Feds Not So Excited About Who’s Buying At Nortel’s Giant Patent Sale


Credit: Wikimedia / U.S. Patent Office

U.S. government lawyers are taking a close look at who’s interested in buying a giant batch of 6,000 patents related to mobile technology that are being auctioned off to pay creditors of Nortel, a once-innovative, but now bankrupt, wireless tech company. They’re worried the patents could be used to deter competition in the wireless, to the point that it’s an antitrust issue. And the company under the most scrutiny? It’s not Google (NSDQ: GOOG), with its $900 million bid. It’s Apple (NSDQ: AAPL), according to a report in the Wall Street Journal.

Why does Apple get the closer scrutiny? Well, it seems to be because the company has a decidedly different stance towards patents than Google. Perhaps more than any other tech company in the past two years, Apple has shown its willingness to try to use patents to slow and block its competitors with lawsuits (although, it’s had little success thus far). Google, on the other hand, generally only uses its patents defensively, and company executives have sometimes complained about how patents can be misused to thwart innovation. In April, Google general counsel Kent Walker explained the company’s bid for the Nortel patents on the Google blog, writing: “[A]s things stand today, one of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services.”

Sources that spoke to the WSJ said that the Department of Justice isn’t really worried about Google’s bid for the Nortel intellectual property, but has “greater concerns” about Apple. There’s not much more detail other than the fact that Apple has been talking to DOJ to try to address those concerns.

The Nortel sale is certainly one of the largest sales of intellectual property in the history of technology, and there’s some concern that if those patents fall into the wrong hands it could spur even more patent lawsuits against tech and mobile companies. Nortel has a recognized history of innovation that make its patents valuable-and potentially dangerous. “You’re acquiring a stockpile of nuclear weapons as far as patents go,” Alexander Poltorak, chief executive of patent enforcement company General Patent Corp. told the WSJ.

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