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Report: Nortel portfolio buyers facing DOJ scrutiny

The sale of Nortel's portfolio of 6,000 patents and patent applications may be in the bag, but the Justice Department is reportedly chatting with the buyers to find out what they intend to do with the intellectual property.

Josh Lowensohn Former Senior Writer
Josh Lowensohn joined CNET in 2006 and now covers Apple. Before that, Josh wrote about everything from new Web start-ups, to remote-controlled robots that watch your house. Prior to joining CNET, Josh covered breaking video game news, as well as reviewing game software. His current console favorite is the Xbox 360.
Josh Lowensohn
2 min read
patent illustration

Despite last month's $4.5 billion sale of Nortel's patent portfolio wrapping up this week, government scrutiny over what its buyers intend to do with the patents continues, a new report says.

The Wall Street Journal reports that the U.S. Department of Justice is "intensifying" an investigation of the portfolio buyers to see whether they plan on launching litigation against competitors, specifically ones using Google's Android.

That consortium of technology companies, comprising Apple, EMC, Ericsson, Microsoft, Research In Motion, and Sony, beat out Google, Intel, and others for ownership of the portfolio containing some 6,000 patents and patent applications for wireless, wireless 4G, data networking, optical, voice, Internet, and semiconductor technologies late last month.

That deal got approval from courts in both the U.S. and Canada (where Nortel is headquartered) on July 11, and closed in earnest today.

The Journal says that as part of the probe--which has not been made public--the Justice Department is interviewing the winning companies to see if they plan on filing suits against other handset makers using Google's Android operating system software. The department could end up placing rules and conditions on the sale based on what it hears.

Related links
Apple, RIM in group buying Nortel patents for $4.5B

Apple's $2.6 billion Nortel bid
Android IP headache may become a migraine

The frenzy over Nortel's patent portfolio originally began with a large $900 million "stalking-horse bid" from Google, in what it said was a purchase to give it protection against litigation--something now expected to be focused on its Android platform as the OS continues to gain in market share.

The sale was originally slated to occur in mid-June but was delayed owing to what Nortel said was a "significant level of interest." That interest ramped up, with multiple rounds of bidding (there's a detailed court PDF of that here), and several last-minute partnerships, including the one between Intel and Google that eventually ended up losing to the consortium known as "Rockstar Bidco."

Earlier today, blog SEO by the Sea noted that Google purchased some 1,030 patents from IBM this month, following its unsuccessful attempt at acquiring the Nortel portfolio. The search giant is also rumored to be eyeing InterDigital's intellectual-property portfolio.