Google, Apple eye Nortel patents in bankruptcy auction

Intellectual property sale includes potentially valuable wireless patents

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Former telecom giant Nortel Networks may be in bankruptcy, but the company has some intellectual patents that key technology players such as Apple and Google may engage in fierce bidding over.

According to a Reuters report, Nortel is auctioning off assets that include some potentially valuable patents such as its Long Term Evolution (LTE) fourth-generation wireless technology.

(Also see: Patent wars: Intellectual Ventures suing 9 tech firms)

The deadline for final bids is closing in, and both personal technology market leader Apple and online search giant Google are expected to compete for ownership of some of Nortel's wireless intellectual property, estimated to collectively be worth up to $1 billion.

From Reuters:

"There has been one round of bidding on those patents, this has been completed," said one source, who declined to be identified because the process is private. "And what Nortel has done is divide the patents up into different lots covering different kinds of technologies."

Nortel, which filed for bankruptcy protection in January 2009, holds more than 4,000 patents that analysts say are worth more than $1 billion in total. Two sources with knowledge of the auction process say they have been grouped into six "buckets" of related technologies and that final bids are due within weeks.

Another Canadian company, BlackBerry maker Research in Motion Ltd., reportedly is interested in some of Nortel's 4,000 patents, along with U.S.-based smartphone manufacturer Motorola.

This wasn't mentioned in the Reuters article, but I wonder if patent-infringement lawsuit specialist Intellectual Ventures wants in on this action. (See link above.)

Apple has been in a protracted legal battle with Finnish cell phone giant Nokia, with each company filing lawsuits alleging violation of patents. Winning some of Nortel's wireless patents could strengthen Apple's hand in the wireless wars.

"It is certainly a very significant stockpile of potent weaponry, and whoever lays their hands on it is going to gain significant advantage," Reuters quotes Alexander Poltorak, chief executive of General Patent Corp.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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