; just like the annointed 0ne. I wouldn't trust them as far as I can throw, Chris Christie - and I am a fan of the governor.
post #8 of 62
Wait, didn't both American and Canadian governments approve of this purchase?
post #9 of 62
Quote:
Originally Posted by mbarriault View Post

Wait, didn't both American and Canadian governments approve of this purchase?

The Canadians just want the cheque... I think Steve stuck it in the mail...
Hmmmmmm...
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Hmmmmmm...
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post #10 of 62
Quote:
Originally Posted by mbarriault View Post

Wait, didn't both American and Canadian governments approve of this purchase?

The bankruptcy courts approved it, but the DoJ operates under a different set of principles, so they are entitled to examine it too.

It was always clear that they would, though whether they'll decide that they need to change the terms of the sale is less likely. This is a very different market from that in the Novell purchase
.
post #11 of 62
The difficulty for the DoJ is this.

1. Patents exist to protect the profitability of intellectual property

2. They'd need some sort of written collusion that the "Rockstar" group willfully intends to
go after Android

So Apple's group isn't doing anything wrong by purchasing patents and the defense of those patents is not wrong either so long as they don't stray into anti-trust gray areas. Of course the DoJ is looking at this scenario but unless they find a "smoking gun" they will have little to investigate.
He's a mod so he has a few extra vBulletin privileges. That doesn't mean he should stop posting or should start acting like Digital Jesus.
- SolipsismX
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He's a mod so he has a few extra vBulletin privileges. That doesn't mean he should stop posting or should start acting like Digital Jesus.
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post #12 of 62
Don't think for a moment that Google is trying to keep this "fair". They, along with any other company, including Apple will use the patent to keep out others. Like it or not, that's what the patent system - especially in mobile technology - is being used for.

What's the government going to do? Abort the sale and let Google buy it? How's about sell it to Lodsys? Guess what Google will do if they find out another player uses technology it has a patent for?

If their truly is a concern, the government should take the patents and put them in the public domain where anyone can use it. Not on my tax dollars though.

How's about if a company goes bankrupt, the patents automatically become public? They should not necessarily be allowed to be bought and sold like tangible property.

I think we're at a point now where there are so many patents causing so much overlap, one cannot innovate without violating some obscure patent.

Just my 2 cents. It's a mess.
post #13 of 62
Sounds about right for Google, a company based on software patents to demand a rule change now...
post #14 of 62
nice to have friends in high places
post #15 of 62
Schmidt has to get some payback for his vocal support of Obama.
post #16 of 62
Quote:
Originally Posted by Galbi View Post

Wow, major win for Google.

A conditional patent portfolio buyout.

Hope those $2 Billion + was worth it for Apple. Lets be honest here, its intent in jumping into the patent race was to stifle competition.

This is what is meant by "stifling competition": malicious intent on using patents to kill off a competitor.

Yup, fits the bill of anti-competitive measures to me.

The DOJ is doing the work for Google.

Another way to look at this is that Nortel would have sued Google if they were still able to do so.

If the Rockstar group go after Google, they are only doing what Nortel would have done anyway.

Google stole IP, Google should pay.

I'm not saying that I agree with this view. I find that when I take a close look at the issues, they are far more complex than they seem at first glance.
post #17 of 62
Quote:
Originally Posted by hmurchison View Post

The difficulty for the DoJ is this.

1. Patents exist to protect the profitability of intellectual property

2. They'd need some sort of written collusion that the "Rockstar" group willfully intends to
go after Android

So Apple's group isn't doing anything wrong by purchasing patents and the defense of those patents is not wrong either so long as they don't stray into anti-trust gray areas. Of course the DoJ is looking at this scenario but unless they find a "smoking gun" they will have little to investigate.

That's not actually relevant. They had no smoking gun in the case of the Novell purchase but they still imposed significant restrictions.

You see there's a fundamental difference between the standards of evidence for an anti-trust action to break apart a monopoly and the standard of evidence to block or restrict a merger that could result in a monopoly.

There's a good chance that the purchase will be allowed to go through, but this isn't cut and dried.
post #18 of 62
Going against Google on the purchase. I think
This will really help Apple's case.
post #19 of 62
There is nothing to see here. The DoJ will do an extensive investigation and side with Apple.

This will then silence the next auction that Apple wins on.

This is standard procedure for high stakes.
post #20 of 62
Quote:
Originally Posted by mdriftmeyer View Post

There is nothing to see here. The DoJ will do an extensive investigation and side with Apple.

This will then silence the next auction that Apple wins on.

This is standard procedure for high stakes.

I think your prediction is a sound one.
post #21 of 62
Quote:
Originally Posted by Patranus View Post

Schmidt has to get some payback for his vocal support of Obama.

Uh, but I think Steve supported Obama also... no one's perfect.

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Proud AAPL stock owner.

 

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post #22 of 62
Quote:
Originally Posted by anantksundaram View Post

I think your prediction is a sound one.

It's the typical government tap dance to make sure everyone remembers that they are more powerful and important than everyone else. ...and so they remain 'painfully' employed.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #23 of 62
When will the DOJ start looking into the manipulation of Apple's share by the street big boys.

No one is killing android, everyone is just protecting their IP and collecting royalties - who want to kill the goose that lays the golden egg - ask Nokia, Kodak, MS, etc.
post #24 of 62
Quote:
Originally Posted by AdamC View Post

When will the DOJ start looking into the manipulation of Apple's share by the street big boys.

That would be the SEC's job, in general.
post #25 of 62
So, uh, no one here noticed a small group of corporations now holds the patents previously held by one corporation - and the question is "is this less competitive?"

Duh?
post #26 of 62
Quote:
Originally Posted by Galbi View Post

Hope those $2 Billion + was worth it for Apple. Lets be honest here, its intent in jumping into the patent race was to stifle competition.

You have no way of knowing that, and it seems far less convoluted an argument to say Apple was buying these as a preemptive measure to avoid future patent trolls suing them. If you think it's about competition, then why did they buy these patents with some of the very companies who are their competition? Hard one to answer, huh?

Quote:
Originally Posted by Galbi View Post

This is what is meant by "stifling competition": malicious intent on using patents to kill off a competitor.

Apple has historically only initiated patent lawsuits where their ideas were taken wholesale by a competitor. Apple invests heavily in their R&D to produce their products. If you're so concerned about stifling competition, perhaps you should worry about companies who don't actually compete by developing their own ideas, but rather, by cloning Apple products and stealing ideas. Is that competition in your book? It's not in mine.
post #27 of 62
Hopefully this will lead to the DOJ breaking Apple up.
post #28 of 62
I agree with a couple others here that the deal will probably go thru. But I will also be surprised if there aren't some conditions attached.

Had MS not been part of the group, the questions about possible anti-competitive actions would not have come up at the DoJ in my opinion. They had nothing to gain from this except keeping them out of Google's hands. Pair that with tag-team-like patent suits filed by Apple and MS against Android players and it's clear to me why an investigation was deemed appropriate.
melior diabolus quem scies
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melior diabolus quem scies
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post #29 of 62
Quote:
Originally Posted by inkswamp View Post

You have no way of knowing that, and it seems far less convoluted an argument to say Apple was buying these as a preemptive measure to avoid future patent trolls suing them.

Patent trolls don't make anything, so buying these patents won't protect Apple. They can only be used against companies that do actually make something and therefore could have violated one or more of these patents (ie not the trolls and right now the most likely target is Android).
post #30 of 62
Quote:
Originally Posted by Orlando View Post

Patent trolls don't make anything, so buying these patents won't protect Apple. They can only be used against companies that do actually make something and therefore could have violated one or more of these patents (ie not the trolls and right now the most likely target is Android).

There is no "target" these patents, or at least some of them, had to do with 4g, which apple doesn't have patents for, and will be making a phone soon incorporating that technology.

Gosh, call the po-lice, clearly Apple has only bought these as a weapon, and poor Google was bidding only to make those Patents free and open to everyone, just like their patent infringing, lawsuit inducing OS that they give away like the clap.
post #31 of 62
Quote:
Originally Posted by Jcoz View Post

There is no "target" these patents, or at least some of them, had to do with 4g, which apple doesn't have patents for, and will be making a phone soon incorporating that technology.

Gosh, call the po-lice, clearly Apple has only bought these as a weapon, and poor Google was bidding only to make those Patents free and open to everyone, just like their patent infringing, lawsuit inducing OS that they give away like the clap.

Now you're being ridiculous. Apple doesn't need to own LTE patents to make an LTE phone, any more than they needed 3G patents or GSM patents in the past. Apple needs them for offence or it needs them for defence, probably a mix of the two - and don't be surprised if the really important patents turn out not to be the LTE ones.
post #32 of 62
Quote:
Originally Posted by Galbi View Post

Wow, major win for Google.

A conditional patent portfolio buyout.

Hope those $2 Billion + was worth it for Apple. Lets be honest here, its intent in jumping into the patent race was to stifle competition.

This is what is meant by "stifling competition": malicious intent on using patents to kill off a competitor.

Yup, fits the bill of anti-competitive measures to me.

The DOJ is doing the work for Google.

Actually, it's the smaller players in the industry coming together to prevent Google from become too powerful. Sounds like the free market is doing what it's supposed to do: keep competition alive. Of course, in I-love-google land, it means Google is the "underdog" and this was meant to "kill off a competitor"

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #33 of 62
Quote:
Originally Posted by Jcoz View Post

Gosh, call the po-lice, clearly Apple has only bought these as a weapon, ...

Weapons of mass disruption...
Hmmmmmm...
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Hmmmmmm...
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post #34 of 62
Quote:
Originally Posted by Jcoz View Post

Gosh, call the po-lice, clearly Apple has only bought these as a weapon, and poor Google was bidding only to make those Patents free and open to everyone, just like their patent infringing, lawsuit inducing OS that they give away like the clap.

No I think Google was also buying these as a weapon. But the problem is patents are weapons. It is no longer about who makes the better products it is about who has the most weapons (ie who has the biggest patent portfolio). If you have a large portfolio you can copy another company's inventions because t will just end up as a cross licensing deal. If you don't have a large portfolio it almost worth going to work in the mornings because it is virtually impossible not to fall foul of some patent and get sued.
post #35 of 62
This is about one thing only the sleazy buying of influence in Washington by Google. There is no evidence what so ever that indicates Apple intends to use the patents in the manner you indicate. However the same can not be said for Googgle which has a history of throwing money around to control technology.

Quote:
Originally Posted by Galbi View Post

Wow, major win for Google.

A conditional patent portfolio buyout.

Hope those $2 Billion + was worth it for Apple. Lets be honest here, its intent in jumping into the patent race was to stifle competition.

This is what is meant by "stifling competition": malicious intent on using patents to kill off a competitor.

Yup, fits the bill of anti-competitive measures to me.

The DOJ is doing the work for Google.

Unfortunately this appears to be the case, Google got cheap so they decided to pad a few accounts in Washington to influence the Department of Justice. This is very sad considering Google propensity for theft.
post #36 of 62
Quote:
Originally Posted by Patranus View Post

Schmidt has to get some payback for his vocal support of Obama.

Spend enough cash in Washington and you can get the government to do the work you can't.
post #37 of 62
Quote:
Originally Posted by kresh View Post

Hopefully this will lead to the DOJ breaking Apple up.

I know fat chance. However it would do the nation a world of good to replace the most corrupt io our congressman especially the anti business ones. You can't build a great nation by smacking down success.
post #38 of 62
Quote:
Originally Posted by SpamSandwich View Post

Uh, but I think Steve supported Obama also... no one's perfect.

The big difference here is that Apple has not spent money to "influence" Washington the way Google has. I'm left with the impression that Google thinks that it can get away with anything if they spend enough money in Washington. A good portion of Googles operations these days are built around stolen IP.
post #39 of 62
Quote:
Originally Posted by Suddenly Newton View Post

Actually, it's the smaller players in the industry coming together to prevent Google from become too powerful. Sounds like the free market is doing what it's supposed to do: keep competition alive. Of course, in I-love-google land, it means Google is the "underdog" and this was meant to "kill off a competitor"

A "Free market" system dont use the legal system to do "business".

Are yo familiar with the term "invisible hand"? That is called market forces and none of it involves the patent system.

Brush up on your economics.

"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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post #40 of 62
Quote:
Originally Posted by Patranus View Post

Schmidt has to get some payback for his vocal support of Obama.

You do realize Apple is a very Pro-Democrat Corporation, right? Steve's not a Republican.
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