Top Stories -   

1

Judges in U.S., Canada approve Nortel patents sale

A man walks past a company sign at a Nortel Networks office tower in Toronto on Feb. 25, 2009. (Nathan Denette / THE CANADIAN PRESS)
A man walks past a company sign at a Nortel Networks office tower in Toronto on Feb. 25, 2009. (Nathan Denette / THE CANADIAN PRESS)

View Larger Image

A A |  Email ThisEmail  | Print Facebook   

Date: Tuesday Jul. 12, 2011 7:38 AM ET

WILMINGTON, Delaware — U.S. and Canadian judges on Monday approved a $4.5 billion cash bid from a consortium that includes smartphone makers Apple and Research In Motion for thousands of patents held by bankrupt telecom-equipment maker Nortel Networks Corp.

The judges approved the results of Nortel's patent auction at a joint hearing Monday, just over a week after the consortium offered five times more than Google Inc.'s initial bid of $900 million for some 6,000 patents and patent applications.

The purchase -- and its approval -- represent a significant win for a consortium of companies that includes Apple Inc., EMC Corp., LM Ericsson AB, Microsoft Corp., Research in Motion Ltd., and Sony Corp. Phones running Google's Android system compete with software and devices made by the new holders of the Nortel patents. The patents cover many technologies, including data networking, semiconductors and wireless systems known as fourth generation, or 4G.

Nortel has said the portfolio "touches nearly every aspect of telecommunications and additional markets ... including Internet search and social networking." They are among the last major assets of Toronto-based Nortel, which filed for bankruptcy protection in 2009. The company has been selling off its operations bit by bit since then.

The sale of the Nortel patents comes as smartphone manufacturers square off in legal battles over such common features as swiping gestures on touch screens. Such lawsuits could allow patent holders to capitalize on their rivals' success in the market through royalty settlements.

Google had said it wanted the patents to defend itself against lawsuits from other companies until Congress enacts broader changes to the patent system to help reduce such litigation. Google gives away its Android software for free, counting on its popularity to drive usage of other Google services, such as search and maps.

Attorneys for Nortel and its official committee of unsecured creditors praised the results of the patent auction. Nortel attorney Lisa Schweitzer said the final price, which came after 19 rounds of bidding, is more than the combined total received from Nortel's previous bankruptcy asset sales. Including the patent sale, Nortel has realized roughly $7.7 billion from its asset sales.

"This truly is a 'wow' transaction," said David Botter, an attorney representing Nortel's official creditors committee.

Derrick Tay, an attorney representing Nortel in Canada, said the auction is a "shining example" of what can be achieved in a bankruptcy case.

"I don't believe a dollar was left on the table," Tay told Ontario Superior Court of Justice Judge Geoffrey Morawetz, who conducted the joint hearing with U.S. Bankruptcy Judge Kevin Gross in Delaware via videoconference.

Gross described the result of the auction as "quite extraordinary" and said it would be a mistake for the court not to give its approval.

"It's not every day that a judge has an opportunity to make a $4.5 billion mistake," he quipped.

The sale, which includes a good faith deposit of $54 million already delivered to Nortel, is expected to close within 30 days.

Share with your social Network:

Facebook DIGG Newsvine Delicious Twitter StumbeUpon Reddit Yahoo! Buzz

 

Advertisement

Contest

Today's Top Stories

Labour Minister Lisa Raitt appears on CTV's Power Play on Monday, May 28, 2012.

Federal government orders end to CP Rail strike

More   51 Comments 51    12 Video(s) 12

Dominic and Abby Maryk were found in Mexico four years after allegedly being abducted by their father.

Extradition sought in Winnipeg missing children case

More   4 Comments 4    3 Video(s) 3

Protesters opposing Quebec student tuition fee hikes demonstrate in Montreal, Sunday, May 27, 2012. (Graham Hughes / THE CANADIAN PRESS)

Quebec, students resume talks on tuition hikes

More   26 Comments 26    1 Video(s) 1