RIM’s Relentless Request for Action

By Mark Evans | Published: August 20, 2009

If Research in Motion were a dog, it would probably be a pitbull.

In continuing its campaign to get the Canadian government to review the sale of Nortel’s CDMA business and LTE R&D unit to Ericsson, RIM is now asking for changes within the Investment Canada Act be that would allow the deal to be reviewed to “ensure that Canada’s national interests are met”.

The rule changes focus on the use of an asset’s enterprise value as opposed to book value. In the case of the CDMA business, Nortel has a book value of $149-million even though it sold for $1.13 billion. This put the deal below Investment Canada’s $312-million review threshold.

RIM, however, wants the rules to be changed – and pronto. “If the draft regulations inadvertently exempt this type of transaction, then RIM calls on the government to use its legal ability to promptly adopt the final regulations under the Investment Canada Act.”

RIM has to be given credit for its persistence and doggedness but, at the end of the day, its moves should be seen for what they are: a calculated and strategic campaign to convince the federal government that other assets of “national interest” should be kept in Canada when Nortel puts them on the block.

RIM wants Nortel’s LTE patents so when Nortel decides to sell them, there is no doubt RIM will let Ottawa know they be sold to a Canadian buyer. Then, RIM will bid what it needs to be to take home patents that will be a key asset as the wireless industry embraces LTE and 4G.


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  • free_agent

    Or more plainly, after having gotten the Canadian government to restrict bidders for the LTE patents to Canadian companies, RIM can win with a low-ball bid because all serious competitors will have been eliminated.

  • bjake

    RIM is a pitbull? More like RIM is one of those annoying yappy little dogs that sits on the other side of a chain link fence barking and barking just begging someone to notice it, then when someone does it scurries under a rock until someone else comes along that isn't paying attention to it.

    As an employee of Nortel(Or what is left of it anyway) I want RIM, the federal government and all these whiny show boaters to go away so that I can get my job transferred to a real company, or at least know for sure that I don't have one, so that I can get back to living my life.

    Its all fun and games for the jerks at RIM, and the political losers on Parliament Hill, but there are real people, with real jobs, who just want it to be offer.

  • TongueInCheek

    While RIM is being aggressive in avoiding court process and influencing government, they have said very little about their actual intentions. Notice that NSN and Ericsson were both very clear on what happens with the CDMA business and the employees, yet nothing from RIM on these two key parts.

    At what point does the government step up and demand real answers about this business so that realistic answers can also be given to Nortel creditors?

    Also, is RIM going to honor the existing LTE Patent Licenses with Hitachi and others? Are they going to follow the industry standard of cross-licensing, or is it their intent to hoard the patents, effectively blocking their competition such as Apple from using valuable technology.

  • john2009

    RIM's noise is unacceptable. They only want LTE R&D and patents. Who will buy CDMA without LTE ? What would be future for CDMA Customers & Employees. Really Nortel did the right thing of blocking Rim after a decade long mistakes of continuous wrong decisions.

  • Teleguy

    Agree with you. Not a pitbill, just yappy. And RIM has no experience in this area, while the other companies are very qualified. RIM imagines that if it waves the Canadian flag, the Gov't will stop the sale. Stupid and immature games. Nothing more.

  • less

    Rumor perists that Nortel first did a gimme paw with RIM, then turned around and bascially gave away the prize to the cutest puppy at the show. because it was over for Nortel. I doubt Nortel had a sudden epiphany about the fate of customers and employees and finally acted in their best interests

  • fabrice002

    Calculated to let RIM get the patents on the cheap, without competition.

  • GoProto

    I strongly suspect this rumour to be true. Remember reading somewhere either on AAN or in an article perhaps a timeline of NT that stated Mike Z and RIM were in talks in the Fall of '08,(?) before the BK happened. I bet what you said above has at least a grain of truth in it, and, it sounds just like the Z and company way of doing things as they have lied and mis-represented all the way down this path to ultimate destruction.
    Do you remember seeing this and where it was?

  • less

    10 Aug 2009 01:43 PM CET | World
    Research In Motion has claimed it twice had “handshake” deals to buy some Nortel Networks assets. RIM co-CEO Mike Lazaridis told a parliamentary committee hearing one deal came just before Nortel filed for bankruptcy protection…

    http://www.telecompaper.com/news/SendArticle.as…

  • ltd_sleeper

    All I gotta say is that RIM has a management team that is savvy and strategic. Too bad Nortel was slow-witted and plodding.

  • happyfeets

    Just how much are these patents truly worth?

    Not from what Nortel vlaues them at when it suits them but truly worth.

    Considering a lot of hype over too short a development time, how could they have possibly mustered such value for future LTE over such a short development cycle?

    Remember, 4G/LTE leapfrogging 3G (that sells now) is was what they boasted after selling their 3G/UMTS to ALA-LU…as others come out with their own 4G flavors too so as not to forget competition…

    Is it worth what they say? Where is the value? I do not understand this.

  • GoProto

    Yep, that's it. thanks Less..

    GP

  • less

    I have this fantasy in which a Nortel/RIM JV has that co=CEO Sillyballs dude following MIke Z around to learn some global suave and savvy.

  • bjake

    RIM just seems like Nortel and Palm and other companies in the late nineties who felt that the sky was the limit and they were invincible.
    RIM doesn't appear to have any business plan outside of the Blackberry, and we all know what happens when some piece of technology gets turned into a commodity, just ask Palm, and IBM(the PC?)…

  • zeroman

    pitbull never … more like a cranky cat … and if Nortel were a dog it was a Rottweiler turned into a sick, abused,dying animal about to be put down humanely in a shelter. The clinic (BoD), doctors (Z and team) and nurses (management) made sure they made it worse with all the surgeries (cuts) and trial procedures (six sigma, own it).

    Canada's faithful tech dog 18xx to 2009.

  • happyfeets

    RIM can build on it to market… it is exactly their area of concern they are interested in than blow these efforts to the wind

    Future LTE and with dying CDMA, paired to dupe value of declining earnings with future LTE promise is like putting lipstick on a pig

    Astounding anyone was willing to take this, albeit with a sweetened $300M EDC welfare to preserve the corpse just that much longer.

  • happyfeets

    “Nortel has a book value of $149-million even though it sold for $1.13 billion.”

    Is this legal? So many profoundly astounding conflicts of interest make them seem like they can do what ever they want amid a challenged audience asking all the wrong questions.

  • GoProto

    Haven't they been doing whatever they want skipping all the way down the path to ultimate destruction? How did they ever and contunue to get away with labeling themselves under CH11 when they have essentially acted to liquidate? Have they acted in shareholders best interests while under this false CH11 label?
    Has anyone in a position to do anything about these things called them out on it?

  • TongueInCheek

    Take it up with the Bondholders and Creditor Committee. See how they feel about this.

  • zeroman

    so what boo hoo. I had lots of handshakes in my life but things did not work out.

    RIM needs to get out of school boy mode (Waterloo) and get into the real world. Its going to be tougher with Apple, Google, Dell, Samsung, LG Nokia. I was going to g owith Blackberry but competition is so fierce, that I can get the same functionality.

    Locking onto Samsung or Nokia. iPhone I get locked in.

  • less

    I've hired and fired a few God-fearin' good ole boys solemnly promising “I'll do ya right” in my day – 25-year-old kids with “30 years experience”. These bidness relationships alway sended the same way, too, with pat apologies over the phone.
    Yet I never thought to hire a lawyer to hire them, or my lawn guy.

    Reneging on handshakes seemed to add up in Nortel's case.

  • GoProto

    Reneging on handshakes seemed to add up in Nortel's case.
    ________________

    They have no class or integrity. They made things up right and left. I am sure the “re-structuring plan” will be here soon Team… Look at how they have handled (bungled) things from the beginning. Who did they do right by? Only themselves, and even as far as to jump ship before bow sinks.. even that is not an honorable course of action.
    A handshake with them is as good as Zero.

  • GoProto

    I know how MP feels about it.

  • yes4aapl

    Just how much are these patents truly worth?
    ====
    re
    The answer is simple
    Considering the BK Nortel is in these assets cannot be worth more than they invested in that.
    Nortel declared that they invested $300 mill in R&D for LTE.

  • yes4aapl

    “Nortel has a book value of $149-million even though it sold for $1.13 billion.”
    —
    re
    As an accountant I say it's a BS!
    Nortel cooks the numbers!
    Why nobody asks how much Nortel invested in it to see the real numbers?
    It would be billions and billions…. and billions!
    What Nortel thinks? The public is never right?
    I am one of the public!
    I've exposed dozens of Nortel's frauds and lies!
    Do you want a list of it_of lies?
    Call me!
    yes4!

  • yes4aapl

    Take it up with the Bondholders and Creditor Committee. See how they feel about this.
    —
    re
    We know how they feel about it.
    Nortel lies to bondholders and creditors!
    Rimm said so. Oh I was first to say so and Rimm just confirmed my opinions.
    Tell me, was I right?

  • yes4aapl

    Let me ask every one here.
    Did I say yesterday that Rimm will be killed if Canadian Gov will not help Rimm/
    Did I say Canadian Gov will kill 2 birds with one stone? Nortel and Rimm?
    Where is my post about that? Did Mark Evans decide it was offensive?
    Where is my post about 2 birds killed?
    yes4!

  • painful_truth

    Canadian Rim Job……

  • confusius

    The deliberate intent, by Nortel and the buyer, to maintain the value of the assets below the 312M$ threshold was very clear during the inquiry.

    The new rules that would use 'Enterprise value' instead of 'Asset Book Value' are in the process of being implemented. If this was deemed as a necessary change by the 'legislators', accelerating the implementation process seems to be a sound approach.

    I wonder if anyone caught another 'strange twist' during the hearing. Although RIM argued that they refused to sign a NDA that included a 'standstill' provision that would have prevented them from bidding on other business units, and NSN confirmed thay had agreed to the same clause, the Ericsson team clearly sad that they did not have to agree to a 'standstill' clause to be qualified as a buyer.

    One of 2 things, either the Ericsson team provided the wrong answer, or RIM may have grounds to argue that the process was unfair and that they were voluntarily excluded by NT management.

  • free_agent

    I'm told Nortel has always had good technology and bad management. It's quite possible that Nortel devised the best technology for LTE, got the patents, got the technology accepted as the standard, and is now collecting a good income stream from other companies which are selling LTE devices. If the patents are embedded in the standards, there is no competition — competitors that are better at going to market have to pay royalties, too.

  • whatnext4nt

    I disagree and question the logic in your statements here yes4aapl, although you could be right regarding the pricing. The value of a patent portfolio is not restricted by how much money was invested in R&D associated with the patents. The value is in the quality and quantity of patents and what business value interested companies would place on them and what price they would be willing to pay for them.

    Analysts have estimated between $1-3B; this may be on the high side, but the value of the patents could exceed the R&D investment. Also, only a portion of R&D investment is in work that is required to generate patents.

    This is a business case assessment not bean counting of R&D costs sunk by NT. How much revenue could I generate per year for how long from this portfolio? How much would the IPR reduce the cost of royalty payments and material/parts cost for the products I make and sell? What desirable features and attributes would be added to my product and services portfolio if I had these patents? What would be the intangible/marketing value to customers and shareholders of increasing my LTE patent portfolio?

  • whatnext4nt

    Ideally RIM wins an auction for the patents and pays fair value with fair competition. That way the technology rights stay in Canada with a great and growing company that needs this technology, while creditors (including recently severed employees and pensioners) get fair value on this sale (if it happens).

  • whatnext4nt

    What a crock. Either you don't know what you are talking about or you are a competitor trying to gain some imagined advantage by spouting this BS. Or perhaps you are a disgruntled ex employee.

  • Teleguy

    He's all three.

  • yes4aapl

    This is a business case assessment not bean counting of R&D costs sunk by NT.
    ====
    re
    As I said
    Because NT is bankrupt you can buy their patents by kilos.
    It's like treasure hunting from a sunk ship…
    btw
    Does posters here refer to Nortel as MS Nortanic?

  • Pingback: Get Ready for a LTE Patent Shootout

  • fabrice002

    Ideally, right. But it will never happen that way, because by declaring the patents Canadian-bound the number of competitive bidders (Ericsson, Siemens, Nokia, Huawei, et. al.) will be effectively prohibited.

    So, who are the other Canadian technology players strong enough to run with these patents?

    Consequently, in practice, restricting the patents to Canadians will cut off retirees at their knees.

    At least that's how it looks to me. :>)

  • scalppeeler

    Have to agree with you on that.
    Not only have the federal, provincial and municipal governemnts in Canada failed miserably with respect to Nortel employees in canada, jobs in canada and innovation in Canada they continue to sabotage and handcuff by doing nothing. Clements office now is officially saying no comment while the employees spin in purgatory. The Canadian government is stalling real action and hampering interested parties and companies who at least are showing some faith in the workforce and will likely offer employment in a large number of cases. Remember this at voting time how your governments failed you not only BEFORE but AFTER the fact as well. They really must have it in for Nortel. I think they want to drive whatever is left of it into the dust along with all the Canadian Citizens working for it. I've said it before and I'll say it again. Canada does not like to take care of its own. It only springs to action if votes are involved, a media campaign blitz is launched or you sue them, at which point they'll gladly pay. Canada needs to startup some town hall debates on this. I know the pensioners are pushing for it after the way they've been screwed.

  • scalppeeler

    Here it is in black and white.
    A perfect shining example how Canadian politicians don't care about their own.
    Lots of money for multiculturalism, foreign aid, the arts, official bilingualism, welfare, refugee payouts, free health care to people who ever paid taxes but extreme doubt about tornado relief. This country really has diminished to a status below pathetic.

    TORONTO – Communities hit hardest by the string of twisters that tore through Ontario this week will have to wait to see if they qualify for federal aid.

    Public Safety Minister Peter Van Loan said Saturday that Ottawa has an emergency response program in place to assess whether damaged areas warrant federal assistance.

    The aid decision will be the result of a calculation carried out over the coming days, said Van Loan, who was touring homes wrecked by a tornado that touched down two days earlier in Vaughan, Ont.

    “It's not a political thing. It's a complex mathematical formula,” Van Loan said.

    While municipalities and provinces had the first level of responsibility to communities ravaged by the storm, the federal government is available to assist “when we can,” said Van Loan.

  • scalppeeler

    Here it is in black and white.
    A perfect shining example how Canadian politicians don't care about their own.
    Lots of money for multiculturalism, foreign aid, the arts, official bilingualism, welfare, refugee payouts, free health care to people who ever paid taxes but extreme doubt about tornado relief. This country really has diminished to a status below pathetic.

    TORONTO – Communities hit hardest by the string of twisters that tore through Ontario this week will have to wait to see if they qualify for federal aid.

    Public Safety Minister Peter Van Loan said Saturday that Ottawa has an emergency response program in place to assess whether damaged areas warrant federal assistance.

    The aid decision will be the result of a calculation carried out over the coming days, said Van Loan, who was touring homes wrecked by a tornado that touched down two days earlier in Vaughan, Ont.

    “It's not a political thing. It's a complex mathematical formula,” Van Loan said.

    While municipalities and provinces had the first level of responsibility to communities ravaged by the storm, the federal government is available to assist “when we can,” said Van Loan.

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