Mobile Trolls Pick Nortel’s Bones for Patent Scraps

by Matt Klassen on December 14, 2010

After more than a year since it officially filed for bankruptcy, the once mighty telecom company Nortel Networks may have one last opportunity to influence the worldwide telecom market. Although most of the company’s primary assets have long been sold off, the final scraps of the former Canadian telecom giant may nevertheless be the most lucrative, as bidding is coming to a close for Nortel’s substantial patent portfolio.

While patent portfolio auctions are generally rare, when they do happen they rarely make the news, as professional patent trolls quietly make off with the valuable intellectual property, only to make money off those patents later down the road through legal action against potential patent violators.

But the selloff of the last of Nortel’s once powerful empire is certainly garnering a great deal of attention, as analysts are speculating that in the current world of ongoing patent litigation wars Nortel’s intellectual property may tip the scales in the fight for mobile dominance; and it is this news that has the biggest mobile predators circling Nortel’s corpse. 

There is no doubt that for some that this process of picking at the bones of the once powerful Nortel Networks is a painful one—like the carcass of a once mighty lion being stripped clean by scavengers and carrion birds—but as it is in the animal kingdom, the circle of mobile life continues with the existing predators and scavengers taking what they can from Nortel’s portfolio. 

It turns out, however, that in this era of every mobile company suing every other mobile company in an effort to retain some control over their individual intellectual properties, Nortel’s patent portfolio may have some much desired pieces, enough at least to draw the likes of Google, Apple, Motorola and Research in Motion to the auction house. 

Although the auction itself began almost seven months ago, the bidding process is quickly coming to a close for Nortel’s 4,000 or so patents, worth around $1 billion. Sources close to the super-secret auction have stated that Nortel has broken the 4,000 patents up into a handful of ‘lots,” essentially groups of patents that cover a wide range of current technologies. 

Nortel’s intellectual property itself covers a wide spectrum of today’s most hotly contested technologies, with patents covering wireless handsets, wireless infrastructure, optical and data networking, Internet, online advertising, voice communication technology, and personal computer patents. 

The most lucrative scraps, however, relate to the current third generation (3G) and burgeoning fourth generation (4G) wireless technologies, with these particular patents drawing significant attention from mobile competitors Apple and Google. 

So will Nortel continue to live on through its patents appearing in future technology? Don’t count on it, as the only way Nortel will ever make the news again will be as a minor part of some future patent litigation battle that no one wants to hear about. 

The fact is, if Apple or Google do get their hands on Nortel’s patents, it’s unlikely that Nortel’s much sought intellectual property will ever be integrated into future technologies or even create any new revenue streams for either company. 

Instead, if Apple and Google acquire these patents they will likely hand them over to their busy legal teams as defence against patent infringement, as fuel for future patent litigation, and as a way of keeping any potential mobile newcomers out of the market. So as the circle of life continues to turn, as yet another company gets picked clean, let this be our final goodbye to the once powerful Nortel Networks.

Photo c/o Telecom-cloud

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