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Nortel Patent Sale - Why Isn't It Getting FTC/DOJ Scrutiny?
Wednesday, July 06 2011 @ 09:00 AM EDT

Last year the big news was that Attachmate was buying Novell, but that Novell's patent portfolio was being sold separately to a little known buyer named CPTN Holdings LLC. It was known that Microsoft was one of the companies behind CPTN, but then it came out that CPTN was not just a single company, it was a consortium, and more importantly, it was a consortium of competitors. Included in the CPTN fold were Microsoft, Apple, EMC and Oracle. Their common enemy? Google.

But Google was not the only entity concerned about this alliance of the largest companies in the information technology sector, almost all of which compete with each other on some level. The Free Software Foundation and Open Source Initiative filed complaints with competition authorities in the U.S. and Germany. In the end German and U.S. competition authorities extracted changes in the transfer, ownership, and licensing of the Novell patents to assure a level playing field that allowed room for free and open source software.

Now we have the Nortel patents being sold out of the bankruptcy estate. And who are the buyers? Apple, EMC, Ericsson, Microsoft, Research In Motion, and Sony. And their common enemy? Google.

So why is the Nortel deal different? Why aren't competition authorities looking at its structure in the same way they scrutinized the Novell deal? This group allegedly got pre-clearance for the purchase from the FTC. How could that be in light of the concerns over the earlier Novell portfolio? Google got pre-clearance from the FTC and DOJ to buy the Nortel portfolio. Supposedly, Apple did, as well, but individually, not as part of a consortium with its direct competitors. Of course, the real irony is Microsoft expressing concern over a possible Google winning bid.

This deal has got to attract more scrutiny than this.

The question is, will anyone stand up with Google to question it?

FOSS community and consumers, time to speak up.


Nortel Patent Sale - Why Isn't It Getting FTC/DOJ Scrutiny? | 101 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Nortel Patent Sale - Why Isn't It Getting FTC/DOJ Scrutiny?
Authored by: Anonymous on Wednesday, July 06 2011 @ 09:02 AM EDT
There common enemy? --> Their common enemy?

[ Reply to This | # ]

Corrections here
Authored by: jesse on Wednesday, July 06 2011 @ 09:03 AM EDT
If any.

[ Reply to This | # ]

Off Topic comments here
Authored by: feldegast on Wednesday, July 06 2011 @ 09:16 AM EDT
Please make links clickable

My posts are ©2004-2011 and released under the Creative Commons License
Attribution-Noncommercial 2.0
P.J. has permission for commercial use.

[ Reply to This | # ]

News Picks Here
Authored by: feldegast on Wednesday, July 06 2011 @ 09:19 AM EDT
For news on FOSS and other issues, please make links clickable

My posts are ©2004-2011 and released under the Creative Commons License
Attribution-Noncommercial 2.0
P.J. has permission for commercial use.

[ Reply to This | # ]

cynically ...
Authored by: nsomos on Wednesday, July 06 2011 @ 09:30 AM EDT
In the case of Novell, they were NOT going bankrupt.
The Novell sale did NOT involve bankruptcy court.

But the Nortel sale is from a bankruptcy, and we have
seen with SCOG that bankruptcy courts seem to be above
just about everything, and seemingly immune from any
effective oversight.

If you are looking for a reason why the Nortel patent
sale is being treated differently than the Novell patent
sale was, look no further than the bankruptcy court.

[ Reply to This | # ]

Nortel Patent Sale - Why Isn't It Getting FTC/DOJ Scrutiny?
Authored by: Anonymous on Wednesday, July 06 2011 @ 09:52 AM EDT
Nortel has been a sad story from the get go.
People who lost all their retirement funds etc , it has been a mess.A lot of
people lost BIG money in this.IT was one of the best rated investment one could
make .. now laying in ruins.But back to our topic.In the patent portfolio of
Nortel you have a lot of very important technology.Important for the telecom and
for everyone using a computer.To see MS and Associates trying to get to them ,
and in fact , anyone trying to put a hand of that treasure chest is not
surprising one bit.To be sold , fine.To be used , hmm .. how ? And used to what
purpose ? The big question in my mind is this : Once sold can the patents be
revoked for being misused or used anti-competitively ?
Say MS and Associates get them, can the court simply take the patents out of
their hands for trying to stifle the competition ? or simply eliminate it ?
In other words , if the sale goes on : can the patents be simply revoked if
they are misused ?

[ Reply to This | # ]

Nortel Patent Sale - Why Isn't It Getting FTC/DOJ Scrutiny?
Authored by: Anonymous on Wednesday, July 06 2011 @ 12:35 PM EDT
Perhaps, because Nortel was a Canadian company, it's getting Canadian review.

[ Reply to This | # ]

Bankruptcy judge
Authored by: gstovall on Wednesday, July 06 2011 @ 04:17 PM EDT
Isn't the Nortel bankruptcy judge the same one as for TSCOG?

[ Reply to This | # ]

Nortel Patent Sale - May get Industry Canada review
Authored by: Anonymous on Wednesday, July 06 2011 @ 05:17 PM EDT
See CBC Coverage

[ Reply to This | # ]

Authored by: Anonymous on Wednesday, July 06 2011 @ 06:34 PM EDT
Apple, Microsoft, Sony... that's a whole lotta lobbyist $$$ spent on keeping the
politicos looking the other way.

[ Reply to This | # ]

Nortel Patent Sale - winning consortium members have different aims
Authored by: Anonymous on Wednesday, July 06 2011 @ 09:22 PM EDT

If you look at some of the reports about the patent auction, it seems clear that there likely wasn't any one specific reason for different members of the winning consortium to participate. The Reuters account describes how the bidding progressed through four days:

Dealtalk: Google bid "pi" for Nortel patents and lost

According to this account, Apple started out the bidding as an individual bidder, one of five original bidding entities.

Five parties, including two consortiums, initially started bidding for the bankrupt Canadian telecoms company's patents -- Apple, Intel, Google, a consortium of Ericsson, RIM, Microsoft, Sony and EMC, and a group led by patent risk solutions provider RPX, the sources said.

At different points, the RPX consortium, the EMC consortium, and Intel dropped out of the bidding, but some joined together to form new teams to continue. Finally it came down to just two groups left, a Google-Intel team and an Apple-Ericsson-RIM-Microsoft-Sony-EMC team. The Google-Intel team reportedly dropped out after the price topped $4 billion.

Besides hearing a little more about how the final winning bidders came together, there's one report from Robert Cringely's blog that claims to know something about how the consortium divided up the results of the auction.

The enemy of my enemy

Here’s the consortium participation as I understand it. RIM and Ericsson together put up $1.1 billion with Ericsson getting a fully paid-up license to the portfolio while RIM, as a Canadian company like Nortel, gets a paid-up license plus possibly some carry forward operating losses from Nortel, which has plenty of such losses to spare. For RIM the deal might actually have a net zero cost after tax savings, which the Canadian business press hasn’t yet figured out.

Microsoft and Sony put up another $1 billion. There is a reportedly a side deal for about $400 million with EMC that has the storage company walking with sole ownership of an unspecified subset of the Nortel patents.

Finally Apple put up $2 billion for outright ownership of Nortel’s Long Term Evolution (4G) patents as well as another package of patents supposedly intended to hobble Android.

Each player seems to have had different motivations for getting a piece of the patent action. RIM, Ericsson, and Sony, as phone and mobile device manufacturers, seem to have been mainly interested in securing licensing rights to everything in Nortel's portfolio. For Ericsson and Sony at least, that license would appear to cover products using Android so they wouldn't really be considered enemies of Google. EMC seems to have had its eye on a particular subset of the patents that it thought were important to its storage business. For some perspective on how EMC competes with Google, there's a blog entry by Bob Enderle that talks about this some.

EMC vs. Google: There Should be No Competition

EMC and Google are effectively at war over a concept. That concept is whether cloud computing, particularly as it relates to storage, should be public or private.
EMC has as a core goal protecting customer’s data; it is what its business is about. Google has as a core goal indexing and making all information available to everyone.

Keeping in mind Enderle's previous track record when prognosticating about the future success of companies such as Apple, his views on who is going to come out on top of this contest probably have to be taken with a big lump of salt.

Apple's interest in LTE 4G technology patents makes a lot of sense. They haven't introduced a 4G iPhone yet, but both Verizon and AT&T are committed to building out their 4G networks right now and Apple will have to go along fairly quickly. Owning important 4G patents would give it some leverage against other 4G patent holders levying an excessive royalty on Apple LTE phones in the future. Those patents would not have much impact on Google, since Google for the most part does not manufacture its own phones. The other patents mentioned by Cringely would appear applicable to Google, but it's not clear whether the purpose is intended to be more offensive or defensive. Apple is already involved in numerous patent suits involving rival phone vendors using Android, so the extra patents may just be a means to stock up on more patent ammunition.

That leaves Microsoft as the remaining winning bidder to consider. Given the recent reports on how much Microsoft already collects in royalties from some Android device manufacturers, it makes sense that Microsoft may be making an investment here to hedge its bet on Windows Phone 7/? ever being a success in the market. They may realize that it's more cost effective to simply get everyone else to pay patent royalties for their platforms than to try and produce a viable competing platform.


[ Reply to This | # ]

"time to speak up"
Authored by: Superbowl H5N1 on Friday, July 08 2011 @ 03:07 AM EDT
"time to speak up"

ok. Where and how?

Here's where you can get the computer RMS uses:

[ Reply to This | # ]

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