Apple Is Said to Bid in Auction for Nortel Networks Patents

June 18, 2011, 12:18 AM EDT By Olga Kharif, Adam Satariano and Hugo Miller

June 18 (Bloomberg) -- Apple Inc. has joined the bidders for a trove of patents from Nortel Networks Corp., the bankrupt maker of phone equipment, two people familiar with knowledge of the matter said.

Nortel, based in Mississauga, Ontario, said this week it has received “significant level of interest” in the technology portfolio and will delay the auction by a week until June 27 to accommodate demand. The people familiar with Apple’s plan didn’t want to be identified because the bidding isn’t public.

The move would put Apple in competition with Google Inc. for the 6,000 patents, which could be used in smartphone technology. Google, looking to bolster its Android software, offered $900 million in April in what Nortel said was a starting point for an auction. RPX Corp., a San Francisco-based patent- buying firm, is considering a bid, an attorney for the company said last month.

Steve Dowling, a spokesman for Cupertino, California-based Apple, declined to comment.

Nortel filed for bankruptcy in January 2009 after a loss of $5.8 billion, hurt by customers putting off spending on new equipment during the recession. Since then, Nortel has raised about $3 billion to pay creditors by selling businesses. The patents portfolio is the last of the major assets to be sold.

Research In Motion Ltd., the maker of the BlackBerry smartphone, and phone-equipment supplier Ericsson AB are also weighing bids, people familiar with those companies’ plans have said.

Range of Technologies

The Nortel patents cover telecommunications technology used in wireless handsets and networks, as well as Internet search, semiconductors and social networking. The intellectual property may also help protect companies in legal disputes or generate licensing revenue.

The U.S. Justice Department has been monitoring the bidding for the patents to see if they may be used to hinder competition in the wireless industry, one of the people familiar with the matter said.

To top Google’s bid, companies have to offer at least $929 million under rules approved by the courts overseeing Nortel’s bankruptcy. The growing interest may boost the price for Nortel’s patents to more than $1 billion, said Rich Ehrlickman, president of Boca Raton, Florida-based patent broker IPOfferings.

The case is Nortel Networks Inc., 09-10138, U.S. Bankruptcy Court, District of Delaware (Wilmington).

--With assistance from Steven Church in Wilmington and John Lear in Chicago. Editors: Nick Turner, Stephen West

To contact the reporters on this story: Olga Kharif in Portland at okharif@bloomberg.net; Adam Satariano in San Francisco at asatariano1@bloomberg.net; Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net; Peter Elstrom at pelstrom@bloomberg.net

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