Friday, July 1, 2011

Nortel Sells Patents to Consortium for $4.5B

A consortium that includes leading smartphone makers Apple and Research In Motion is paying $4.5 billion in cash for about 6,000 patents and patent applications belonging to bankrupt telecom-equipment maker Nortel Networks Corp.

The group prevailed in an auction this week over Google Inc., which had said it planned to bid $900 million in cash for all of Nortel's remaining patents and patent applications. Phones running Google's Android system compete with Apple's iPhone and RIM's BlackBerry devices.

Nortel's patents cover many technologies, including data networking, semiconductors and next-generation wireless systems known as fourth generation, or 4G. Nortel said the portfolio "touches nearly every aspect of telecommunications and additional markets ... including Internet search and social networking."

A former tech highflier in the 1990s, Nortel at its zenith had more than 95,000 employees and a market capitalization of nearly $300 billion. At one point in 2000, Nortel accounted for a third of the market value of the Toronto Stock Exchange. But it grew too quickly and overpaid for acquisitions. Nortel also ran into problems, including an investigation into its accounting practices, which led to shareholder lawsuits.



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