Consortium including Apple, EMC, Ericsson, Microsoft, RIM and Sony snags Nortel patents for $4.5 billion

News that Google had competition for a bundle of patents being sold by bankrupt Nortel Networks surfaced a week ago and now it's official; a consortium of companies including Apple, EMC, Ericsson, Microsoft, RIM and Sony won the multi-day auction with a bid of $4.5 billion. According to Reuters, RIM contributed $770 million to the effort while Ericsson is on the hook for $340 million when the deal closes, which is expected to be in the third quarter of this year. What they'll do with the over 6,000 patents and patent applications covering everything from wireless to optical to semiconductors isn't immediately clear, but what won't happen is Google using them as leverage to stave off the patent trolling hordes. Before any of that happens, the sale has to clear US and Canadian courts which is why a joint hearing has been scheduled for July 11th, so expect plenty of words -- and probably a few more cross licensing agreements -- from the involved parties by then.

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June 30, 2011, 11:51 p.m. EDT
Nortel Announces the Winning Bidder of Its Patent Portfolio for a Purchase Price of US$4.5 Billion
- Working Toward a Q3 2011 Closing

TORONTO, ONTARIO, Jun 30, 2011 (MARKETWIRE via COMTEX) -- Nortel(1) Networks Corporation /quotes/zigman/442381 NRTLQ +19.05% announced today that it, its subsidiary Nortel Networks Limited (NNL), and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited (in administration), have concluded a successful auction of all of Nortel's remaining patents and patent applications. After a multi-day auction, a consortium emerged as the winning bidder with a cash purchase price of US$4.5 billion. The consortium consists of Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony.

The sale includes more than 6,000 patents and patent applications spanning wireless, wireless 4G, data networking, optical, voice, internet, service provider, semiconductors and other patents. The extensive patent portfolio touches nearly every aspect of telecommunications and additional markets as well, including Internet search and social networking.

"Following a very robust auction, we are pleased at the outcome of the auction of this extensive patent portfolio", said George Riedel, Chief Strategy Officer and President of Business Units, Nortel. "The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world."

The sale is subject to applicable Canadian and U.S. Court approvals which will be sought at a joint hearing expected to be held on July 11, 2011. Nortel will work diligently with the consortium to close the sale in the third quarter of 2011.

As previously announced, Nortel does not expect that the Company's common shareholders or the NNL preferred shareholders will receive any value from Nortel's creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.