Microsoft opposes Google bid for Nortel patents

Microsoft has joined HP, Motorola Mobility and Nokia in a growing line of tech companies opposed to Google’s proposed $900m purchase of Nortel’s patent assets. According to Redmond, a 2006 deal means that Microsoft has a “worldwide, perpetual, royalty-free licence to all of Nortel’s patents” and that this agreement is binding regardless of who buys the intellectual property.

Microsoft said that the current terms of sale jeopardise this arrangement. The software giant, in a submission to the Delaware bankruptcy court, said it is seeking a ruling requiring that licensing agreements currently in place “must remain enforceable against the purchasers of the transferred patents.”

Google’s bid was approved by the courts overseeing Nortel’s bankruptcy proceedings in Canada and the US early in May. Since then, Apple, Nokia, RIM, Microsoft and patent-service company RPX Corp have all been said to be interested in bidding for the more than 6000 patents and patent applications on offer. The auction, led by Google, is slated for June 20th in New York.

Google’s bid isn’t the only one giving rise to concern. Earlier this month, the Wall Street Journal reported that the US Department of Justice’s (DoJ) antitrust division was concerned that Apple’s rumoured interest in the patents would give rise to a situation in which the patents would be used to stifle competition in the telecoms sector. Apple has a reputation for ring-fencing its interests and intellectual property holdings and, according to the WSJ, was in talks with the DoJ about these concerns. Blackberry manufacturer RIM, which had expressed interest in acquiring the patents, was prohibited from bidding for Nortel’s wireless business in 2009.

The patents in question include both granted and pending applications covering wireless, 4G/LTE, data networking, optical, voice, social networking and internet, among others. Nortel-owned technology is used in Blackberry, iPhone and Android devices.

Google’s recent moves into the mobile and desktop operating systems space has attracted a number of patent-related challenge from the likes of Oracle, which claims that Android infringes on patents it acquired when it bought Sun Microsystems. Whatever happens with the Nortel bid, Google stands to turn a profit: its bid comes with a $25m “break up fee” that will see it walk away with at least some cash should another bidder prove successful. In order to beat Google, the search company’s offer must be bettered by at least $29m and offers over and above that figure must come in $5m increments.

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