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MacRumors
Jul 1, 2011, 12:21 AM
http://images.macrumors.com/im/macrumorsthreadlogo.gif (http://www.macrumors.com/2011/07/01/nortel-patents-sold-to-consortium-which-includes-apple/)


http://images.macrumors.com/article-new/2011/06/nortel_logo1.jpg


Nortel announced (http://www.marketwatch.com/story/nortel-announces-the-winning-bidder-of-its-patent-portfolio-for-a-purchase-price-of-us45-billion-2011-06-30?reflink=MW_news_stmp) that they had concluded an auction to sell of its patents and patent applications to a consortium consisting of Apple, EMC, Ericsson, Microsoft, RIM and Sony. The final winning bid was $4.5 billion and includes over 6,000 patents and patent applications covering wireless, 4G, networking optical, voice internet, semiconductors and more. "Following a very robust auction, we are pleased at the outcome of the auction of this extensive patent portfolio", said George Riedel, Chief Strategy Officer and President of Business Units, Nortel. "The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world."We had previously reported (http://www.macrumors.com/2010/12/10/apple-reportedly-bidding-to-purchase-nortel-patent-assets/) that Apple had been interested in buying up the patents off Nortel Networks which had filed for bankruptcy in 2009. The interest in the portfolio was significant due to the broad reach of the patents, especially in the area of wireless networking and LTE technology. Google was also said (http://abcnews.go.com/Technology/wireStory?id=13971233) to be one of the early interested parties by placing an opening bid of $900 million on the patents.

One research firm has estimated that there are 105 patent families deemed essential to deployment of LTE (4G) technology, with Nokia controlling 57 of those families. Ericsson is said to control 14 families, while Nortel, Qualcomm, and Sony are each reported to control about seven families. The companies that are part of the winning bid will presumably provide access to these patents to those companies.



Article Link: Nortel Patents Sold to Consortium which Includes Apple (http://www.macrumors.com/2011/07/01/nortel-patents-sold-to-consortium-which-includes-apple/)



JAT
Jul 1, 2011, 12:28 AM
Oh god, Google and Nokia not listed. Can't wait for the next round of annoying patent wars. :rolleyes:

SandynJosh
Jul 1, 2011, 12:29 AM
This all makes me wonder how much of the cost to make a phone is the cost of buying all the licenses to make the phone...

Of course the more you own, the less you need to buy a license for, but still...

cmaier
Jul 1, 2011, 12:29 AM
Oh god, Google and Nokia not listed. Can't wait for the next round of annoying patent wars. :rolleyes:

Nokia has its own ammunition. Google, on the other hand....

shartypants
Jul 1, 2011, 12:31 AM
Refreshing to see so many patents being sold to a consortium, hopefully that will cut down on suing, although I'm sure Google is not happy. Microsoft will probably help out Nokia since they are building their phones.

SandynJosh
Jul 1, 2011, 12:33 AM
Oh god, Google and Nokia not listed. Can't wait for the next round of annoying patent wars. :rolleyes:

Google does not make phones, so it's of no matter to them, however, I'm sure they would love to own the patents just for the income possibilities.

Nokia owns enough patents to offset not owning these, but isn't Microsoft the new owner of Nokia?

batchtaster
Jul 1, 2011, 12:34 AM
Here come the counter-suits against Nokia.

How about everyone just call it even and go back to making better phones?

commander.data
Jul 1, 2011, 12:47 AM
Nice to see Apple, Microsoft, and RIM working together. With companies like Apple and Microsoft having significant cash reserves it's interesting they decided not to go it alone. Based on the sharing, I guess this means they really are planning on using these patents for defense rather than offense.

alphaod
Jul 1, 2011, 12:50 AM
I don't understand why people are concerned about Nokia; according to the official release it clearly says Nokia owns 57 of the 105 requisite patent families for LTE which means they already have more than half of the patents. Furthermore with the Microsoft-Nokia going on, I'm pretty sure they'll be covered no matter what.

Google on the other hand seems to have lost a battle here, but I imagine they will have an agreement going on in the background if they haven't already.

Jerome Morrow
Jul 1, 2011, 12:51 AM
Good for Apple.

commander.data
Jul 1, 2011, 12:54 AM
Google on the other hand seems to have lost a battle here, but I imagine they will have an agreement going on in the background if they haven't already.
Did Google actually want, as in had to have, these patents? Their bid was the stalking horse bid, just to assign an initial value to the patents and get the auction started. By agreeing to be the stalking horse, Google obviously wouldn't mind having them. But if they had to have them, wouldn't they have held their cards closer to their chest until the actual auction and let someone else be the stalking horse?

min_t
Jul 1, 2011, 12:56 AM
Refreshing to see so many patents being sold to a consortium, hopefully that will cut down on suing, although I'm sure Google is not happy. Microsoft will probably help out Nokia since they are building their phones.

MSFT and NOK probably have a shared patent clause. GOOG, on the other hand was not part of the consortium because they made enemies of 3 members on the list.

DisMyMac
Jul 1, 2011, 12:58 AM
Were the aliens paid from whom we reverse-engineered much of today's technology? I'd love to see them enforce their patent laws on the earth.

rotarydialz
Jul 1, 2011, 12:59 AM
So sad that companies are forced to prevent patent trolls by buying up patents. I doubt a group of friends could invent a successful tech product in their garage in today's cruel legal world.

PapaStu
Jul 1, 2011, 01:05 AM
Nokia owns enough patents to offset not owning these, but isn't Microsoft the new owner of Nokia?

Not at all. Just one of these constant rumors that MS is going to buy them. Nothing has happened yet.

a.gomez
Jul 1, 2011, 01:33 AM
well Google does not make phones - that is what Sony Ericsson is for

JosephKr
Jul 1, 2011, 01:58 AM
The interesting thing here is that RIM is part of the consortium. RIM can use all the help it can get right now. I also wonder how much each company footed. I suspect that Apple and Microsoft were the biggest contributors. It should be interesting to see how this affects the stock prices when the markets open in a few hours.

Qramohn
Jul 1, 2011, 02:24 AM
So Googles doesn't make phones except for the Nexus models? :cool:

JAT
Jul 1, 2011, 02:27 AM
Nokia has its own ammunition. Google, on the other hand....
Will buy some.

macrumorsuser10
Jul 1, 2011, 02:29 AM
The companies that should be worried are the Android handset OEMs: Motorola, LG, HTC, etc. Google has a history of not covering the asses of its hardware partners.

mKizzo
Jul 1, 2011, 02:34 AM
"...concluded an auction to sell OFF its patents.."

Rodimus Prime
Jul 1, 2011, 02:36 AM
So Googles doesn't make phones except for the Nexus models? :cool:

Google does not even make that. They have someone else make it.

Nexus One was HTC.
Nexus S was Samsung.

The next Nexus the rumor mil is either Motorola or LG.

ChazUK
Jul 1, 2011, 02:50 AM
Wirelessly posted (Mozilla/5.0 (Linux; U; Android 2.2; en-gb; ZTE-BLADE Build/FRF91) AppleWebKit/533.1 (KHTML, like Gecko) Version/4.0 Mobile Safari/533.1)

So Googles doesn't make phones except for the Nexus models? :cool:

Like Rodimus said, they have all been made by third parties.

It seems that Google isn't interested in the hardware game.

orfeas0
Jul 1, 2011, 02:57 AM
I don't understand how does that company declare bankruptcy? Don't companies use their patents -> give them some steady income? Although "bankruptcy" is subjective, they just made 4,5billions, I don't think they're bankrupt any more :)

CFreymarc
Jul 1, 2011, 03:20 AM
Let the patent suite gang bang being! I am sure that John J. Roese is laughing to the bank seeing his girl married off and violated.

Thex1138
Jul 1, 2011, 03:44 AM
Sony and Ericsson were listed as different entities...
:rolleyes:

Thex1138
Jul 1, 2011, 03:52 AM
Google does not even make that. They have someone else make it.

Nexus One was HTC.
Nexus S was Samsung.

The next Nexus the rumor mil is either Motorola or LG.

Yes... the next iPhone Skin Job........ the Nexus 6
:D

'More iPhone than iPhone' - :apple:

itickings
Jul 1, 2011, 03:54 AM
Sony and Ericsson were listed as different entities...
:rolleyes:

What's funny about that? They are different entities after all...

It would have made no sense at all for the separate, joint mobile phone company to take their place here.

Thex1138
Jul 1, 2011, 04:01 AM
What's funny about that? They are different entities after all...

It would have made no sense at all for the separate, joint mobile phone company to take their place here.

Great! Their parent companies put fingers in the pie instead of the joint venture entity that makes all their phones... next.

So each parent company hedges in case they decide to split later... that's confidence for ya... anyway.

Oletros
Jul 1, 2011, 04:02 AM
Yes... the next iPhone Skin Job........ the Nexus 6
:D

'More iPhone than iPhone' - :apple:

Yes, both of them were iPhone skin jobs :rolleyes:

itickings
Jul 1, 2011, 04:17 AM
Great! Their parent companies put fingers in the pie instead of the joint venture entity that makes all their phones... next.

So each parent company hedges in case they decide to split later... that's confidence for ya... anyway.

Wait, what, you actually believe the patents are only good for making mobile phones? :eek:

Telomar
Jul 1, 2011, 04:17 AM
Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_3_3 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8J2 Safari/6533.18.5)

What's funny about that? They are different entities after all...

It would have made no sense at all for the separate, joint mobile phone company to take their place here.

Great! Their parent companies put fingers in the pie instead of the joint venture entity that makes all their phones... next.

So each parent company hedges in case they decide to split later... that's confidence for ya... anyway.

People seem to be forgetting there was a lot more to this than phone patents. Nortel had a lot of high end networking patents, Ericcsson's core business, as well as patents in software and networking generally. The reason that they entered as parent companies is they wanted different things.

It's worth noting these patents were more about networking products.

s1m
Jul 1, 2011, 04:51 AM
I don't understand how does that company declare bankruptcy? Don't companies use their patents -> give them some steady income? Although "bankruptcy" is subjective, they just made 4,5billions, I don't think they're bankrupt any more :)

Bankruptcy in its purest form is having less assets than liabilities. The fact that you own a patent doesnt mean that you are actually earning money for a start. You could have the patent on cold fusion but not earning any money as no-one might be licensing the patent.

Also in terms of bankruptcy - the value attributed to the patent asset might be a lot less than the amount paid at this point. Think of it as a fire sale - for bankruptcy purposes they might value the patent a lot lower than it was eventually sold for.

Finally - although they got $4.5Bn for the patents - they might have had $10Bn in liabilities...

brock2621
Jul 1, 2011, 05:03 AM
Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_0 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.0.2 Mobile/9A5248d Safari/6533.18.5)

So does each company have access to all patents both for products and legal offense/defense?

FvL
Jul 1, 2011, 05:06 AM
Many People were expecting Google to bid on the Nortel patents. But one has to take into consideration that Android costs Google already a lot of money and I wonder how much they get back from it. I guess Google just wasn't prepared to pay billions for patents just to protect the Android licensees.

mdriftmeyer
Jul 1, 2011, 05:47 AM
Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_3_3 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8J2 Safari/6533.18.5)



People seem to be forgetting there was a lot more to this than phone patents. Nortel had a lot of high end networking patents, Ericcsson's core business, as well as patents in software and networking generally. The reason that they entered as parent companies is they wanted different things.

It's worth noting these patents were more about networking products.

99% of comments reveal people aren't or have yet to have a long history working in the heavy IT industry. Nortel was one of the big boys until mismanagement took over.

dethmaShine
Jul 1, 2011, 05:53 AM
“This outcome is disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition,”

Google's hypocrisy goes to 11.

Xenc
Jul 1, 2011, 06:22 AM
I knew I should have patented everything when I had the chance!

nwcs
Jul 1, 2011, 06:48 AM
99% of comments reveal people aren't or have yet to have a long history working in the heavy IT industry. Nortel was one of the big boys until mismanagement took over.

Yep but it won't stop them from spouting off as if they are experts.

From an Apple perspective this is a big win. It provides more leverage for them when negotiating with vendors and companies for future iOS components. It also provides a shared revenue stream. The only surprise for me is that RIM is a part of this. Apple must feel good about their strategic direction to consort with them. Or there are behind the scenes things taking shape that won't be revealed for some time to come.

johnny_b
Jul 1, 2011, 06:59 AM
Only in america. Generic patents are so stupid! If the wheel was a new invention I am sure that would had been patented that to.

Thex1138
Jul 1, 2011, 07:05 AM
Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_3_3 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8J2 Safari/6533.18.5)



People seem to be forgetting there was a lot more to this than phone patents. Nortel had a lot of high end networking patents, Ericcsson's core business, as well as patents in software and networking generally. The reason that they entered as parent companies is they wanted different things.

It's worth noting these patents were more about networking products.
Yes... Networking, exchanges, comms equipment, infrastructure design.
Yes I do know. But the focus of the chatter is about phone competitiveness.

*LTD*
Jul 1, 2011, 07:26 AM
Yes... the next iPhone Skin Job........ the Nexus 6
:D

'More iPhone than iPhone' - :apple:

Do you like our phone?

Must be expensive.

Very.

;)

JAQ
Jul 1, 2011, 07:27 AM
So this "consortium" exists as an agreement between major players in the telecom industry to limit the use of these technologies to its members, thereby locking out new competitors? In my great-granddaddy's day they called that a "trust", and passed laws against it.

OllyW
Jul 1, 2011, 07:38 AM
So this "consortium" exists as an agreement between major players in the telecom industry to limit the use of these technologies to its members, thereby locking out new competitors? In my great-granddaddy's day they called that a "trust", and passed laws against it.

I doubt they've bought them to limit access to other companies, it's more likely they want to gain leverage for cross-licensing with the other LTE patent holders.

The companies that are part of the winning bid will presumably provide access to these patents to those companies.

nwcs
Jul 1, 2011, 07:38 AM
So this "consortium" exists as an agreement between major players in the telecom industry to limit the use of these technologies to its members, thereby locking out new competitors? In my great-granddaddy's day they called that a "trust", and passed laws against it.

So you're just assuming they won't license the patents? Nice straw man.

Oletros
Jul 1, 2011, 07:41 AM
So this "consortium" exists as an agreement between major players in the telecom industry to limit the use of these technologies to its members, thereby locking out new competitors? In my great-granddaddy's day they called that a "trust", and passed laws against it.

If there are essential licenses they must license them

Gasu E.
Jul 1, 2011, 08:01 AM
I knew I should have patented everything when I had the chance!

Prior art (http://en.wikipedia.org/wiki/Bible).

erzhik
Jul 1, 2011, 08:56 AM
Oh god, Google and Nokia not listed. Can't wait for the next round of annoying patent wars. :rolleyes:

Nokia has more current patents than those companies who bought some from Nortel. And now that Nokia shares its patents with Microsoft, Microsoft will come out on top.

PeterQVenkman
Jul 1, 2011, 09:39 AM
New lawsuits to follow.

http://www.soundonsight.org/wp-content/uploads/2010/07/mexican-standoff-photo.jpg

kdarling
Jul 1, 2011, 09:42 AM
So this "consortium" exists as an agreement between major players in the telecom industry to limit the use of these technologies to its members, thereby locking out new competitors?

Nope.

In my great-granddaddy's day they called that a "trust", and passed laws against it.

It's still against anti-trust laws to withhold a group of patents vital to an industry.

That's why the government had a little talk with Apple before they bid in the auction. All the other companies have a long history of licensing patents. Apple does not.

I also suspect this auction is involved with why Apple made a deal for Nokia licenses so suddenly. I think they were showing the government that they could play nice and/or it was a requirement to be a consortium member.

cmaier
Jul 1, 2011, 10:10 AM
So sad that companies are forced to prevent patent trolls by buying up patents. I doubt a group of friends could invent a successful tech product in their garage in today's cruel legal world.

This has absolutely nothing to do with patent trolls. Patent trolls, by definition, do not make, sell, import, or use products that practice the patents they are asserting. Since a troll doesn't make anything, the victim having his own patents is useless- he can't sue the troll in retaliation.

Remember that having these patents doesn't give these companies the right to practice them - it only gives them the right to stop OTHERS from practicing them. So this patent purchase is helpful only for use against non-trolls, like competitors.



So does each company have access to all patents both for products and legal offense/defense?

Probably they all have a cross-license (so none of the companies can sue any of the other companies), but each has their own portion of the patents to use as they see fit (against companies not in the group).


It's still against anti-trust laws to withhold a group of patents vital to an industry.


Says who?

ny3ranger
Jul 1, 2011, 10:38 AM
Microsoft doesnt make phones either. Also Googles hardware manufacturers arent listed in the patent. So any android phone that violates Nortel patents will probably have license or get sued.

Google does not make phones, so it's of no matter to them, however, I'm sure they would love to own the patents just for the income possibilities.

Nokia owns enough patents to offset not owning these, but isn't Microsoft the new owner of Nokia?

jonnysods
Jul 1, 2011, 10:51 AM
Imagine wading through all those patents!

Stok3
Jul 1, 2011, 11:07 AM
with all this patent drama its a wonder tech companies have the time to create products.

Jaro65
Jul 1, 2011, 11:18 AM
Finally - although they got $4.5Bn for the patents - they might have had $10Bn in liabilities...

Which I think they do. I forgot the exact number, but from what I recall it was a bit over $10B.

Funny how this works. I used to work at Nortel some years ago and during the 90's the company was making money left and right. At the same time it was spending as much as it made. For example, they paid $6B to acquire an optical switch manufacturer. Nortel never sold one of those switches....

Anyway, those patents encompass a lot of hard work by many dedicated people. Leave it up to the management to screw the ordinary working folks.

CommodityFetish
Jul 1, 2011, 11:22 AM
I had a dream once that there were no patents and companies had to compete on how they implemented and delivered ideas instead of being granted the legal right to hoard ideas in order to prevent (or charge) anyone else from using them. I don't remember any lawsuits in this dream, and everyone seemed to be much happier.

Lennholm
Jul 1, 2011, 11:34 AM
I had a dream once that there were no patents and companies had to compete on how they implemented and delivered ideas instead of being granted the legal right to hoard ideas in order to prevent (or charge) anyone else from using them. I don't remember any lawsuits in this dream, and everyone seemed to be much happier.

I also had a dream where there were no patents. Technical progress stagnated since it wasn't worth the effort to invest in R&D anymore and all companies soon went bankrupt since the price race to the bottom for the pre-existing technology removed all margins and profits.

cmaier
Jul 1, 2011, 11:38 AM
I had a dream once that there were no patents and companies had to compete on how they implemented and delivered ideas instead of being granted the legal right to hoard ideas in order to prevent (or charge) anyone else from using them. I don't remember any lawsuits in this dream, and everyone seemed to be much happier.

That would be awesome! I can make money hand over fist finding the cheapest foreign labor to implement good ideas that other companies come up with. Oh, wait - those other companies won't come up with any good ideas because it would make more sense for them to wait for someone else to do so and just copying them, thus saving the R&D.

Hmmm. Well, at least the pharmaceutical companies will spend a billion dollars to research a drug that they can never make their money back on due to immediate cloning by generics manufacturers. I mean, what do I care - I probably am not going to get any diseases.

Hey, we may be stuck with lame technologies and no innovation, and we may all die from curable diseases, but at least there won't be any lawsuits.

Laird Knox
Jul 1, 2011, 11:48 AM
Only in america. Generic patents are so stupid! If the wheel was a new invention I am sure that would had been patented that to.

Dang those American companies buying up patents! Shame on you Ericsson, Sony and RIM! :rolleyes:

ThisIsNotMe
Jul 1, 2011, 12:05 PM
Only in america. Generic patents are so stupid! If the wheel was a new invention I am sure that would had been patented that to.

Ya. The Constitutional mechanism to protect innovation that has made America the most innovative country this planet has ever seen is pretty stupid.........

cmaier
Jul 1, 2011, 12:21 PM
Only in america. Generic patents are so stupid! If the wheel was a new invention I am sure that would had been patented that to.

Lots of the patents aren't american.

Nice analysis, though ;-)

jzuena
Jul 1, 2011, 12:26 PM
Only in america. Generic patents are so stupid! If the wheel was a new invention I am sure that would had been patented that to.

Except that this auction happened in Canada and 1/2 of the winning consortium members (Ericsson, RIM and Sony) aren't American.

Edit: looks like I'm 4th in line on this comment!

Stok3
Jul 1, 2011, 12:38 PM
Ya. The Constitutional mechanism to protect innovation that has made America the most innovative country this planet has ever seen is pretty stupid.........

actually this patent mess is doing the opposite of the original intentions.

cmaier
Jul 1, 2011, 12:46 PM
actually this patent mess is doing the opposite of the original intentions.

How so? We've had more patents filed and more lawsuits than ever before, and innovation is happening more than ever.

CommodityFetish
Jul 1, 2011, 01:08 PM
I guess there wasn't any technical progress in human history before patents were instituted. Good thing they came along! And open-source software of course never makes any technical progress because it doesn't rely on the patent system.

"Linux distributions are also commonly used as operating systems for supercomputers: since November 2010, out of the top 500 systems, 459 (91.8%) run a Linux distribution."

http://en.wikipedia.org/wiki/Linux#Servers.2C_mainframes_and_supercomputers

Rodimus Prime
Jul 1, 2011, 01:09 PM
I wonder if they will consortium will form a new company who job is to handle the patents much like MEPGLA. They each own a respective amount based on the amount they bid.

Lennholm
Jul 1, 2011, 01:24 PM
I guess there wasn't any technical progress in human history before patents were instituted. Good thing they came along! And open-source software of course never makes any technical progress because it doesn't rely on the patent system.

"Linux distributions are also commonly used as operating systems for supercomputers: since November 2010, out of the top 500 systems, 459 (91.8%) run a Linux distribution."

http://en.wikipedia.org/wiki/Linux#Servers.2C_mainframes_and_supercomputers

Technical progress in the past was sloooow. There were never any millions of $ for R&D, there still isn't in the open-source community. Open-source is all about software and software can be developed rather cheaply by as little as one developer. Hardware simply can't be, it has to have the funding.
There is a reason technological progress has exploded since the patent system appeared.

CommodityFetish
Jul 1, 2011, 01:44 PM
Technical progress in the past was sloooow. There were never any millions of $ for R&D, there still isn't in the open-source community. Open-source is all about software and software can be developed rather cheaply by as little as one developer. Hardware simply can't be, it has to have the funding.
There is a reason technological progress has exploded since the patent system appeared.

Fair enough, still the current system as it operates today seems much less than ideal, and often counter-productive and not to be serving the public good in the way the patent system is supposed to. Others have made the critique better than I can, for example see:
http://en.wikipedia.org/wiki/Criticism_of_patents

Also, open-source hardware does exist, if much less fully developed than software:
http://en.wikipedia.org/wiki/Open-source_hardware

cmaier
Jul 1, 2011, 01:58 PM
Fair enough, still the current system as it operates today seems much less than ideal, and often counter-productive and not to be serving the public good in the way the patent system is supposed to. Others have made the critique better than I can, for example see:
http://en.wikipedia.org/wiki/Criticism_of_patents

Also, open-source hardware does exist, if much less fully developed than software:
http://en.wikipedia.org/wiki/Open-source_hardware

Whether something is open-sourced or not has nothing to do with patents. "Open-source" refers to copyright law, not patent law.

ThisIsNotMe
Jul 1, 2011, 04:17 PM
How so? We've had more patents filed and more lawsuits than ever before, and innovation is happening more than ever.

Its because its "cool" to hate on the "evil" corporations regardless of the (illogical) reasoning.

Jjaro
Jul 1, 2011, 05:18 PM
So, when they are saying "Consortium", does that mean all these businesses came together to buy these patents ad a group? This seems smart, because then no one company will be a "target", know what I'm saying?

EDIT - Oh, looks like my question was already answered. My bad. That's what I get for posting then reading through.

Glideslope
Jul 1, 2011, 06:00 PM
Nice to see Apple, Microsoft, and RIM working together. With companies like Apple and Microsoft having significant cash reserves it's interesting they decided not to go it alone. Based on the sharing, I guess this means they really are planning on using these patents for defense rather than offense.

Could not agree more. Hard to envision, but the times are a changin fast. :apple:

JorgeNC
Jul 1, 2011, 08:39 PM
Nortel is such a disaster, I can't even believe they're still around. They're also cutting off all benefits to retirees and those on medical leave. When will they finally just go away?

liavman
Jul 1, 2011, 09:37 PM
Some interesting details on the auction proceedings:

http://beta.news.yahoo.com/dealtalk-google-bid-pi-nortel-patents-lost-013854187.html

jsjackso
Jul 1, 2011, 09:53 PM
Which I think they do. I forgot the exact number, but from what I recall it was a bit over $10B.

Funny how this works. I used to work at Nortel some years ago and during the 90's the company was making money left and right. At the same time it was spending as much as it made. For example, they paid $6B to acquire an optical switch manufacturer. Nortel never sold one of those switches....

Anyway, those patents encompass a lot of hard work by many dedicated people. Leave it up to the management to screw the ordinary working folks.

I think it's quite a bit more than $10B once European debt is factored in.

I worked there up until being laid off in Sept. 2009 and you're very right that they were blowing money like crazy for a while. There were many, many extremely stupid business decisions during the 11 years I was there, and buying other companies was only one type of bad decision. An overly pervasive attitude that analyzing and changing processes via Lean Six Sigma could fix any problem did not help the situation. Neither did offshoring a huge amount of development, testing, and support.

mjtomlin
Jul 1, 2011, 10:00 PM
It's still against anti-trust laws to withhold a group of patents vital to an industry. That's why the government had a little talk with Apple before they bid in the auction. All the other companies have a long history of licensing patents. Apple does not.

Curious that you would say that about Apple, as they have a long history of licensing IP as well. They have been around 3 1/2 decades now. They've had a long standing cross-licensing agreement with Microsoft that dates back before Windows.

I also suspect this auction is involved with why Apple made a deal for Nokia licenses so suddenly. I think they were showing the government that they could play nice and/or it was a requirement to be a consortium member.

I don't think that has anything to do with it. As recently as December of 2010, Apple joined with Oracle, EMC and Microsoft to buy up some Novell patents. I think Apple's main goal here is to make sure these patents don't end up in the hands of a single entity. If you know anything of the Nokia/Apple battle, you'd understand why Apple doesn't want to go through that again.

I also suspect that the results of the Nokia/Apple case came about due to Apple buying up a couple hundred Freescale (Motorola) patents in May, that were related to radio communications, some of which may have been the foundation for some of Nokia's IP and were licensed to Nokia by Motorola. Personally I believe that's what the "cross-licensing" agreement was.

jsjackso
Jul 1, 2011, 10:03 PM
Nortel is such a disaster, I can't even believe they're still around. They're also cutting off all benefits to retirees and those on medical leave. When will they finally just go away?

They're barely still around. There are a lot of legal wranglings going on at the moment concerning long term disability benefits, pensions, and the substantial amount of severance pay they chose not to pay to the rank and file who were laid off in the US and Canada (not sure about severance in other countries). Browse through the docket over at http://chapter11.epiqsystems.com/NNI/docket/Default.aspx?rc=1 if you're curious about the proceedings. There are tons of lawyers getting rich off of this and eating up money that could go towards those with claims :(

AppleMacFinder
Jul 2, 2011, 02:16 AM
What an expensive paper :D

dethmaShine
Jul 2, 2011, 07:37 AM
http://tech.fortune.cnn.com/2011/07/02/apple-takes-the-patent-wars-seriously-google-not-so-much/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+fortunebrainstormtech+%28Fortune+Brainstorm+Tech%29

roocka
Jul 2, 2011, 08:51 AM
Nortel Networks, the bankrupt Canadian telecom company, came that much closer to disappearing completely yesterday with the cash sale of its portfolio of 6000 patents for $4.5 billion to a consortium of companies including Apple, EMC, Ericsson, Microsoft, Research In Motion (RIM), and Sony. The bidding, which began with a $900 million offer from Google, went far higher than most observers expected and only ended, I’m guessing, when Google realized that Apple and its partners had deeper pockets and would have paid anything to win. This transaction is a huge blow to Google’s Android platform, which was precisely the consortium’s goal.

Google is the youngest of these companies and has probably the smallest patent portfolio, most of which isn’t mobile or telecom related. This puts Google and Android at a legal disadvantage and explains the 45 patent infringement suits that one analyst says Google in presently facing in the mobile area alone.

Google would have preferred to win the auction, but with the consortium sitting on more than $100 billion in cash, the outcome came down to determination, not resources. Google stayed in it only long enough to make sure of the consortium’s intentions and to make the purchase more painful for them, if that mattered.

It certainly mattered to Google, because that $4.5 billion number will be at the heart of the inevitable anti-trust lawsuit Google will file almost immediately. Every good anti-trust lawyer in America just cancelled his or her July 4th holiday to prepare their pitch for Google, which will probably claim Restraint of Trade as well.

Given that the courts will shortly be involved, Google can probably operate unfettered for another 2-3 years, during which they’ll try to build their own mobile patent portfolio. Google may well be able to use the courts to slow the actual Nortel transaction, too, according to my lawyer friends.

So the “Android is dead” story here is way premature.

In the long run, remember, Google will probably be able to use its legal strategy to force the consortium to at least license some or all of the patents. They’ll get a royalty from Google, I suppose, and thus benefit from Android’s success, but then Google is unlikely to be completely deterred, either.

The story everyone seems to be missing here is who gets what in this consortium deal? Most journalists and bloggers seem to assume the winners will all share equally in the IP spoils. But I have people who know people and the word I am hearing it that’s not the way the consortium works at all.

Some consortium members get patents, some get royalties, and some just get freedom from having to pay royalties.

Notice Nokia isn’t in the consortium? The Finnish company is apparently covered by Microsoft, tying Nokia even more firmly to Windows Phone.

Here’s the consortium participation as I understand it. RIM and Ericsson together put up $1.1 billion with Ericsson getting a fully paid-up license to the portfolio while RIM, as a Canadian company like Nortel, gets a paid-up license plus possibly some carry forward operating losses from Nortel, which has plenty of such losses to spare. For RIM the deal might actually have a net zero cost after tax savings, which the Canadian business press hasn’t yet figured out.

Microsoft and Sony put up another $1 billion.

There is a reportedly a side deal for about $400 million with EMC that has the storage company walking with sole ownership of an unspecified subset of the Nortel patents.

Finally Apple put up $2 billion for outright ownership of Nortel’s Long Term Evolution (4G) patents as well as another package of patents supposedly intended to hobble Android.

At the end of the day this deal isn’t about royalties. It is about trying to kill Android.

cmaier
Jul 2, 2011, 09:44 AM
Nortel Networks, the bankrupt Canadian telecom company, came that much closer to disappearing completely yesterday with the cash sale of its portfolio of 6000 patents for $4.5 billion to a consortium of companies including Apple, EMC, Ericsson, Microsoft, Research In Motion (RIM), and Sony. The bidding, which began with a $900 million offer from Google, went far higher than most observers expected and only ended, I’m guessing, when Google realized that Apple and its partners had deeper pockets and would have paid anything to win. This transaction is a huge blow to Google’s Android platform, which was precisely the consortium’s goal.

Google is the youngest of these companies and has probably the smallest patent portfolio, most of which isn’t mobile or telecom related. This puts Google and Android at a legal disadvantage and explains the 45 patent infringement suits that one analyst says Google in presently facing in the mobile area alone.

Google would have preferred to win the auction, but with the consortium sitting on more than $100 billion in cash, the outcome came down to determination, not resources. Google stayed in it only long enough to make sure of the consortium’s intentions and to make the purchase more painful for them, if that mattered.

It certainly mattered to Google, because that $4.5 billion number will be at the heart of the inevitable anti-trust lawsuit Google will file almost immediately. Every good anti-trust lawyer in America just cancelled his or her July 4th holiday to prepare their pitch for Google, which will probably claim Restraint of Trade as well.

Given that the courts will shortly be involved, Google can probably operate unfettered for another 2-3 years, during which they’ll try to build their own mobile patent portfolio. Google may well be able to use the courts to slow the actual Nortel transaction, too, according to my lawyer friends.

So the “Android is dead” story here is way premature.

In the long run, remember, Google will probably be able to use its legal strategy to force the consortium to at least license some or all of the patents. They’ll get a royalty from Google, I suppose, and thus benefit from Android’s success, but then Google is unlikely to be completely deterred, either.

The story everyone seems to be missing here is who gets what in this consortium deal? Most journalists and bloggers seem to assume the winners will all share equally in the IP spoils. But I have people who know people and the word I am hearing it that’s not the way the consortium works at all.

Some consortium members get patents, some get royalties, and some just get freedom from having to pay royalties.

Notice Nokia isn’t in the consortium? The Finnish company is apparently covered by Microsoft, tying Nokia even more firmly to Windows Phone.

Here’s the consortium participation as I understand it. RIM and Ericsson together put up $1.1 billion with Ericsson getting a fully paid-up license to the portfolio while RIM, as a Canadian company like Nortel, gets a paid-up license plus possibly some carry forward operating losses from Nortel, which has plenty of such losses to spare. For RIM the deal might actually have a net zero cost after tax savings, which the Canadian business press hasn’t yet figured out.

Microsoft and Sony put up another $1 billion.

There is a reportedly a side deal for about $400 million with EMC that has the storage company walking with sole ownership of an unspecified subset of the Nortel patents.

Finally Apple put up $2 billion for outright ownership of Nortel’s Long Term Evolution (4G) patents as well as another package of patents supposedly intended to hobble Android.

At the end of the day this deal isn’t about royalties. It is about trying to kill Android.

People have some weird ideas about how antitrust law works.

kdarling
Jul 2, 2011, 10:40 AM
It's still against anti-trust laws to withhold a group of patents vital to an industry.Says who?

I was speaking in the context of this thread; that is, buying up a pool of patents that have been in use for a while and then withholding their licensing. An example (http://www.tms.org/pubs/journals/JOM/matters/matters-9208.html)I recently read about such a situation was where...

"... one company purchased 72 dominant patents in the field; the court ruled that it was not possible for someone else to make a competitive product without infringing one of the patents. The court stated that while there was nothing inherently wrong with purchasing a patent and enforcing it against an infringer, the intent and underlying purpose of accumulating such a large number of patents amounted to a violation of antitrust laws and patent misuse."

Is that article incorrect? It jibes with several other, more in-depth, papers about patent misuse that I've spent time studying. Your insight is appreciated.

Curious that you would say that about Apple, as they have a long history of licensing IP as well. They have been around 3 1/2 decades now. They've had a long standing cross-licensing agreement with Microsoft that dates back before Windows.

IIRC, most of the cross-licensing with Microsoft was forced by court cases.

Otherwise, do you know of any examples of Apple currently licensing their tech?

When Apple posts a lawsuit against an iPhone competitor, they never state that they just want fair licensing fees. Instead, they always demand that no one else uses their patents.

That's why Apple (and Google) got extra scrutiny (http://arstechnica.com/apple/news/2011/06/apple-bid-on-nortel-patents-getting-anticompetitive-scrutiny.ars) by the feds over this patent auction. The government wanted to make sure that Apple wouldn't simply use the patents to sue more competitors.

cmaier
Jul 2, 2011, 11:05 AM
I was speaking in the context of this thread; that is, buying up a pool of patents that have been in use for a while and then withholding their licensing. An example (http://www.tms.org/pubs/journals/JOM/matters/matters-9208.html)I recently read about such a situation was where...

"... one company purchased 72 dominant patents in the field; the court ruled that it was not possible for someone else to make a competitive product without infringing one of the patents. The court stated that while there was nothing inherently wrong with purchasing a patent and enforcing it against an infringer, the intent and underlying purpose of accumulating such a large number of patents amounted to a violation of antitrust laws and patent misuse."

Is that article incorrect? It jibes with several other, more in-depth, papers about patent misuse that I've spent time studying. Your insight is appreciated.



IIRC, most of the cross-licensing with Microsoft was forced by court cases.

Otherwise, do you know of any examples of Apple currently licensing their tech?

When Apple posts a lawsuit against an iPhone competitor, they never state that they just want fair licensing fees. Instead, they always demand that no one else uses their patents.

That's why Apple (and Google) got extra scrutiny (http://arstechnica.com/apple/news/2011/06/apple-bid-on-nortel-patents-getting-anticompetitive-scrutiny.ars) by the feds over this patent auction. The government wanted to make sure that Apple wouldn't simply use the patents to sue more competitors.

I don't know what the "one court" was or when this occurred, but I've seen this argument fail multiple times (and haven't seen it succeed) - a judge poo pops this exact argument a few months back, in fact. As long as the patent is legally obtained and the owner doesn't try to extend the scope of the patent (as by tying to other products or by interpreting it in an invalid manner) I think it would be very difficult to sustain patent misuse under the current state of the law. The article you cite is very old, and it may have been some district court (and hence not precedent except in that district).

kdarling
Jul 2, 2011, 11:47 AM
As long as the patent is legally obtained and the owner doesn't try to extend the scope of the patent (as by tying to other products or by interpreting it in an invalid manner) I think it would be very difficult to sustain patent misuse under the current state of the law.

Thanks. Except how does that tie into why Dept of Justice antitrust regulators had to clear Apple and Google for bidding in the auction? Clearly the US government currently does believe in potential patent misuse under antitrust laws.

Moreover, the firms in the auction had antitrust lawyers (http://amlawdaily.typepad.com/amlawdaily/2011/07/nortelauction.html)involved.

In her 2008 remarks on The Increasing Role of Antitrust Principles in Defining Patent Rights (http://www.justice.gov/atr/public/speeches/235975.htm), a DOJ assistant Attorney General commented: "Similarly, under certain circumstances, the acquisition of a patent could violate Section 7 of the Clayton Act, or patent licensing terms might constitute illegal tying or price-fixing. "

Hmm. Are you saying that even though the DOJ likes to bring up antitrust in relation to patents, that judges disagree?

cmaier
Jul 2, 2011, 12:17 PM
Thanks. Except how does that tie into why Dept of Justice antitrust regulators had to clear Apple and Google for bidding in the auction? Clearly the US government currently does believe in potential patent misuse under antitrust laws.

Moreover, the firms in the auction had antitrust lawyers (http://amlawdaily.typepad.com/amlawdaily/2011/07/nortelauction.html)involved.

In her 2008 remarks on The Increasing Role of Antitrust Principles in Defining Patent Rights (http://www.justice.gov/atr/public/speeches/235975.htm), a DOJ assistant Attorney General commented: "Similarly, under certain circumstances, the acquisition of a patent could violate Section 7 of the Clayton Act, or patent licensing terms might constitute illegal tying or price-fixing. "

Hmm. Are you saying that even though the DOJ likes to bring up antitrust in relation to patents, that judges disagree?

Wasn't this in a bankruptcy setting? If so,the rules change, as the court would be able to take into account impact on consumers, the industry, etc. (of course, once the patents are disposed of, that's the end of that).

As for the doj thing, it's true, but the aquisition itself would have to be at issue. For example, the acquiring party leveraging a monopoly in order to acquire the patents. (give me your patent or I won't grant you access to the market I control).

And antitrust lawyers had to be involved because these consortia that were bidding could look a lot like collusion.

squirrellydw
Jul 2, 2011, 12:22 PM
Apple is now going to start or buy there own cell network. Then they can add and design the network to work with there phone.


You heard it here first.

cmaier
Jul 2, 2011, 12:33 PM
Apple is now going to start or buy there own cell network. Then they can add and design the network to work with there phone.


You heard it here first.

No we didn't. Others suggested this years ago, and they, too, were ignorantly ignoring that they sell phones throughout the world, not just in the U.S.

jsjackso
Jul 2, 2011, 04:24 PM
I was speaking in the context of this thread; that is, buying up a pool of patents that have been in use for a while and then withholding their licensing. An example (http://www.tms.org/pubs/journals/JOM/matters/matters-9208.html)I recently read about such a situation was where...

"... one company purchased 72 dominant patents in the field; the court ruled that it was not possible for someone else to make a competitive product without infringing one of the patents. The court stated that while there was nothing inherently wrong with purchasing a patent and enforcing it against an infringer, the intent and underlying purpose of accumulating such a large number of patents amounted to a violation of antitrust laws and patent misuse."

Is that article incorrect? It jibes with several other, more in-depth, papers about patent misuse that I've spent time studying. Your insight is appreciated.



IIRC, most of the cross-licensing with Microsoft was forced by court cases.

Otherwise, do you know of any examples of Apple currently licensing their tech?

When Apple posts a lawsuit against an iPhone competitor, they never state that they just want fair licensing fees. Instead, they always demand that no one else uses their patents.

That's why Apple (and Google) got extra scrutiny (http://arstechnica.com/apple/news/2011/06/apple-bid-on-nortel-patents-getting-anticompetitive-scrutiny.ars) by the feds over this patent auction. The government wanted to make sure that Apple wouldn't simply use the patents to sue more competitors.

I don't know anything about the antitrust angle, but the IEEE is worried about Nortel's previous arrangements with regards to their and others' uses of the patents in question. From the main document in docket #5816 on the Epiq site for Nortel: "The Institute of Electrical and Electronics Engineers, Inc. (“IEEE”) submits this limited objection to the Sale Motion. For clarity, IEEE states at the outset that it takes no position on which party should be permitted to purchase the patents at issue or on the terms of any purchase agreement. IEEE’s sole concern is that the bankruptcy process not be used in a way that permits a successor patent-holder to disavow the patent commitments that IEEE, other standards setting organizations (SSOs), entire industries, and end-users have relied upon."

squirrellydw
Jul 2, 2011, 04:49 PM
No we didn't. Others suggested this years ago, and they, too, were ignorantly ignoring that they sell phones throughout the world, not just in the U.S.


Wrong, the ignorant thing is thinking Apple has to do this in other countries, when has Apple ever launched a product in all the other parts of the world at the same time besides computers? it is usually rolled out after the U.S.

I doubt this will happen but you never know,

You heard it here first :)