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Nortel patent sale gets court approval

Judges in the U.S. and Canada approve the $4.5 billion sale of Nortel's patent collection to a consortium of companies including Apple, RIM, and Microsoft.


A consortium of companies that includes Apple and Microsoft has been given the OK by courts in the U.S. and Canada to buy some 6,000 patents and patent applications from Nortel Networks.

Reuters reports that judges from both countries approved the sale in a joint hearing held earlier today.

Late last month, Nortel's patent portfolio was sold to a consortium of technology companies comprising Apple, EMC, Ericsson, Microsoft, Research In Motion, and Sony. The group beat out rivals including Intel and Google with a $4.5 billion bid for the intellectual property, which included patents and patent applications for wireless, wireless 4G, data networking, optical, voice, Internet, and semiconductor technologies.

According to Reuters, the three-day auction for the patents lasted 19 rounds, with Apple only joining the consortium five rounds in. Intel, which reportedly began the bidding, eventually teamed up with Google to take on the consortium.

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Toronto-based Nortel filed for Chapter 11 bankruptcy protection in June 2009. At its peak in the 1990s, the telecommunications company was worth $250 billion, and had more than 90,000 employees. The company was hit hard by the credit crunch, and struggled to get back in form after the economic downturn in 2001 and 2002.

Since deciding to sell off its business, Nortel's collection of intellectual property has been highly sought-after. In early April, Google pledged $900 million in cash to buy the IP portfolio, effectively kicking off an arms war for other companies to go higher. The sale was originally slated to occur in mid-June but was delayed due to what Nortel said was a "significant level of interest."

The need for companies to have a so-called "war chest" of patents has become an increasingly important part of doing business. Mobile devices in particular have become the latest target of patent litigation, due to their combination of features that may have previously been available only in standalone electronics.