1. anon1727506's Avatar
    Nortel Patent Auction Could be Biggest Ever

    With Cleary Presiding, Nortel Patent Auction Could be Biggest Ever

    by Julie Triedman

    Two and a half years after Nortel Networks Corporation filed for bankruptcy protection, the estate of the insolvent Canadian telecom is scheduled on Monday to sell off its last valuable asset: a portfolio of nearly 6,000 patents that could be key to the future of mobile computing.

    The patent trove--which covers technologies used in smartphones and tablet computers, as well as in cellular infrastructure, online search, and even social networking--is expected to bring in more than any of Nortel's previous asset sales and could set a record for the most money ever raised in a single public sale of intellectual property assets, lawyers familiar with the auction process say.

    In addition to Google, whose so-called stalking horse offer of $900 million represents the minimum bid, other high-tech companies expected to vie for the Nortel patents include Apple and Intel. All three companies have received approval from federal antitrust regulators to participate in the bidding, as has Rockstar Bidco LP, according to Bloomberg.

    Other potential suitors include Ericsson and defensive patent aggregator RPX. As of Friday, it was unclear whether another reported bidder, BlackBerry maker Research in Motion, will ultimately enter the fray.

    Interest in the portfolio, which Nortel says includes about 3,650 U.S. patents and 1,650 patents in other countries, has been so intense that the auction--originally scheduled for June 20--was pushed back a week.

    Those eyeing the Nortel patents have different reasons for doing so. In announcing its bid in April, for example, Google noted on a company blog that its interest is twofold. Winning the portfolio, the company said, "will not only create a disincentive for others to sue Google, but also help us...continue to innovate." Intel, meanwhile, views the patents as a potential "gold mine" for its own push into the wireless maket, according to Reuters.

    Previous Nortel patent sales have yielded a combined total of some $3 billion for the bankrupt company's estate, Nortel lawyers say. The two largest auctions both grossed double the minimum bids, and Reuters reports that some observers believe the final price for the patents going on the block Monday could reach $1.5 billion.

    Prior to seeking bankruptcy protection, Mississauga, Ontario-based Nortel had more than 140 affiliates operating in more than 150 countries--making its dismantling one of the largest coordinated multi-jurisdictional insolvency proceedings ever.

    Managing the auction for the Nortel estate is Cleary Gottlieb Steen & Hamilton bankruptcy partner Lisa Schweitzer, Nortel's lead U.S. restructuring counsel. Partners Paul Shim and Paul Marquardt are providing corporate advice and counsel Daniel Ilan is helping on IP matters. (All are in New York except Marquardt, who is in Washington, D.C.) Schweitzer had teamed up with colleague James Bromley on previous Nortel auctions. (We have reported on previous Nortel auctions here, here and here; a Bloomberg story describes a fourth here.)

    As of April 30, Cleary had billed $128 million in fees for its work on the Nortel matter, with a bankruptcy court filing showing some 300 lawyers from the firm racking up hours on the effort. Scores of additional lawyers at firms in Canada and the United Kingdom, where related bankruptcy proceedings are playing out, have also logged time on the case. (For more on the complex lawyering involved in the case, read this 2010 account from sibling publication Corporate Counsel.)

    Advising Google on the bidding process is Wachtell, Lipton, Rosen & Katz. Counsel Philip Mindlin is leading the firm's team on the matter, with help from corporate partners Adam Emmerich and Benjamin Roth, antitrust partner Ilene Gotts, and restructuring and finance partner Gregory Pessin. Mindlin has in the past represented key parties in distressed asset transactions involving such companies as Refco Group and Aleris International.

    No information on which firms are providing counsel for the other potential bidders was available as of Friday. Ericsson won a previous auction in July 2009 for Nortel's wireless assets. The company was represented at the time by partners Marilyn Sobel and Jeffrey Marell at Paul, Weiss, Rifkind, Wharton & Garrison. Neither responded to an email request for comment on the current auction.

    As with the previous sales, this one requires the approval of the U.S. and Canadian judges supervising the proceedings, as well as the U.K. administrator overseeing the bankruptcy in that country. Previous auctions with multiple bidders have taken as long as three days. The auction will be held in Cleary's Manhattan offices. A winner will be announced shortly after the close of bidding, with an approval hearing scheduled for July 11.
    In a couple of other stories on this subject, RIM is listed as one of the bidders but is not expected to be one of the frontrunners in the bidding. I expect they need to set some funds aside for a rainy day....
    06-24-11 01:49 PM
  2. rollingrock1988's Avatar
    I was just about to post a similar article. They need to buy those ******* patents. If their smart they will just for revenue to keep them chugging along.
    06-24-11 01:50 PM
  3. hootyhoo's Avatar
    Rim has 3 billion in cash. Google has 30 billion in cash. If it goes for 1.5 billion, it's just a blip out of Google's cash pile. There is no way that it would make sense for rim to spend half of their cash for this when they have more urgent needs.

    Posted from my CrackBerry at wapforums.crackberry.com
    06-24-11 02:08 PM
  4. rollingrock1988's Avatar
    Rim has 3 billion in cash. Google has 30 billion in cash. If it goes for 1.5 billion, it's just a blip out of Google's cash pile. There is no way that it would make sense for rim to spend half of their cash for this when they have more urgent needs.

    Posted from my CrackBerry at wapforums.crackberry.com
    But it also puts them at a disadvantage if they don't. I realize the numbers are stacked against them but doesn't the Canadian Government have the power to block this sale?
    06-24-11 02:14 PM
  5. Shlooky's Avatar
    Apple is bidding for those patents as well, not sure if RIM stands a chance against the two giants, Google and Apple.
    06-24-11 02:25 PM
  6. DenverRalphy's Avatar
    But it also puts them at a disadvantage if they don't. I realize the numbers are stacked against them but doesn't the Canadian Government have the power to block this sale?
    Nope. Especially considering a major bulk of them are U.S. Patents. It's not a company up for sale, it's their patents.
    06-24-11 02:26 PM
  7. LikeWebOS's Avatar
    I think Google is going win the bidding war on these patents, but not before everyone else runs up the price on them.
    06-24-11 02:41 PM
  8. DenverRalphy's Avatar
    I think Google is going win the bidding war on these patents, but not before everyone else runs up the price on them.
    If anybody's going to run the price up, it'll be Google. They dropped a pretty big hammer opening with a $900M bid. I predict that after everybody else starts bidding, Google will drop a bigger hammer that will throw everybody into an apoplectic fit. Google has a very small patent portfolio, and they're really getting tired of patent hounds nipping at their heels every step they take. They want this, and they're going to make it even more obvious. Their next bid will probably take out every bidder other than Apple.
    06-24-11 02:56 PM
  9. rollingrock1988's Avatar
    Nope. Especially considering a major bulk of them are U.S. Patents. It's not a company up for sale, it's their patents.
    Well shoot.
    06-24-11 03:25 PM
  10. mustangv8's Avatar
    They don't care about their shareholders or even have confidence in their own worth as a company.

    Imagine being able to spend shareholders money on overpaid execs who can't perform up to par with the market,jmo.

    If rimm thought they were worth more, how about some huge insider purchases of stock, a buyback of shares to be authorized, or even a small dividend?

    Keep an eye on large(uncommon) purchases of out of the money calls just in case. Imo, nothing goes private without a big gain from some insiders, hence perot systems as an example.

    Posted from my CrackBerry at wapforums.crackberry.com
    06-25-11 03:42 AM
  11. The_Engine's Avatar
    If RIM had just patented the BBM concept then they could be suing Apple now over iMessage.

    Posted from my CrackBerry at wapforums.crackberry.com
    06-25-11 07:35 AM
  12. KAPS's Avatar
    If RIM had just patented the BBM concept then they could be suing Apple now over iMessage.

    Posted from my CrackBerry at wapforums.crackberry.com
    Just the same way HP would be suing RIM for copying WebOS in Playbook.
    Some companies are smart, they know it is very difficult to prove your patent was copied so they don't sue the other company.
    06-25-11 08:59 AM
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