Nortel Networks, a former telecommunications heavyweight, has finally ended an auction of some 6,000 patents that has dragged on for months. After declaring bankruptcy two years ago, Nortel has been selling off its most valuable remaining assets, including its stock of highly sought-after technology patents. The company finally agreed today to sell the patents to a group of companies for $4.5 billion in cash. The Canadian telecom company was forced to file for bankruptcy after losing nearly $6 billion in 2008.
The group, led by Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), included Research in Motion (NASDAQ:RIMM), Sony (NYSE:SNE), Ericsson (NASDAQ:ERIC), and EMC (NYSE:EMC), and beat out competing bidders Google (NASDAQ:GOOG) and Intel (NASDAQ:INTC). Nortel Chief Strategic Officer George Riedel commented on the results, “The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world.” The sales will not be final until reviewed at a July 11th hearing where it must be approved by both U.S. and Canadian courts.
Google was the first company to make a bid on the Nortel patents, in a move widely thought to be motivated by a need to defend itself against incoming infringement suits. The company’s Android OS phones have been the target of numerous legal claims by Microsoft, Apple, Oracle (NASDAQ:ORCL), and other competitors. Google attorney Ken Walker wrote, “[We bid in hopes to] create a disincentive for others to sue Google…The tech world has recently seen an explosion in patent litigation, often involving low-quality software patents.”
The leading search engine and mobile technology company, already legally troubled by a pending FTC investigation and an anti-competitive suit from French company 1plusV, may see its legal bills soar as a result of its disappointing failure to secure the trove of Nortel’s patents.