The US DoJ is reportedly concered that bids for Nortel patents will be used to reduce competition in the telecoms market

As interest in defunct kit maker Nortel’s patent portfolio heightens, the US Department of Justice (DoJ) is reported to be taking a close interest in the bidders. Apple is the latest company reported to be interested in making a purchase after Google opened bidding with a $900m offer in April. Now the DoJ is said to be concerned that the patents will be used to stymie competition in the telecoms sector.

While the DoJ’s examination of Google’s bid has turned up nothing untoward – courts in both the US and Nortel’s home base of Canada have approved the offer – the agency’s concerns are easy to understand in light of Mountain View’s open admission that its bid for the patents is in no small part motivated by a desire to protect itself from aggressive patent claims from its competitors. Google’s recent moves into the mobile and desktop operating systems space has seen it attract a number of patent-related challenges from the likes of Oracle.

Other potential buyers have until June 20 to submit their offers for the 6000+ patent portfolio and RIM, Apple and Nokia are rumoured to be interested. According to reports in the Wall Street Journal, it’s the interest from Cupertino that’s set the alarm bells ringing at the DoJ’s antitrust division, given Apple’s reputation for ring-fencing its interests and intellectual property holdings. The WSJ says that Apple is in talks with the DoJ about these concerns.

Google’s bid, which forms a “stalking horse” arrangement allowing other companies to come in with higher offers, comes with a $25m “break up fee” in the event that another bidder is successful. In order to beat Google, Mountain View’s offer must be bettered by at least $29m; offers over and above that figure must come in $5m increments.

The patents in question include both granted and pending applications covering wireless, 4G/LTE, data networking, optical, voice, social networking and internet applications, among others. Nortel-owned technology is used in Blackberry, iPhone and Android devices. Microsoft already has licensing agreements in place with Nortel; these agreements will remain in place regardless of who wins the bidding war.

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  • Probably a stupid thought, but for what it’s worth…let the government buy them and put them all in the public domain? And while they’re at it, (re-)re-visit the overall patent process on high-tech items, particularly software? Our system seems to dote on layering complexity on complexity as a sort of make-work process, which in the end benefits only big business and their lawyers (and the bureaucracy), doing little for the consumer.

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