The Canadian government is set to investigate the sale of Nortel's patents

The Nortel patents auction saga took another twist Wednesday when Canadian Industry Minister Christian Paradis said that his government will hold an investigation into the sale to establish whether it complies with the terms of the Investment Canada Act.

On Monday, it was announced that a tech-industry consortium including Apple, Ericsson and Microsoft had successfully bid $4.5bn for Nortel’s patent assets, beating a highly-publicised Google campaign to the gavel. Under the terms of the Investment Canada Act, which covers foreign investment, the sale of any asset valued at more than C$312m must automatically be reviewed by the government to assess whether or not it’s of benefit to the country.

On the face of it, it would appear that the consortium has little to worry about: commentators in Canada have said that the patents were recorded as having next to no value on Nortel’s asset sheet, thanks in no small part to the difficulty companies have assessing the value of patents prior to their licensing or sale. It’s also unclear whether or not Nortel’s patent assets can be viewed as a “business” in its own right – a requirement of the law in question – as the company is reported to have made less than $10m a year on licensing and royalty payemtns.

What is giving rise to concern, however, is a growing sense that the sale will have a knock-on effect on competition. Prior to the auction, Google had been vocal about its motivation for bidding for the patents. The search giant claimed it needed to build up its patent portfolio to defend itself against legal attacks from rivals. With Android under increasing pressure from intellectual property claims, many commentators view the consortium’s bid for the patents not as a measure to protect themselves from each other so much as a massive arsenal with which to attack Google.

Under the circumstances, many observers found Mountain View’s approach to the auction a tad bewildering : the mathematically inclined among commentators pointed out that Google’s bids were based on obscure mathematical numbers such as the Brun’s and Meissel-Mertens constants and, once the bidding went past the $3bn mark, the company bid $3.14159bn – or Pi.

The Canadian government has only rejected foreign takeover bids on two previous occasions. Last year, BHP Billiton had a hostile takeover play for Potash Corp thrown out on the grounds of it offering no benefit to the country; in 2008, local aerospace technology firm McDonald Dettwiler was prevented from selling its space division to American defence firm Alliant Techsystems.

A consortium including Apple and Microsoft has successfully bid $4.5bn for Nortel's patent assets

The bunfight for Nortel’s patent chest concluded yesterday, with Chief Strategy Officer George Riedel’s announcement that “following a very robust auction”, the winning bid came from a buyer too big for even Google to take on.

Following months of speculation and a $900m kick-off bid from Mountain View, the booty has gone to a consortium that reads like a Who’s Who of the tech industry: Apple, EMC, Ericsson, Microsoft, RIM and Sony. Even with names like that in the mix, the $4.5bn price paid is still pretty eye-watering or, as Nortel’s Riedel preferred to put it, “unprecedented.”

Swedish kit-making giant Ericsson has confirmed its contribution of $340m to the deal; RIM is reported to have stumped up $770m, with no news yet on how much Microsoft or Apple have contributed, or how the spoils are to be shared out. According to a statement from Ericsson Chief Intellectual Property officer Kasim Alfalahi, the company believes the consortium is “in the best position to utilise the patents in a manner that will be favourable to the industry in the long term.”

Whether the long-term favourability will include Google remains to be seen, however. Since the search giant’s forays into the mobile and desktop operating systems space, it has come under increasing attack from rivals claiming its technologies infringe on their patent holdings. Oracle is currently chasing the company down directly over claims that Android infringes on Java, seeking over $6bn in damages.

Other rivals such as Apple and Microsoft have taken a less direct approach, suing Google partners such as HTC and Motorola over alleged Android infringements. Microsoft, for its part, has successfully turned Android into a cash-cow for Redmond: estimates from Citi and Asymco suggest the company makes five times more money collecting Android-related patent royalties from HTC than it does from sales of its home grown Windows 7 phone.

Along with HP, Motorola and Nokia, Microsoft had been opposed to Google’s attempt to purchase the Nortel patents. The company had said that, under the terms of a 2006 deal, it had a “worldwide, perpetual, royalty-free license to all of Nortel’s patents” and that this agreement was binding, regardless of who owned the IP. Under those circumstances, it’s difficult to understand why Redmond would stump up a lot of money to buy-in to the consortium – other than to use as weaponry in a potential smack-down with Google . The potential revenue stream to be derived from cross-licensing agreements for effectively doing very little in the R&D department is no doubt a further source of appeal to the members of the consortium.

According to Ericsson, the deal is expected to close in the third quarter of this year, providing it can gain the approval of both the Canadian and US courts. A joint hearing on that is expected to take place on July 11^th. The patents involved cover wireless, LTE, social networking and search technologies and optical networking, among others. Despite the massive cash injection from the sale, Nortel has said it’s unlikely that regular shareholders will see any return on it after its other bankruptcy commitments are met.

The list of companies interested in Nortel's patent portfolio keeps on growing

Fading giant Nortel has postponed the sale of its extensive patent portfolio, due to a “significant level of interest”.

The company had planned to flog the assets this coming Monday, June 20, but has delayed the auction process until June 27, as it assesses considerable interest in the 6,000 or so patents and applications.

Earlier this week, Microsoft joined HP, Motorola Mobility and Nokia in a growing line of tech companies opposed to Google’s proposed $900m bid for the patent assets. According to Redmond, a 2006 deal means that Microsoft has a “worldwide, perpetual, royalty-free licence to all of Nortel’s patents” and that this agreement is binding regardless of who buys the intellectual property.

Microsoft said that the current terms of sale jeopardise this arrangement. The software giant, in a submission to the Delaware bankruptcy court, said it is seeking a ruling requiring that licensing agreements currently in place “must remain enforceable against the purchasers of the transferred patents.”

Google’s bid was approved by the courts overseeing Nortel’s bankruptcy proceedings in Canada and the US early in May. Since then, Apple, Nokia, RIM, Microsoft and patent-service company RPX Corp have all been said to be interested in bidding.

Microsoft has joined the queue of tech firms opposed to Google's acquisition of Nortel's patent portfolio

Microsoft has joined HP, Motorola Mobility and Nokia in a growing line of tech companies opposed to Google’s proposed $900m purchase of Nortel’s patent assets. According to Redmond, a 2006 deal means that Microsoft has a “worldwide, perpetual, royalty-free licence to all of Nortel’s patents” and that this agreement is binding regardless of who buys the intellectual property.

Microsoft said that the current terms of sale jeopardise this arrangement. The software giant, in a submission to the Delaware bankruptcy court, said it is seeking a ruling requiring that licensing agreements currently in place “must remain enforceable against the purchasers of the transferred patents.”

Google’s bid was approved by the courts overseeing Nortel’s bankruptcy proceedings in Canada and the US early in May. Since then, Apple, Nokia, RIM, Microsoft and patent-service company RPX Corp have all been said to be interested in bidding for the more than 6000 patents and patent applications on offer. The auction, led by Google, is slated for June 20^th in New York.

Google’s bid isn’t the only one giving rise to concern. Earlier this month, the Wall Street Journal reported that the US Department of Justice’s (DoJ) antitrust division was concerned that Apple’s rumoured interest in the patents would give rise to a situation in which the patents would be used to stifle competition in the telecoms sector. Apple has a reputation for ring-fencing its interests and intellectual property holdings and, according to the WSJ, was in talks with the DoJ about these concerns. Blackberry manufacturer RIM, which had expressed interest in acquiring the patents, was prohibited from bidding for Nortel’s wireless business in 2009.

The patents in question include both granted and pending applications covering wireless, 4G/LTE, data networking, optical, voice, social networking and internet, among others. Nortel-owned technology is used in Blackberry, iPhone and Android devices.

Google’s recent moves into the mobile and desktop operating systems space has attracted a number of patent-related challenge from the likes of Oracle, which claims that Android infringes on patents it acquired when it bought Sun Microsystems. Whatever happens with the Nortel bid, Google stands to turn a profit: its bid comes with a $25m “break up fee” that will see it walk away with at least some cash should another bidder prove successful. In order to beat Google, the search company’s offer must be bettered by at least $29m and offers over and above that figure must come in $5m increments.

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.

Google has got the go-ahead for its $900bn bid for Nortel's patent assets

Google’s bid to buy $900m worth of Nortel patents and patent applications was approved on Monday. The planned sale required the approval of courts overseeing Nortel’s bankruptcy proceedings in Canada and the US. Under the terms of the auction, other parties may submit bids until June 13^th, with the auction taking place on June 20^th. Nortel filed for bankruptcy protection in 2009.

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. According to court papers filed in the US Bankruptcy Court, the search giant is also guaranteed the repayment of up to $4m in expenses should it lose out in the auction. Under the proposed bidding rules, Google’s offer must be bettered by at least $29m to be successful; offers over and above that figure must come in $5m increments.

Blackberry manufacturer RIM has also expressed interest in acquiring the patents; the firm was prohibited from bidding for Nortel’s wireless business in 2009.

The patents in question include both granted and pending applications covering wireless, 4G/LTE, data networking, optical, voice, social networking and internet, among others. Nortel-owned technology is used in Blackberry, iPhone and Android devices. 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. When news of the Nortel bid broke early in April, Google General Counsel Kent Walker said that the company hoped a successful bid would “create a disincentive for others to sue Google,” adding that “As things stand today, one of a company’s best defences against this kind of litigation is to (ironically) have a formidable patent portfolio.” Last year, Oracle filed a suit against Google, claiming that the Android operating system infringes on patents it acquired when it bought Sun Microsystems.

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Sales of IPv4 addresses are expected to become commonplace

Squeezing the last drops of value out of its remaining assets, fading giant Nortel this week won approval to sell its block of IPv4 addresses to Microsoft for an estimated $7.5m.

The numbers consist of 666,000 or so IPv4 addresses of a 1981 vintage and are pretty hard to come by these days. It’s not clear why Microsoft wants the numbers, but exchanges of this type are expected to be more commonplace since IPv4 is all but exhausted.

On February 1 of this year, the global internet address authority IANA (the Internet Assigned Numbers Authority) handed out two of the last blocks of freely available IPv4 addresses. The move triggered an automatic distribution of the remaining five blocks to each of the regional registries.

Now there is a scramble to adopt IPv6, which includes a modern numbering system that provides a much larger address pool than IPv4, as when devices come online en masse— the so called Internet of Things—only IPv6 will be able to provide a sufficient number of addresses.

Read the interview with Axel Pawlik, managing director of the RIPE NCC

With the depletion of unissued IPv4 addresses looming globally, internet registries including the American Registry for Internet Numbers (ARIN) have been forced to develop transfer policies designed to permit those with unneeded address space to transfer their right to use them to other organisations that can demonstrate the need for the resources.

In this case, Microsoft had to receive approval of the US Bankruptcy Court in Delaware to buy the Nortel numbers, which will be placed under a registration services agreement between ARIN and Microsoft.

There has been talk of a “black market” appearing as IPv4 addresses run into increasingly short supply, but Axel Pawlik, managing director of the RIPE NCC, is sceptical of such a deveopment. As long as those address transfers are registered according to agreed policies, then these transfers can’t become part of a black market.

“Imagine for a moment that that registration would not happen, then the transfer as far as we are concerned never happened, with all side effects that would have. It would become increasingly difficult to get such address space routed, by the upstreams. In the end, with increased uptake of certification, I believe such blocks would be rendered useless,” Pawlik said.

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Google has bid $900m for Nortel's patent portfolio

Nortel Networks is to continue its post-bankruptcy asset sell-off, announcing the sale of its remaining patent portfolio to Google. The search giant is said to have offered $900m in cash in a “stalking horse” arrangement that could yet see another bidder come in with a higher offer.

The patents in question are understood to include both granted and pending applications covering wireless, 4G/LTE, data networking, optical, voice, social networking and internet, among others.

As Google’s strategy sees it moving into the mobile and desktop operating systems space, it has attracted a number of patent-related legal challenges from the likes of Oracle. According to Google General Counsel Kent Walker, the company hopes that a successful bid will “create a disincentive for others to sue Google,” adding that: “As things stand today, one of a company’s best defences against this kind of litigation is to (ironically) have a formidable patent portfolio.” Last year, Oracle filed a lawsuit against Google, claiming that the Android operating system infringes on patents it acquired when it bought Sun Microsystems.

Writing on Google’s official blog, Walker took aim at organisations who file lawsuits but have “never actually created anything; others are motivated by a desire to block competing products or profit from the success of a rival’s new technology.” Walker added that: “The patent system should reward those who create the most useful innovations for society, not those who stake bogus claims or file dubious lawsuits.”

Android has attracted several legal challenges in recent years, although these are often directed at Google partners rather than the search company itself. Apple filed a complaint against HTC for alleged infringements in its Android-based phones, while Microsoft has also claimed that any company using Android owes patent-related royalties to Redmond.

Nortel filed for bankruptcy protection in 2009. In a statement made yesterday, the company said that its agreement with Google followed multiple rounds of bidding from “several interested companies” and was a starting point against which other interested parties could bid prior to an auction.

The seventh annual LTE World Summit takes place in Amsterdam on 17th – 18th May

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Ericsson will pay $65m for the MSS unit, which will nicely complement the GSM and CDMA assets picked up from Nortel last year

There are still titbits of the Nortel carcass to be had, with Ericsson this weekend striking a bargain to acquire the Canadian firm’s Multi-Service Switch business (MSS), boosting its presence in the CDMA market.

Ericsson will pay $65m for the MSS unit, which will nicely complement the GSM and CDMA assets picked up from Nortel last year.

An important part of the CDMA ecosystem, MSS offers the sale and support of data networks and switching platforms for core networks, providing valuable services for backbone network customers.

“Today’s announcement is further evidence of our commitment to our CDMA portfolio as we continue to strengthen our in-house R&D and services muscle to deliver on innovation, collaboration and support.” said Rima Qureshi, senior vice president and head of business unit CDMA Mobile Systems and recent entry into telecoms.com’s list of the most influential women in mobile.

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Ericsson wins Nortel's GSM business

The carcass of fallen Canadian giant Nortel continues to be picked over, with Swedish vendor Ericsson announcing that it has acquired the certain assets of the Carrier Networks division of Nortel relating to the GSM business in the US and Canada.

Ericsson will pay $70m for the assets, which were won through an auction. Ericsson’s bid for Nortel’s GSM assets was made together with Austrian carrier and enterprise services firm Kapsch CarrierCom, with Ericsson acquiring Nortel’s GSM business in North America while Kapsch is paying $33m to acquire most of the remaining assets, including the GSM-R business, outside North America.

Under the deal, Ericsson will acquire Nortel’s GSM business with North American operators such as AT&T and T-Mobile and will offer employment to approximately 350 employees from Nortel.

“Along with our recent acquisition of Nortel’s CDMA and LTE assets, the transaction emphasizes Ericsson’s commitment to the North American market and strengthens our position as a leading provider of telecommunications technology and services in the United States and Canada,” said Hans Vestberg, incoming president and CEO of Ericsson.

In September, Ericsson won out with a $1.13bn bid for all of Nortel’s CDMA business and LTE Access assets.