Apple approved to bid on Nortel patents, sources say

Posted:
in General Discussion edited January 2014
Apple has received approval to proceed with plans to bid on a group of wireless technology patents from bankrupt Canadian company Nortel, while significant interest in the patents has led to the auction being pushed back a week.



The Wall Street Journal reported on Friday that Apple, Intel and Ericsson AB will "vie with Google" to buy a trove of 6,000 patents from the telecom-equipment maker. RPX, a firm that preemptively purchases patents for clients to prevent them from being wielded, has also reportedly been accepted as a "qualified bidder."



The auction was originally scheduled to take place on June 20, but has been moved to June 27 due to a "significant level of interest" from other companies. People familiar with the matter said Apple and Intel had been accepted as separate bidders, while Ericsson and RPX were accepted as part of one or more consortiums.



Sources said earlier this week the U.S. Department of Justice had concluded an antitrust investigation into Google's $900 million starting bid for the collection. The DOJ reportedly didn't find any "major competitive" issues with Google's interest in the patents, and has had greater concerns about Apple.



Officials are scrutinizing both Apple and Research in Motion because both companies are perceived as being more aggressive with their intellectual property, insiders said.



Companies are interested in the group of patents mostly because it contains key technologies related to the fourth-generation Long Term Evolution standard, though Wi-Fi and social networking patents are also included in the lot. The presence of the LTE patents has raised concerns that the winner of the auction could gain an unfair advantage over competitors in the 3G 'arms race.'



BlackBerry maker RIM had been rumored to be "weighing an offer" to outbid Google, but the company's recent financial troubles make a bid seem unlikely.
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Comments

  • Reply 1 of 21
    MacProMacPro Posts: 16,945member
    Excellent news.
  • Reply 2 of 21
    adamiigsadamiigs Posts: 355member
    and this is where 50 billion+ dollars comes in handy.
  • Reply 3 of 21
    melgrossmelgross Posts: 30,166member
    Apple is the richest of the potential bidders, but are they the hungriest? They bid on

    Palm as well, but the bid was only for $600 million. HP paid over a billion.
  • Reply 4 of 21
    MacProMacPro Posts: 16,945member
    Quote:
    Originally Posted by AdamIIGS View Post


    and this is where 50 billion+ dollars comes in handy.



    Might even be $70B + soon according to some projections
  • Reply 5 of 21
    ghostface147ghostface147 Posts: 1,629member
    1.3 billion is my bid.
  • Reply 6 of 21
    I'll be shock if the money accrued from this bid exceeds the original amount of money that Nortel owed but the money never reach their respective inventor(s) or patent holder(s) but goes straight to the lawyers' pocket. The last time telecommunication companies bid for 3G spectrums here in the UK it generated ridiculous amount of money but the end products never equated to the money paid. And what the government did with the money? Well, some claimed the money to pay their 'expenses' without telling the authority what these 'expenses' actually are.
  • Reply 7 of 21
    mikemikebmikemikeb Posts: 113member
    This will be a defensive bid.



    The recent Apple-Nokia patent settlement was a loud-and-clear statement to anybody who understands the new business of cell phone patent ownership. If not using a patent makes your phone a brick (as is the case of Nokia's patents), or not using a patent means you're at a significant competitive disadvantage to the competition (Nortel's LTE patents), then you have to own them now (and collect royalties from other companies), or pay that amount in the long term.



    Smartphone patents are now financial investments, in the same way that ownership in companies are considered financial investments. They even provide "dividends", in the form of royalty fees. What's the typical "proper" price to pay for a business, ten times earnings? The winner of this auction will understand the new landscape of patent ownership as business ownership. I think Apple was awakened by the Nokia settlement, and won't want it to happen, again. They have cash. I think they'll win. Sure, they haven't been willing to bid much in the past for businesses, but their past bids haven't involved large amounts of cross-platform intellectual property.



    I won't be surprised if the winning bid is over $3 billion. Perhaps this is my "rah-rah" side getting to me, again, but I'll go out on a limb and guess it will be over $5 billion.
  • Reply 8 of 21
    orlandoorlando Posts: 601member
    Quote:
    Originally Posted by AdamIIGS View Post


    and this is where 50 billion+ dollars comes in handy.



    Both Google and Apple have much more cash than the patents are worth. The trick is going to be not over paying.
  • Reply 9 of 21
    Quote:
    Originally Posted by AdamIIGS View Post


    and this is where 50 billion+ dollars comes in handy.



    Absolutely true
  • Reply 10 of 21
    cloudgazercloudgazer Posts: 2,161member
    Quote:
    Originally Posted by Orlando View Post


    Both Google and Apple have much more cash than the patents are worth. The trick is going to be not over paying.



    I suspect Google won't fight that hard, this isn't an existential threat to them, the Oracle suit is the only one that could really screw them.



    Samsung on the other hand ...
  • Reply 11 of 21
    richlrichl Posts: 2,213member
    Quote:
    Originally Posted by Splash-reverse View Post


    The last time telecommunication companies bid for 3G spectrums here in the UK it generated ridiculous amount of money but the end products never equated to the money paid. And what the government did with the money? Well, some claimed the money to pay their 'expenses' without telling the authority what these 'expenses' actually are.



    "Some" are wrong. The 3G license money was used to pay off part of the national debt.
  • Reply 12 of 21
    solipsismsolipsism Posts: 25,726member
    One strategy is buy goods you have no direct use for to keep them from your competitors. Another is to leak excessive interested in goods you think your competitors would have little or no use for to get them to overpay for said goods.
  • Reply 13 of 21
    patranuspatranus Posts: 366member
    Quote:
    Originally Posted by cloudgazer View Post


    I suspect Google won't fight that hard, this isn't an existential threat to them, the Oracle suit is the only one that could really screw them.



    Samsung on the other hand ...



    The patents themselves are not a threat but owning them gives them a weapon to defend Android with. That is far more valuable than the royalties derived from the patents and why Google will throw a ton a cash at this.
  • Reply 14 of 21
    brucepbrucep Posts: 2,823member
    Quote:
    Originally Posted by Patranus View Post


    The patents themselves are not a threat but owning them gives them a weapon to defend Android with. That is far more valuable than the royalties derived from the patents and why Google will throw a ton a cash at this.



    So apple will force up goog bid yet again or will again take off with a smaller power nano phone with a A-4.5 chip inside



    apple has something up its sleeve .



    go apple









    get well steve





    eat dog poor goog





    9
  • Reply 15 of 21
    cloudgazercloudgazer Posts: 2,161member
    Quote:
    Originally Posted by Patranus View Post


    The patents themselves are not a threat but owning them gives them a weapon to defend Android with. That is far more valuable than the royalties derived from the patents and why Google will throw a ton a cash at this.



    Yes but you're assuming that Google cares about Android that much, I don't think there's any evidence of it. For Google the enemy isn't iPhone, it's WP7 - because Apple are happy to route their search over Google. Sure Google would like the Ads too, but search is the important thing.
  • Reply 16 of 21
    patranuspatranus Posts: 366member
    Quote:
    Originally Posted by cloudgazer View Post


    Yes but you're assuming that Google cares about Android that much, I don't think there's any evidence of it. For Google the enemy isn't iPhone, it's WP7 - because Apple are happy to route their search over Google. Sure Google would like the Ads too, but search is the important thing.



    You have it all backwards.



    Google doesn't care about search, Android, or Gmail.

    Google cares about selling advertisements. 99.9% of Googles revenue comes from advertisements.



    Search, Android, and Gamil are simply means to sell advertising.



    All of Googles products are simply a means to generate ad impressions.
  • Reply 17 of 21
    melgrossmelgross Posts: 30,166member
    Quote:
    Originally Posted by cloudgazer View Post


    I suspect Google won't fight that hard, this isn't an existential threat to them, the Oracle suit is the only one that could really screw them.



    Samsung on the other hand ...



    Of all the companies mentioned, Google needs the patents the most. Google has a very weak portfolio.
  • Reply 18 of 21
    melgrossmelgross Posts: 30,166member
    Quote:
    Originally Posted by cloudgazer View Post


    Yes but you're assuming that Google cares about Android that much, I don't think there's any evidence of it. For Google the enemy isn't iPhone, it's WP7 - because Apple are happy to route their search over Google. Sure Google would like the Ads too, but search is the important thing.



    Google cares a LOT about Android. Android and Chrome are it's only defenses against Apple app model that keeps people from needing Googles Internet search as much. And as that search is where Google makes most of it's money, they need the captive audience it gives them.
  • Reply 19 of 21
    jimdreamworxjimdreamworx Posts: 1,060member
    Why didn't they just buy Nortel outright when it was on it's way down?

    Wouldn't that have been cheaper?
  • Reply 20 of 21
    cloudgazercloudgazer Posts: 2,161member
    Quote:
    Originally Posted by JimDreamworx View Post


    Why didn't they just buy Nortel outright when it was on it's way down?

    Wouldn't that have been cheaper?



    From Bloomberg:



    As of Sept. 30, Nortel’s debt amounted to $6.3 billion, including adjustments for operating leases, pension deficits and other items. The company has $1 billion in bonds that come due in 2011. Total liabilities amounted to almost $12 billion, while cash stood at $2.3 billion.
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