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article imageApple, RIM among buyers of Nortel patent portfolio

By Justin Crann     Jul 1, 2011 in Business
Toronto - Smartphone makers Apple and Research In Motion were among the buyers of bankrupt Canadian telecom company Nortel's US$4.5 billion patent portfolio.
The patent auction began on Monday with an opening bid of $900 million from Google, the company behind the industry-leading Android smartphone, the CBC reported. That bid was well below the initial valuation of the portfolio at $1.5 billion.
But a consortium of investors including Apple, RIM, Microsoft, Sony, Ericsson and EMC has now bought the rich portfolio of over 6,000 patents and patent applications at three times that price.
The $4.5 billion deal is seen as a major move in the smartphone industry. As reported in the New York Times, George Riedel, Nortel's chief strategy officer, said, "‘The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world."
The interest in the patents is driven by an increasingly competitive industry in which patent infringement suits between tech giants are becoming commonplace and patents, as a result, are becoming more important than ever.
This is why RIM reportedly contributed over $700 million to the buyout, and Ericsson contributed $340 million.
But relative newcomer Google is lagging behind its competitors, according to analyst Florian Mueller. Mueller told Computerworld:
Google lost an unprecedented opportunity to acquire a major bargaining chip that would strengthen it at the mobile industry's intellectual property negotiating table... I'm afraid it won't get a similar opportunity in quantitative and qualitative terms anytime soon.
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