Get Ready for a LTE Patent Shootout

By Mark Evans | Published: August 22, 2009

After buying Nortel’s CDMA business and LTE R&D unit, Ericsson appears to have its sites set on Nortel’s LTE patents – an asset that Research in Motion has been aggressively positioning itself as the logical buyer.

Mark Henderson, president of Ericsson Canada, told Bloomberg that: “Any asset that came up for sale that was complementary to our business we would look at.”

Nortel has about 3,000 patents, including about 100 related to LTE. The LTE patents are attractive because as LTE is embraced as the next-generation wireless technology, the company controlling these patents could have a lucrative and strategic asset if other companies need to license them.

Ericsson’s interest in the LTE patents is obviously terrific news for Nortel’s creditors because it could lead to an expensive battle between Ericsson and RIM for the LTE patents. RIM, which has been involved in several high-profile patent disputes, wants the LTE patent because they will strengthen its market clout with wireless carriers and telecom suppliers.

The company has been aggressively and publicly lobbying the Canadian government to review the Nortel-Ericsson deal because it contends the CDMA and LTE R&D assets are of “national interest”. But this is really just a strategic smokescreen as the RIM’s real target are Nortel LTE patents.

When these patents eventually go on the block, there’s no doubt RIM will impress upon the federal government that these assets are of “national interest”. There’s no doubt RIM will likely have to pay a healthy price for the assets but with $1.7-billion of cash and short-term investments, it has the financial muscle to go high.

More: While Ericsson contemplates bidding for more of Nortel’s assets, it is still waiting to see if the Canadian government will review the CDMA/LTE R&D business.

“We’ve met with them openly and tried to give them all the information that they need . . . and also to submit facts around any concerns around national security,” Ericsson’s Henderson told the Ottawa Citizen. “So we’re openly discussing with them and waiting for their decision.”


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  • whatnext4nt
    About time for another stalking horse isn’t it?
  • zeroman
    This is hyped up for more than its worth. There must be patents for sure but its not at the level of pulling off a Qualcomm for CDMA, especially in RIM's case. The other LTE vendors (handsets, equipment) probably have their own patents, so this will most likely result in a patent swap or cross licensing. RIM maybe protected but it will not be a whole lot of protection for the amount they shell out.

  • whopperscan
    What LTE patents does Nortel have anyway? I wonder if they're worth much, and if so, why.
    Remember Nortel put all it's eggs in the Wimax basket initially... which failed.
    Didn't that make Nortel quite late onto the LTE scene? Some thought we'd missed the boat entirely, as the first wave of customer trials and installations were under way already.
    So does anyone have an idea which of the LTE patents Nortel holds is unique, really worth something?

  • zeroman
    the biggest mistake was to give 3G to Alcatel. So they took that customer base, poached Nortel 2.5G customers and will move all of them to 4G in a few years when LTE takes off.
  • exnt_x_2
    It's so weird. No one who actually did the thought, the work and the invention behind these patents is even involved here.

    When do you get paid?
    Never.

    The British system worked. You got paid what you were worth.
    The patents you owned proved it.

    Nortel, you were just a bunch of monkeys.

    Pass the peanuts, please.
  • yes4aapl
    The British system worked. You got paid what you were worth.
    The patents you owned proved it.
    ===
    re
    Can you be more specific?
    British system, is that like German system too?
  • happyfeets
    I did not see Nortel listed in the consortium of LTE developers. I remain to question its competitive strengths not knowing much about them. Such a short development period for these few patents to be worth this much relative to the greater and worthless prehistoric patents.

    Only 100 of the 3,000 patents is so few to this upcoming LTE but seemingly powerful enough for RIM to want them so badly. To pair their products with a standard they own.

    If RIM takes these patents it will ensure this Canadian developed standard will benefit a Canadian company than continuing this lose-lose situation considering the costs of SR&D too.

    It must be a slam dunk to anticipate they will lock this up past old departed management's blunders to sell everything as fast and as much as possible. neglecting the technology as much as their employees.

    See why RIM didn't bid on the other stuff Nortel sought to liquidate ASAP to be excluded from bidding on this for a year when Nortel will be vapor branded. Ya they were welcome to bid alright, missing other key patents... for some hoax year when they won't be around or bought by others

    To who else might be these patents worth as much. Palm or Apple? ...great... may as well sign the rest of our 20% of our industry over to the protectionist and exponentially more patriotic Americans who ran Nortel to the ground, basically own our auto industry and large pools of employment, and 80% of our economy...

  • scalppeeler
    The sad thing about that is the americans are doing a much better job managing things in a foreign country, Canada, than any current politicians in Canada at the federal, provincial or municipal levels. They bring some sanity and rational to the table. Two virtues our government do not have, amongst many other missing ones.
  • JL123
    Scalppeeler,

    Is the grass is greener on the other side???? or are you holding a grudge against your motherland (assuming you are a Canadian)????
  • scalppeeler
    Definitely Greener.
    And yes I hold a big grudge against Canadian polticians since Pearson and Trudeau who have absolutely ruined Canada.
  • horace_grimswold
    RIM is playing "smart boy" and putting itself in a no-lose situation.

    RIM is using government leverage to acquire Nortel's LTE patents at below-market pricing.

    If RIM gets the patents, it wins the prize.

    If RIM loses the patents, it can go on the war path against Steve Harper's Conservatives, and has a token to extract unspecified future concessions against Canada (e.g. tax concessions by threatening to move people offshore, domiciling corporate RIMM in America, etc). RIM will proudly advertise to the world that the Government of Canada doesn't give a sh1t about high tech. And get something in return.

    Caveant consules, Steve Harper is too dumb to care. He also knows that his tortured soul survivalist government won't be around long enough to see the consequences of his ineptitude.
  • happyfeets
    RIM is just embracing not being thwarted at every turn again.

    They were already double-crossed by signed agreements before this downplayed bankruptcy that weren't worth the paper written on. Then an ultimatum to sign but now limiting the bid and a year to bid on others, they called fair... the court said so ... to sell as fast as they could for as much as they could

    Keystone clowns at Nortel had anyone sign as fast as they could and played musical chairs with the terms to maximize getting as much as they could for big business creditor pals. To heck with past agreements, bankruptcy changed that.

    RIM should chase this down and I can't see anyone bidding higher on the patents they want anyways.

    Was this whopping 1.1B RIM would have offered without CDMA and EDC welfare? This would be way more than Ericsson's $1.13 (loophole artists Nortel valued ridiculously low fraction to what it was sold for so as not to trigger government intervention) and to have the courts exclude them by not signing Nortel's NDAs with post insolvency restrictions, to sell ASAP for as much as they can before they bounced... as they could have seemingly got more from RIM it seems.
  • less
    If only govts were allowed to re-sissue quarterly earnings restatements like some companies....
  • alexglee
    Nortel will need strategic development of the patent portfolio for maximizing its LTE IPR asset values: recent LTE IPR analysis for several LTE IPR licensing contenders including Nortel, Motorola, InterDigital, and LG electronics by TechIPm shows that Nortel's LTE patents are not developed strategically to be the "essential patent for LTE" compare to other contender's LTE patent portfolios.

    For details, please refer the techipm-innovationfrontline in blogspot.
  • TongueInCheek
    The debate over Nortel patents is likely to extend beyond just the LTE patents. From various reports, there will be around 3,000 patents not sold with the different businesses. Mark calls out about 100 patents related to LTE, so what about the other 2,900?

    No doubt some of these patents will be related to Optical and Voice technologies. These too may be valuable depending what they are, and their current lifecycle. Remember the Nortel patent infringement suit against Vonage included issues related to infringement on 911 and 411 patents.

    Who knows how Nortel will handle their remaining patents, but there is a lot more to this than the 100 or so LTE patents.
  • whatnext4nt
    There are numerous non LTE NT wireless patents of course.
  • yes4aapl
    When Nortel or JDSU went on the Buying Spree around the world, everything was OK, right?and those acquisitions were basically to eliminate competition.
    Look at stock market of both these companies today.

    Using the same logic it's OK if E// buys Nortel, isn't not?
    It's interesting that NOK was OK for government and got $300 mill financial support from EDC.
    How E// is different?
    E// will put those fears of national interests and security at rest.

  • less
    Hm. I heard E/// was doing it for the people first, money second. Now it looks like they were using people as a reason to get at the money,

    Don't the Chinese call it 'NoLTEl' anyhoo?

  • NortelTragedy
    If Nortel, its patents, its employees, or any other asset were such a "national treasure" or even important to the government, it would not have allowed it to fail. They're damn patents. Nothing more. LTE will be replaced in, what, 10 years. Get over it Canada!!! There is nothing national about it anymore ... Nortel is dead. Blame the corporate execs and BOD - US and Canadian - and the governments for not intervening sooner. Mike Z and the BOD was allowed - and incentivized - to bring Nortel into Chapters 11 and 7. It's over.
  • biddut
    Why is that all patents are Candian national treasure????? Lot of CDMA and LTE patents have been developed in USA ( Texas) and in China. RIM also has a huge footprint in Texas.
  • scalppeeler
    Let's not get overconfident with this.
    Best case they may get 600 million for these patents.
    If you add that to all the speculative sums they will receive after selling everything off they still will not have covered their original debt.
    After the judges, lawyers etc the payback might still be pennies on the dollar for the ex-employees. It might start to look better for the big creditors if bidding wars like this fetch some bonus money? Unfair dismissal. I guess that is a case every single ex employee could make. Some can probably gain more merit, traction, sympathy and ammunition than others depending on personal family situation, perceived or documented wrongs created by management, whether taped or whatever, standing relevant to peers doing the same job or much less but being better compensated. I suppose the possibilities are endless. Just file your mountain of claims, enlist your lawyer and sharpen the hatchet.
  • Zhacknightmare
    Wonderful, I hope E&Y realise a record price for these, might help them pay me and my Lawyer for my Unfair Dismissal case.
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