Battle for Nortel's patents continues, with RIM still in the frame
Published: 30 July, 2009
READ MORE: M&A | Nortel Networks | Research In Motion | LTE
If you thought last Friday's auction was the end of the tussling for Nortel's LTE and CDMA assets, you'd be sadly mistaken. The bulk of the Canadian firm's valuable patent portfolio remains on the table, and RIM still has its eye on them, looking to future businesses in LTE devices and IPR licensing - even as it holds out hopes of derailing Ericsson's $1.13bn purchase of the equipment ranges.
While US and Canadian bankruptcy courts approved the transaction on Tuesday, there is still a chance of intervention from the Canadian government, mainly at the instigation of RIM, which claims it was excluded from bidding. As well as RIM's objections, there are also possible hurdles for Ericsson to leap in relation to the Nortel pension scheme. The Nortel Retirees Protection Committee called on the Canadian government to intervene, fearing $500m earmarked for pensions may be at risk.
RIM was not deterred by the smoothness of the bankruptcy court approval process, conducted by judges in Delaware and Ontario, connected by video link. The US panel leader said: "It's rare for a bankruptcy judge to allow himself to be enthusiastic, but I'm enthusiastic about this process." But RIM commented: "The bankruptcy courts in the US and Canada have no mandate or authority for considering Canada's national interest."
It said in a statement: "Now that the auction is completed, the government has the authority and responsibility to get involved to protect vital Canadian interests. RIM appreciates the stated willingness of the Minister of Industry to review the situation following the results of the auction. RIM stands ready to engage." Nortel says RIM disqualified itself from submitting its $1.1bn bid by refusing to sign a standard non-disclosure agreement.
RIM has reportedly been in talks with Nortel for several months over many of its LTE and other patents, one of the jewels in the networking firm's crown. It has amassed valuable IPR in many areas, particularly MIMO and OFDMA technologies as applied to LTE, and submitted many innovations in the early years of the 3GPP's LTE process. However, much of this is not included in the Ericsson deal, since Nortel has held back these key assets, presumably to gain a better price or even to retain them as the basis of a rump company, using the Canadian firm's own brand and focused on licensing.
Nortel attorneys themselves seemed confused over which patents Ericsson was acquiring - one said 125 of the total portfolio of 5,500, another said 600. The Swedish firm will also license other Nortel IPR.
RIM could see the patents as giving it a headstart over larger rivals in creating LTE BlackBerry devices and services going forward, and may also welcome the boost to its licensing arsenal, both for future revenues and also as a defensive tactic. The company
has always engaged in significant patent licensing (and litigation) activity in its core mobile email markets and could aim to increase its value and its ability to 'trade' IPR with rivals.
More M&A News
More NORTEL NETWORKS News
More RESEARCH IN MOTION News
COMMENTS
Carrier Broadband Performance: Africa & Middle East
Carriers are using mobile broadband as their weapon of choice in the fight against the commoditization of voice and falling ARPU. This...
Voice over LTE: Market Analysis and Forecasts
VoLTE offer unique advantages in lowering a carrier's voice infrastructure economics and promises to improve voice quality, device...
Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?
Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...
