Nortel Networks Sells Patent Portfolio To Consortium Led by

July 01, 2011

Nortel Networks, the bankrupt Canadian telecommunications equipment maker, said early this morning that it has agreed to sell its 6,000 patent portfolio to a tech consortium led by Apple Inc (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) for $4.5 billion in cash.George Riedel, chief strategy officer of Nortel said, ''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 consortium also includes Research in Motion (NASDAQ:RIMM), Sony Corp (NYSE:SNE), Ericsson (NASDAQ:ERIC), and EMC Corp (NYSE:EMC).The group beat out bids by rivals Google (NASDAQ:GOOG) and Intel (NASDAQ:INTC) for the package of patents and patent applications that Nortel had accumulated while it was one of the largest telecom equipment makers in North America.On Friday, Kent Walker, Google's general counsel said in an e-mail message that the auction's outcome was ''disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition."Mr. Walker had earlier written that Google's bid was an effort 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."Apple and Microsoft have shown themselves to be much more aggressive in patent litigation than Google has, partly because Google has relatively few patents of its own, especially in the telecommunications field.