Nortel’s landmark patent auction has produced a winning bidder, and the only surprise is that it was a team effort: six companies, including Apple (NSDQ: AAPL), Microsoft (NSDQ: MSFT), and Research in Motion (NSDQ: RIMM) paid $4.5 billion for the 6,000 patents up for auction by bankrupt Nortel.
Nortel announced late Thursday that the consortium, which also includes EMC, Ericsson (NSDQ: ERIC), and Sony (NYSE: SNE), will assume control of the patents following a final approval hearing in July. “The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world,” said George Riedel, Chief Strategy Officer and President of Business Units for Nortel, who will get to celebrate Canada Day on Friday knowing he’ll soon have a big check to present to his creditors.
The obvious big loser is Google (NSDQ: GOOG), which had won the right to place the stalking-horse bid, or the floor for the auction at $900 million. Google had hoped to use the patent portfolio as a defense against the many Android-related patent lawsuits it faces but will have to find another defense, as Apple and Microsoft are among the companies leading the legal charge against its Android partners.
The consortium disguised its interest while bidding under the pseudonym Rockstar Bidco LP, a name that had surfaced in pre-auction filings and had confounded the legal community, who couldn’t quite figure out who would be bidding for mobile patents under that name. But court documents filed late Thursday swapped out Ranger Inc., which was the name of the subsidiary Google had used to make the stalking-horse bid, with Rockstar Bidco, a name that a junior associate at a law firm handling the case probably thought was hilarious.
But the Department of Justice was in on the joke, giving Rockstar Bidco clearance to bid on the patent portfolio without disclosing the companies that were behind the effort. Apple had reportedly received separate clearance from the DOJ to bid on the patents, but we now know that clearance was linked to the consortium.
It’s not clear if the consortium has access to the entire portfolio, or whether they divvied up the spoils among themselves. In separate statements, RIM said that it paid $770 million as part of its role, while Ericsson said it paid $340 million. Contributions from the other participants were not immediately available.