Google ‘Disappointed’ at Losing Bid for Nortel Technology
By John Ribeiro
Google expressed disappointment at losing the bid for Nortel’s fire sale of technology patents, characterizing the purchase by a consortium of its rivals “disappointing” for the cause of open innovation.
Nortel says the consortium consisting of Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony had emerged as the winning bidder in the multiday auction. It did not give information on the other bidders.
“This outcome is disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition,” said Kent Walker, Google’s senior vice president and general counsel in an e-mailed statement. “We will keep working to reduce the current flood of patent litigation that hurts both innovators and consumers.”
In a blog post in April, Walker said Google was bidding for the Nortel patents as it hoped the portfolio would create a disincentive for others to sue Google, and also help the company, its partners and the open source community, which is integrally involved in projects like Android and Chrome, continue to innovate. Having a formidable patent portfolio is one of a company’s best defenses against an explosion in patent litigation that threatens to stifle innovation, he added.
“We believe the consortium is in the best position to utilize the patents in a manner that will be favorable to the industry long term”, Ericsson said. The company said it would contribute $340 million to the transaction which is expected to close in the third quarter. RIM said its portion of the purchase consideration was about $770 million.
The sale includes more than 6000 patents and patent applications spanning wireless, wireless 4G, data networking, optical, voice, Internet, service provider, semiconductors and other patents, Nortel said.
The sale is subject to applicable Canadian and U.S. court approvals which will be sought at a joint hearing expected to be held on July 11, it added.
Nortel Networks said in April that it entered in into a “stalking horse” asset sale agreement with Google for the sale of all of its remaining patents and patent applications for a cash purchase price of $900 million. The Google bid effectively set the minimum asking price in an auction for the assets.
In May, Nortel said that it obtained approval from the U.S. Bankruptcy Court for the District of Delaware and from the Ontario Superior Court of Justice to accept the bid from Google.
Nortel filed for protection under U.S. Chapter 11 bankruptcy proceedings in January 2009, and has been selling off its assets ever since. Ericsson paid just over $1 billion for the company’s CDMA (Code Division Multiple Access) wireless division, while Avaya paid just under $1 billion for its enterprise networking business.
John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John’s e-mail address is firstname.lastname@example.org
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