Bidders Ready for Nortel Patent Battle

Apple, Intel and Ericsson will be vying with Google and others to buy patents from bankrupt telecom-maker Nortel later this month, increasing the number of bidders and raising the stakes for its valuable patent portfolio.

Apple’s entry isn’t too surprising, and for Intel, the move indicates another step in its strategic shift to mobile smartphone chips.

Just last week, Google proposed a $900 million starting bid for all of Nortel’s patents, after receiving antitrust clearance from the U.S. Department of Justice. Google could use Nortel’s patents to protect from lawsuits related to its Android software.

Citing a “significant level of interest” in their patent portfolio, Nortel delayed the auction for the patents by a week, setting June 27 as the date, and allowing other bidders to talk with the DoJ in order to join the heavy-hitters at the table.

Nortel commands some 6,000 patents, covering a wide range of wireless technologies including Wi-Fi, social networking and Internet search technology. The DoJ, concerned the winning bidder could potentially misuse the patents to cripple rivals, scrutinized the bidders.

The DoJ also accepted RPX, a San Francisco-based patent risk solutions provider, as a qualified bidder. Fellow Canadian company Research in Motion may also enter the fray is building, as its chief executive Mike Lazaridis called the suite of patents a “national treasure trove.”

RIM and other interested parties may not have the financial guns to last long in this auction, though, where bids could quickly exceed $1 billion.

None of the companies made public comment on the private auction.

After posting a loss of $5.8 billion in January of 2009, Nortel filed for bankruptcy. Since then, the company has raised about $3 billion to pay creditors by selling businesses, and the patents are the last of the major assets to be sold.

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