Nortel Patents sold for $4.5 Billion

The final big asset auction from one time telecom giant Nortel, is now on the books.

Nortel announced today that it has sold off more than 6,000 patents for $4.5 billion. The winning bid comes from a consortium of vendors including Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony.

The patents include Nortel's wireless and wired networking and voice patents. According to Nortel," the extensive patent portfolio touches nearly every aspect of telecommunications and additional markets as well, including Internet search and social networking."

The final auction price of $4.5 billion is a dramatic increase from the $900 million that Google first offered for the patents back in April. Nortel declared bankruptcy in January of 2009 and has been selling off assets ever since.

Google's bid was what is known as a 'stalking horse' bid, where Google set the floor price. In the stalking horse auction others were able to come in and offer more, while Google did have the opportunity to increase its bid as well.

"Following a very robust auction, we are pleased at the outcome of the auction of this extensive patent portfolio", said George Riedel, Chief Strategy Officer and President of Business Units, Nortel in a statement. "The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world."

The patent sale is also the largest asset sale that Nortel has conducted since declaring bankruptcy.

Avaya acquired Nortel's Enteprise business for $900 million, after starting the bidding at $475 million. Nortel's Metro Ethernet Business was sold to Ciena in March of 2010 for $774 million. Nortel's Carrier VoIP business was sold to Genband in June of 2010 for $282 million.

On the wireless side, Nortel sold off its wireless CDMA and LTE assets to Ericsson in a deal worth $1.13 billion. Ericsson is now part of the vendor consortium that is buying the $4.5 billion patent pool as well.

The patent sale is expected to be finalized in the third quarter of 2011.

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.


Google, patents, Nortel