An Update on Nortel’s Patent Portfolio

By Mark Evans | Published: October 27, 2009

Ernst & Young has issued the 25th Monitor’s Report. Of particular interest is the discussion about Nortel’s patents, which could be worth several billion dollars.

After completing a review of its patents to determine what patents should be assigned to the buyers of its business units, Nortel determined there are about 3,400 residual patents that haven’t been assigned to the buyers of individual business units.

Nortel then decided to engage a consulting firm with expertise in patents and intellectual property to provide .an analysis of the portfolio and advice with respect to maximizing value from this portfolio. Following presentations from several consulting firms, Global IP Law Group was selected, and an agreement was signed last month.

Nortel expects to receive a preliminary report from Global IP by the end of 2009. It will then consider the various options and determine next steps, which suggests Nortel’s bankruptcy protection process will likely stretch out to more than a year.

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  • KayToo

    Wasn't that part of the vision that the ghost of Nortel might continue as an administrator of patents after all the fire sales were over?

  • bankrupt_bob

    Wonder who works for the freaking consulting firm? And how much is it going to cost. It's obvious why there won't be anything left for the “common” shareholder!

  • bankrupt_bob

    Scary…. verrrrry SCARY! They've outsourced again!

    http://giplg.com/

  • protosphere

    Several billion for a few hundred million annually today?

    When do licensing agreements expire, who will renew these licensing agreements that makes stalling selling them all that more senseless …as if creditors aren't antsy enough to wait yet over another year.

    Several billion? To who? How much do they earn? What will they be worth in a year amid rapid change? How will the return on the buyer's investment be calculated or guaranteed?

    Is E&Y commissioned on this stall nonsense or something?

    heh, why not a trillion as they were to be a great company again…

    Luck if they can sell their LTE patent rights to some one who might seek exclusiveness in this short developed technology to pair with their own perhaps, like RIM.

  • protosphere

    heh, who see's the money in a gold rush, they guys selling the beans, the booze, and the broads.

    These lawyers didn't develop a thing to be commissioned on securing a sale, regardless of what it sells for. Needless to say the more the merrier but the patents will be gone as they must be sold (sorry TiC). Everyone wants a piece of this corpse =)

  • Another_Nortel_Watcher

    The longer the bankruptcy process takes, the better for pensioners as long as the market continues in recovery mode. Who knows, maybe it will be fully funded by the time it is wound up. On the other hand, maybe another war will break out in the middle east over Iran's nukes, driving the price of oil up and the economy back into the toilet.

    It's all a crapshoot.

  • zeroman

    Several billion dollars ?? how much is Nortel making now in license revenue? this is just going to be a long drawn out process spending more money on consultants. you think someone is going to pay billions for patents – no way. this also proves how clueless Nortel management were. They did not have a valuation on their own prize assets. ouch!

    It defnitely makes for paycheques to be drawn out for another year.

  • whopperscan

    I find it hard to believe the speculation (and that's all it is) that there might be billions in value of those patents remaining,a that were not sold as part & parcel of the business unit sales.
    Golly, some consultants said there would be money to be made. And some nice, unclear, unspecified duration (therefore unknown & open ended cost) contracts to consulants, was the perfect way to realize it.
    Ha.

  • 4merEmployee22

    Just really? WHEN WILL THIS FIASCO ENDS???

    I wish that the RCMP could step in? They should really turn this fiasco
    into a PUBLIC INQUIRY now!!!

  • RedFlag

    It would be nice to see Nortel survive as a holding company and then slowly grow to world class again learning from its past. This company would have new faces.

    I see the Canadian government stepping in when it comes to letting these patents go.

    Nortel comming thru alive in this sceanrio is a real possibility. The focus is on employees and pensionioners and righly so! But current shareholders who got ripped off deserve some ownership even if their current ownership is vastly diluted to the bondholders and preferred shareholder.

  • less

    … new faces, but a thoroughly tarnished name. Recall Nortel's scoffing Alcatel and Lucents “desperate” merger three years ago. Its in todays news:

    Alcatel-Lucent to post 3Q loss
    10.28.09, 07:19 AM EDT

    Alcatel-Lucent has struggled to justify its 2006 trans-Atlantic merger, piling up around euro9 billion in losses since its creation and just one profitable quarter. The fixed and mobile telecommunications equipment maker will again disappoint investors hoping to see a return on the tie-up, with analysts forecasting another quarterly loss for the July-September period.

    The company has also warned investors not to expect a full-year profit until 2011, five years after its top executives promised to create a global leader

    The market decreed that ALU kinda sucks, in part because

    1. Mergers of Equals Don’t Work (big egos clash)
    2. Distance Hurts (if you're not a global villager)
    3. Competition Moves Forward (Cisco)

    I'll bet ALU applies somewhere between 5.5 – 6 Sigma, but it lacks any of the chronic accounting scandals, blatant cronyism (big egos needing cash) and myriad global blunders that would remind anyone of Enron, Tyco, WorldCom. Or Nortel.

  • zeroman

    I have been saying all along ALU will become the next Nortel. Half the company is from the dinosaur era. The two never saw and never wil lsee eye to eye.

  • less

    It well could happen, but a few things would still have to happen for it to match Nortel's scale of scandal and waste. In a sad way Ch11 could put telecoms somewhat back on track.
    Its gonna cost another fortune and many years to restore the Nortel name. I wonder what Ciena etc. plan to do with it; Verizon did well to let the names MCI/Worldcom quietly disappear from its banner.

  • freqmgr

    Holding what? The only IPR that will be left is legacy or not very useful. Of course that will allow some to continue to have a bonus paid. Nortel becoming world class will require not only new faces for most of the remaining “leadership”, a new name and a new ethic. Hopefully this will all be over in CY 2010.

  • zeroman

    they will not hold onto legacy as it will only cost them to maintain them. usually only 5% of patents are worth something so if that is true would think 150 odd patents will being in millions in revenue. only they will force a package sale. maybe it will go on to 2011.

  • zeroman

    Nortel will disappear too. Nobody would want a tarnished brand. No matter how much CLR or spit one puts on it to polish it up, there will be no difference. End of an era.

  • fsmith

    I just sold a bunch of NT for $0.057 a share. Who is buying this and do they really expect it to be worth something someday?

  • fsmith

    I just sold a bunch of NT for $0.057 a share. Who is buying this and do they really expect it to be worth something someday?

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