RIM may top Google's $900M bid for Nortel patent 'treasure trove,' sources say

Posted:
in iPhone edited January 2014
A new report claims BlackBerry maker Research in Motion is contemplating a bid that would top Google's $900 million offer for a valuable collection of patents from Nortel that include key technologies for the LTE 4G networking standard.



Earlier this month, The Wall Street Journal reported that Google had placed a bid of $900 million in cash for a collection of 6000 patents owned by Canadian telecommunications company Nortel, which declared bankruptcy in 2009. The offer was accepted by Nortel as a 'stalking-horse bid,' with interested competitors required to bid at least $929 million to outbid the company.



?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,? said Google general counsel Kent Walker. ?So after a lot of thought, we?ve decided to bid for Nortel?s patent portfolio in the company?s bankruptcy auction."



However, Apple, Google, Nokia and RIM are rumored to be among the most interested parties participating in the auction of Nortel's patents. If Google's offer is challenged, an auction will take place on June 20.



According to a new report from Bloomberg, people familiar with RIM's plans claim the company is "weighing an offer" that would block Google.



RIM co-CEO Mike Lazaridis has called Nortel's long-term evolution (LTE) patents a "national treasure" in the past, though he recently declined to comment on whether his company would make a bid for the patents.



"A group of technology companies, including mobile-phone makers, may also bid on the patents to stop Google," the report noted two people familiar with the matter as saying, adding that RIM has reportedly considered joining the group. Given Google's size, the smaller handset makers would need to pool their money in order to outbid the search giant.



Patent attorney David Mixon said in an interview that he expects bidding for the patents to reach more than $1 billion. ?There is great potential to turn that patent portfolio around and go after smaller competitors especially,? he said.



Analysts have also noted the potential value of the patent collection. "Nortel had some very good R&D engineers and I?m sure there are some very valuable patents in that portfolio,? said Evercore Partners analyst Alkesh Shah.



According to the report, Nortel's patents include technology licensed in RIM's BlackBerry devices, Apple's iPhone and devices that run on Google's Android mobile OS.



The patents have taken on particular significance as handset makers prepare an 'arms race' for the transition to a 4G standard. Patents to core technologies for LTE could provide not only a substantial revenue stream from licensing, but would also protect companies from litigation.



In 2009, Ericsson purchased Nortel's CDMA business and LTE access assets for $1.13 billion, but the deal did not include corresponding patents for LTE technologies. For its part, Apple has previously indicated that defending itself against lawsuits, regardless of merit, consumes "significant time and expense," and could see the patent cache as a preemptive against future litigation.



The company has become the world's most-sued tech company and has brought on several high-profile patent lawyers as outside counsel to defend itself.



According to Daniel Mead, CEO of Verizon, Apple has an LTE iPhone in the works, though it is unclear when the 4G-capable smartphone would be released. "You'll see more coming from Apple on LTE," said Mead. "They understand the value proposition of LTE and I feel very confident that they are going to be a part of it."



For several years now, Apple has posted iPhone-related job listings to its website with LTE experience listed as a qualification.



Verizon began rolling out its first LTE networks to select cities last year. AT&T revealed earlier this year that it has accelerated its plans for LTE deployment and expects the network to be "largely complete" by the end of 2013.



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Comments

  • Reply 1 of 119
    fila97fila97 Posts: 63member
    Time to use the 50 Billion cash reserves, Apple
  • Reply 2 of 119
    solipsismsolipsism Posts: 25,726member
    I wonder how valuable this IP is. Too often I see these companies buy things because they can or just to prevent others from hbkng it with little to know interest ad/or ability to utilize the IP directly.



    That said, all else being equal, if this IP can lead to smaller, faster and more power efficient baseband processors Apple growth in the premium smartphone market should make them want this more than te others. Aren't these bandbase processors using ARM cores? Would their current expertise be a benefit or not matter much at all?





    Quote:
    Originally Posted by fila97 View Post


    Time to use the 50 Billion cash reserves, Apple



    Hopefully you mean "some of" and not the whole $50B.
  • Reply 3 of 119
    mlayermlayer Posts: 23member
    Link



    Apparently Microsoft has a perpetual royalty-free license to the IP in these patents. Others might have to pay. Any of these major players have good reason to bid on this portfolio if they have the cash to do so.
  • Reply 4 of 119
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by mlayer View Post


    Link



    Apparently Microsoft has a perpetual royalty-free license to the IP in these patents. Others might have to pay. Any of these major players have good reason to bid on this portfolio if they have the cash to do so.



    I see what your saying but they could still be impacted by letting others have access to this IP who could then use it outmaneuver them. If think MS would be defensive against RiM, Google and Apple in smartphones.
  • Reply 5 of 119
    gatorguygatorguy Posts: 20,918member
    Quote:
    Originally Posted by solipsism View Post


    I see what your saying but they could still be impacted by letting others have access to this IP who could then use it outmaneuver them. If think MS would be defensive against RiM, Google and Apple in smartphones.



    The safest purchase, and the one best for the industry, would be one by Google IMO. Why? Google does not generally sue other players. Think they've sued a Government or two. But they don't wag patents around and file suit against everyone else in the business as a rule. The purchase of the Nortel patents would be a defensive move, intending to protect them from dubious suits. As the AI article hints, there's other potential purchasers who may see the portfolio as more patent infringement fodder, as tho there isn't already enough questionable use of the courts as a replacement for good business plans.
  • Reply 6 of 119
    mac.worldmac.world Posts: 340member
    Quote:
    Originally Posted by Gatorguy View Post


    The safest purchase, and the one best for the industry, would be one by Google IMO. Why? Google does not generally sue other players. Think they've sued a Government or two. But they don't wag patents around and file suit against everyone else in the business as a rule. The purchase of the Nortel patents would be a defensive move, intending to protect them from dubious suits. As the AI article hints, there's other potential purchasers who may see the portfolio as more patent infringement fodder, as tho there isn't already enough questionable use of the courts as a replacement for good business plans.



    The reason they haven't sued anyone is because they are too young of a company, no real hardware penetration into the market and a very small patent portfolio. You'll notice that any hardware they have made, has been a flop, hence no need for anyone to sue. But they are being sued on the software side.

    I think Google wants the patents because they have bigger plans for their own tablet and phones.



    In the end, I see Apple buying this at the last second for 1.3 billion to prevent further lawsuits when their LTE iPhone 5 is released. I'm sure Apple will see this as saving money in the long run, rather than spending money in the short term.
  • Reply 7 of 119
    nceencee Posts: 836member
    In the end, I see Apple buying this at the last second for 1.3 billion to prevent further lawsuits when their LTE iPhone 5 is released. I'm sure Apple will see this as saving money in the long run, rather than spending money in the short term ? and then they can start suing folks, instead of being sued by them
  • Reply 8 of 119
    Quote:
    Originally Posted by Mac.World View Post


    In the end, I see Apple buying this at the last second for 1.3 billion to prevent further lawsuits when their LTE iPhone 5 is released. I'm sure Apple will see this as saving money in the long run, rather than spending money in the short term.



    Do you really think Apple would buy it? They might have a go but they have generally been a bit frugal in the offering and lost the bid. Admob and Palm (allegedly) spring to mind.



    Apple tends to go for things it will use, not just things for the sake of it.



    On one level it would appear that Apple is more willing to bust it out, take the gamble on themselves kicking ass. Say like the iPhone vs Nokia, Apple is just going as hard as they can and saying nah, screw your demands.



    Nortel is a lot of networking IP for the hell of it, and potentially just a lot of defending network hardware infringements and companies debating licensing fees to keep the IP value alive while not making any coin through products.



    -shrug-



    Then again, perhaps it would offer some extra shots in the Nokia / Android manufacturer war.
  • Reply 9 of 119
    msanttimsantti Posts: 1,377member
    RIM see's their business going down the crapper so owning a bunch of patents allows them to become patent trolls.
  • Reply 10 of 119
    thepixeldocthepixeldoc Posts: 2,257member
    Quote:
    Originally Posted by msantti View Post


    RIM see's their business going down the crapper so owning a bunch of patents allows them to become patent trolls.



    Dang nab it! I was going to say that! Due to my prediction of them failing by the end of the year, it would be probably the only thing worth salvaging, and possibly being able to keep the investors half-way interested in keeping them afloat a bit longer as an entity.



    Ball-Silly must know and realize (privately) that they are in deep trouble, especially with the PB disaster coming to market. I still think Ball-Silly and Ball-Mer would make a great couple at the end of the day
  • Reply 11 of 119
    jessijessi Posts: 302member
    I hope Apple buys them. The idea that google is not evil is more marketing slogan than reality.... google is totally evil. They stole the iPhone multitouch design and produced a competing product while sitting on Apple's board!



    It is my sincere hope that Apple defeats google to such an extent that they become a division of Apple.



    Over the long term, it is best for justice to prevail, than for criminal organizations to succeed....
  • Reply 12 of 119
    backtomacbacktomac Posts: 4,579member
    I'd be surprised if anyone other than Google ended up buying these patents.



    Google seems to need them more than anyone else and have the money to overpay for them.
  • Reply 13 of 119
    mac.worldmac.world Posts: 340member
    Quote:
    Originally Posted by cy_starkman View Post


    Do you really think Apple would buy it? They might have a go but they have generally been a bit frugal in the offering and lost the bid. Admob and Palm (allegedly) spring to mind.



    I would have agreed with you 2 years ago. But Apple has been snapping up patent lawyers left and right and is now the most sued tech company in the world.



    In reality, they can't let anyone else have these LTE patents, because I can guarantee you, Apple knows that without these patents they are going to spend more in the long run defending patent trolls.



    On the other hand, they could go into a bidding war with Google and force Google to spend more capital than they have available on hand. Apple can afford to go as high as 2 billion. I don't think Google could swallow that pill and survive.
  • Reply 14 of 119
    mennomenno Posts: 854member
    Quote:
    Originally Posted by Mac.World View Post


    The reason they haven't sued anyone is because they are too young of a company, no real hardware penetration into the market and a very small patent portfolio. You'll notice that any hardware they have made, has been a flop, hence no need for anyone to sue. But they are being sued on the software side.

    I think Google wants the patents because they have bigger plans for their own tablet and phones.



    In the end, I see Apple buying this at the last second for 1.3 billion to prevent further lawsuits when their LTE iPhone 5 is released. I'm sure Apple will see this as saving money in the long run, rather than spending money in the short term.



    No, the reason they haven't sued yet is because they think that suing over software patents hurts the industry as a whole and stifles innovation.



    In the blog post where they talked about this potential purchase they said as much. They're purchasing these patents for defensive purposes because too many companies are trying to use patents offensively and since Google is such a young company, and they're rather adverse to patents, they don't have a portfolio of their own to make companies think twice before trying to sue them.
  • Reply 15 of 119
    gatorguygatorguy Posts: 20,918member
    Jessi, it's not clear at all that Google "stole" multi-touch from Apple. It was more a "line in the sand" drawn by Steve Jobs.



    IMO Mr. Jobs was more upset over Google entering the smartphone business at any level. Apple and Google had numerous meetings over Android and it's ongoing development, both before and after the iPhone design was completed. News accounts indicate Apple knew what Google was doing with it, while at the same time Google reportedly felt they had to do what was necessary to prevent their business from being beholden to the goodwill of other market forces, primarily Microsoft at that time. Multi-touch was one feature that Steve Jobs probably felt defined the iPhone user experience.



    Unfortunately Apple may have no grounds to claim it's theirs to begin with. Elan, a Taiwanese company, appears to have actually patented that very feature 10 years earlier. And Apple was certain to have been aware of that when they filed their own patent application. In 2006 Synaptics had already been served notice that use of some multi-touch features allegedly violated Elam's patent. And what claim Apple may imagine they hold to other parts of multi-touch may actually be owned by the University of Delaware. Apple's patent was largely dependent on the work of two employees, who had done much of the work in conjunction with the University when they were students there.



    True, somebody might have attempted to "steal" the idea behind multi-touch and claim it as their own. But it wasn't Google.
  • Reply 16 of 119
    gatorguygatorguy Posts: 20,918member
    Quote:
    Originally Posted by Mac.World View Post


    On the other hand, they could go into a bidding war with Google and force Google to spend more capital than they have available on hand. Apple can afford to go as high as 2 billion. I don't think Google could swallow that pill and survive.



    Why would you think that? Google is sitting on nearly $38 billion in cash. Yes, real liquid assets, "cash in the bank", so to speak. Apple is sitting with $50 billion. You must have missed Google's latest earnings report. A measly two billion isn't going to be the end for either of them. But both will weigh the cost of not bidding vs. the cost of going after the portfolio. Neither has shown themselves to be ignorant of good business practice. If a bid makes sense, they'll pursue it.
  • Reply 17 of 119
    nvidia2008nvidia2008 Posts: 9,262member
    Quote:
    Originally Posted by Gatorguy View Post


    Jessi, it's not clear at all that Google "stole" multi-touch from Apple. It was more a "line in the sand" drawn by Steve Jobs. IMO Mr. Jobs was more upset over Google entering the smartphone business at any level. Apple and Google had numerous meetings over Android and it's ongoing development, both before and after the iPhone design was completed. News accounts indicate Apple knew what Google was doing with it, while at the same time Google reportedly felt they had to do what was necessary to prevent their business from being beholden to the goodwill of other market forces, primarily Microsoft at that time. Multi-touch was one feature that Steve Jobs probably felt defined the iPhone user experience. Unfortunately Apple may have no grounds to claim it's theirs to begin with. Elan, a Taiwanese company, appears to have actually patented that very feature 10 years earlier. And Apple was certain to have been aware of that when they filed their own patent application. In 2006 Synaptics had already been served notice that use of some multi-touch features allegedly violated Elam's patent. And what claim Apple may imagine they hold to other parts of multi-touch may actually be owned by the University of Delaware. Apple's patent was largely dependnt on the work of two employess, who had actually done much of the work in conjusction with nthe University when they were students there. True, somebody might have attempted to "steal" the idea behind multi-touch and claim it as their own. But it wasn't Google.



    So Google stole it from Elan then?
  • Reply 18 of 119
    gatorguygatorguy Posts: 20,918member
    Quote:
    Originally Posted by nvidia2008 View Post


    So Google stole it from Elan then?



    Actually the companies using Android multitouch are licensing it, and from Elan directly or via Synaptics who in turn licensees from Elan.
  • Reply 19 of 119
    Quote:
    Originally Posted by cy_starkman View Post


    Do you really think Apple would buy it? They might have a go but they have generally been a bit frugal in the offering and lost the bid. Admob and Palm (allegedly) spring to mind.



    Apple tends to go for things it will use, not just things for the sake of it.



    On one level it would appear that Apple is more willing to bust it out, take the gamble on themselves kicking ass. Say like the iPhone vs Nokia, Apple is just going as hard as they can and saying nah, screw your demands.



    Nortel is a lot of networking IP for the hell of it, and potentially just a lot of defending network hardware infringements and companies debating licensing fees to keep the IP value alive while not making any coin through products.



    -shrug-



    Then again, perhaps it would offer some extra shots in the Nokia / Android manufacturer war.



    That is why is so important for Apple. If they outbid the others Apple will have great advantage cause is the only one mass producing the most popular devices devices, besides it will give them more knowledge on a lot of other topics. They are about to release new cloud services and I am pretty sure that many of those patents can be useful at that front.

    The other bids you mentioned aren't that important but this one is one in a live time opportunity. You know If I was a share holder I would be more than happy to have thousand of patents cause in the worst case scenario and the company sinks for any reason I still have the patents to license or sue others.
  • Reply 20 of 119
    It's cute how RIM thinks it can survive.
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