DOJ Scrutinizes Guest List in Nortel Patent Selloff

by Matt Klassen on June 6, 2011

It was late 2010 when I first wrote about the selloff of Nortel’s patent portfolio, the last vestiges of the once powerful Canadian telecommunications empire. At the time the patent auction was garnering a great deal of attention for its potential to shift the balance of power in the mobile market, as Nortel’s intellectual property was attractive enough to draw in even the biggest players in the mobile market.

Although the highly secretive auction began several months ago, amidst the ongoing scrutiny of landmark deals between AT&T and T-Mobile and NBC and Comcast, if there’s one thing on everyone’s mind these days, its thoughts of antitrust and anti-competition. In fact, the Wall Street Journal has reported that the Justice Department is taking a keen interest in the potential bidders in this auction, as it upholds its mandate to maintain market balance.

With that said, it looks like the bidding process for the last remnants of Nortel may now be an invite-only event, and you’ll never guess who’s not invited.

After almost two years since Nortel first filed for bankruptcy mobile predators and scavengers alike are still picking its bones clean. The auction process itself covers between 4,000 and 6,000 patents that have been broken up into different “lots,” with each lot containing a variety of different patents and intellectual property.

With the highly secretive nature of the auction, its difficult to ascertain the specific content of each lot, but it is known that Nortel’s patent horde contains intellectual property covering key areas of the modern telecommunications market, including wireless video communication, Wi-Fi, Internet search technology, social networking, and its own next generation LTE mobile data technology.

It should come as no surprise that with so much at stake, that the likes of Google and Apple have arrived at the party, but it looks like neither may not have an invitation. According to the Journal, Google has placed a $900 million dollar bid—although its unclear if this bid is for all the patents—and the move has now garnered attention from the Justice Department over fears that should Google, Apple, or any other major technology player acquire the technology, it could jeopardize market balance and stifle competition.

So just how lucrative is Nortel’s cache of patents? As Alexander Poltorak, chief executive officer of General Patent Corp, notes,with Nortel’s intellectual property “you’re acquiring a stockpile of nuclear weapons as far as patents go.” The reality is, while Nortel fell by the wayside more than two years ago, its intellectual property was ahead of its time; still much sought after bounty in the cutthroat mobile market.

For the likes of Google, Apple and the rest of the tech industry, the stakes are high, as each company wants to prevent their closest competition from winning, all the while wary that a new dark horse bidder could beat them all out and immediately become a new threat. It’s through this quagmire that the Justice Department will have to make its decisions, the foremost of which being who should be allowed to bid in the first place.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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Nortel’s High Stakes Auction Heats Up —
August 16, 2012 at 6:16 am

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