American and Canadian Judges Approve Final Nortel Patent Auction

by Jeff Wiener on July 12, 2011

Judges in Canada and the United States have approved the final auction of patents from Nortel, giving official approval to the consortium that includes Apple, RIM and Microsoft to snap up roughly 6,000 patents for $4.5 billion.

The patents came from a four day auction in June.

The auction initially started with what was known as a “stalking horse” bid from Google worth $900 million. The price soared after 19 rounds of bidding, with the consortium paying far more than analysts predicted for the wireless patents.

Analysts expect the winning consortium to use the wireless patents in litigation, with Google and its Android products expected to be first on the list. Because the range of patents is so massive, the winning group is in a significant position for success. The sale included data networking, wireless, Internet, semiconductor, optical, and voice technologies that should come in more than handy.

Some corporations, like Verizon Communications, objected to the sale over fears that patents included in the auction would negate existing licensing agreements. Once assured this was not the case, most of the objecting companies backed off.

Now that the sale has been officially approved, the cash will go to the Nortel estate to pay off remaining creditors. It should all be officially wrapped up in about a month, said Lisa Schweitzer of Cleary Gottlieb Steen & Hamilton LLP.

There may be one more hurdle for the consortium to surpass, however. The American Antitrust Institute has asked the United States Justice Department to undertake an “in-depth investigation” into the patent portfolio purchase. The consortium, called Rockstar Bidco LP, did get antitrust clearance on June 23.

Nortel, for its part, has raised some $8 billion total from all of its asset sales. The final patent auction snagged a price worth more than all other patent auctions combined.

It should be noted that the market responded with Nortel’s bonds nudging above par after the auction, presumably rebounding under the assumption that the cash from the sale could have many bonds paid off in full.

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Will Nortel Bring down Android? —
November 5, 2013 at 5:45 am

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AMerica February 11, 2012 at 3:27 pm

Judith we are fond of you thanks to california judges and 1 md judge. MAthis

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