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Apple-Microsoft group pays $4.5 bn for Nortel patents
by Staff Writers
Montreal (AFP) July 1, 2011

A consortium led by Apple and Microsoft won an auction for some 6,000 patents held by bankrupt Canadian firm Nortel, their $4.5 billion bid beating Google and Intel, Nortel announced on Friday.

The consortium consisting of Apple, EMC, Ericsson, Microsoft, Research in Motion and Sony agreed to pay cash for the portfolio of patents ranging from wireless technology to semiconductors, Nortel said in a statement.

The huge sum spent on the patents and the involvement of many of the world's top tech companies reflects the fierce battle for intellectual property in the tech industry, where firms are often hit with patent-infringement lawsuits.

The $4.5 billion price tag was three times larger than what analysts had initially expected Nortel's patents would sell for.

"That is a staggering amount of money," patent lawyer Patrick Igoe commented in a post on his Apple Patent blog.

The agreement is still subject to US and Canadian court approval, which will be sought at a joint hearing scheduled for July 11, Nortel said.

"Following a very robust auction, we are pleased at the outcome of the auction of this extensive patent portfolio," George Riedel, Nortel's chief strategy officer and president of business units, said in the statement.

The news marked a defeat for Google, which had said in April that it was bidding $900 million for the patents in a bid to beef up its intellectual property portfolio. Chip-maker Intel had also expressed interest.

"This outcome is disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition," Kent Walker, senior vice president and general counsel at Google, said in a statement.

"We will keep working to reduce the current flood of patent litigation that hurts both innovators and consumers."

Google is currently being sued by software giant Oracle over technology used in its Android smartphone operating system, in one of many patent-infringement lawsuits that have bedeviled the search giant.

The threat of more such lawsuits spurred Google to make its $900 billion bid to buy the patent portfolio of bankrupt Nortel, a once-pioneering developer of wireless and fiber-optic technology.

Nortel, which at one time was Canada's largest company, filed for bankruptcy in 2009 and was auctioning off the patents to pay off its creditors. It began the closed-door auction of its patent portfolio on Monday.

BlackBerry maker Research in Motion, which is also Canadian, said in a statement that its share in the purchase was approximately $770 million.

Sweden's Ericsson said its contribution was $340 million. It was not immediately clear how much Apple and Microsoft contributed.

"The Nortel patent portfolio reflects the heritage of more than 100 years of its R&D activities and includes some essential patents in telecommunications and other industries," Kasim Alfalahi, chief intellectual property officer at Ericsson, said in a statement.


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