The formerly high-flying Canadian telecommunications hardware provider Northern Telecom appears to be on its last legs, and Apple and Google are apparently among the vultures circling overhead ready to pick at the most valuable parts of the carcass. The two Silicon Valley companies are said to be among the bidders for Nortel's huge patent portfolio.
Nortel is a company with a history dating back to the earliest days of the telephone, having been established in 1882 by the Bell Telephone Company of Canada to manufacture phones and network equipment north of the border. In the 1990s, Nortel had tremendous growth as it provided many of the bits and pieces that made the expansion of the internet and mobile phone networks possible. The burst of the bubble saw the rapid decline of Nortel until it finally filed for bankruptcy protection in mid-2009.
Nortel has a portfolio of over 4,000 patents estimated to be worth over $1 billion. With both Apple and Google involved in patent litigation relating to their respective mobile phone efforts, the Nortel patents are likely be of great value as a defensive measure. Research in Motion and Motorola are also expected to bid on the patents in order to protect their own positions. Intellectual property battles between big companies often end up in a stalemate if both sides can conjure up sufficient patents that their opponent might be infringing on. The result is usually some sort of cross-licensing agreement that makes the lawyers wealthier and lets the companies go on their merry way. The auction of the patents is expected to be wrapped up soon.