NEW YORK (AP) - A consortium that includes leading smartphone makers Apple and Research In Motion prevailed over Google this week with a $4.5 billion cash bid for about 6,000 patents and patent applications from bankrupt telecom-equipment maker Nortel Networks Corp.
Nortel’s patents cover many technologies, including data networking, semiconductors and 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.”
David Berten, a partner at Global IP Law Group, which advised Nortel on the sale, said the patents resulted from about $40 billion in investments over 15 years, through Nortel’s own research and development and through acquisitions. He said the patents cover every aspect of telecommunications, including the handsets, the equipment used in cell towers and the connections from there to wired networks.
“Anytime you’re plugged into data networks, there are patents that pop up,” he said.
The sale comes as manufacturers of phones are suing one another over such common features as swiping gestures on touch screens. Such lawsuits help distract competitors and, through substantial royalty settlements, could allow patent holders to capitalize on their rivals’ success in the market. Apple has sued Taiwan’s HTC Corp., which makes Android phones. Microsoft has sued Motorola Mobility Inc. over Android phones, too.
Patent experts described the sales price as unprecedented, akin to what companies pay to buy complete businesses, not just the intellectual properties.
“What you are looking at is a list of the companies that are in this incredibly active battle for the mobile computing platform,” said Ron Epstein, CEO of Epicenter IP Group, a patent broker not involved in the Nortel auction. “Clearly patents are being deployed as an important strategy asset in winning that battle.”
Having a patent could allow one smartphone to have distinguishing features over another, or it could raise the cost for a rival to make the product if it has to pay licensing fees, Epstein said.
In a statement Friday, Google General Counsel Kent Walker called the outcome “disappointing for anyone who believes that open innovation benefits users and promotes creativity and competition. We will keep working to reduce the current flood of patent litigation that hurts both innovators and consumers.”
Google had said it wanted the patents to defend itself against lawsuits from other companies until Congress enacts broader changes to the patent system to help reduce such litigation. Google gives away its Android software for free, counting on its wider use to drive usage of other Google services, such as search and maps.
The winning consortium consists of:
_ Apple Inc. of Cupertino, Calif., maker of the iPhone, iPad and other popular devices;
_ Microsoft Corp. of Redmond, Wash., which is pushing phones running on its Windows operating system and operates the search engine Bing;View Entire Story
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