Apple and Microsoft group buys Nortel patents

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Apple logo seen on a window outside of the New York flagship Apple store
Image caption,
The auction drew interest from major tech companies such as Apple, Google, Microsoft and Intel

Bankrupt telecoms firm Nortel has sold its remaining patent portfolio for $4.5bn (£2.8bn) to a consortium of six firms including Apple and Microsoft.

The other consortium members are Sony, Research In Motion, Ericsson, and EMC.

The auction of Nortel's assets had been hotly contested, with Google and Intel losing out.

The sale included more than 6,000 patents and patent applications including areas such as data networking and semiconductors.

"The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world," said George Riedel, chief strategy officer at Nortel.

Google had opened the bidding in April at $900m.

Patent wars

Canada's Nortel filed for bankruptcy protection in January 2009 and has been selling assets since then, raising about $3.2bn in the process.

Earlier on Thursday, Nortel had obtained a court order to extend its bankruptcy protection to 14 December "to provide stability to the Nortel companies to continue with their divestiture and other restructuring efforts".

The patents mark the last major assets to be sold by the company.

Patents are becoming highly prized pieces of intellectual property.

The final sale price was much higher than earlier estimates of $1bn to $2bn and illustrates how fierce the patent wars have become as companies become embroiled in lawsuits.

"The Nortel patent portfolio reflects the heritage of more than 100 years of its R&D activities and includes some essential patents in telecommunications and other industries," said Kasim Alfalahi, chief intellectual property officer at Ericsson, part of the winning group.

"We believe the consortium is in the best position to utilise the patents in a manner that will be favourable to the industry [in the] long term."

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