Bloomberg News

Microsoft Objects to Nortel’s Proposed Patent Sale to Google

June 13, 2011

(Updates with demand to clarify rights of license holders in third paragraph.)

June 13 (Bloomberg) -- Microsoft Corp. objected to Nortel Networks Corp.’s proposed bankruptcy sale of more than 6,000 patents, telling a judge the deal could give the proposed buyer, Google Inc. an unfair competitive advantage.

Microsoft joined computer maker Hewlett-Packard Co., smartphone maker Nokia Oyj, and other technology companies in filing objections to the proposed auction of the patent portfolio, in which Google is the lead bidder.

Microsoft and HP said the terms of the proposed sale should be modified to protect the rights of license holders and standard-setting bodies.

Without changes, the proposed sale “would result in considerable disruption in the development and enhancement of various existing technologies and give the prospective purchaser an unfair competitive advantage,” Microsoft said today in court papers filed in U.S. Bankruptcy Court in Wilmington, Delaware.

Nortel, a Canadian phone-equipment maker that filed for bankruptcy in January 2009, agreed to sell the patents to Google for $900 million unless a competitor bids more at the auction, scheduled for later this month. Today is the deadline for bids to be submitted.

The portfolio will give the winning bidder rights to control and license wireless-video technologies and others that may be valuable for future generations of smartphones such as Apple Inc.’s iPhone and RIM’s BlackBerry.

Whoever wins the auction must sign a purchase contract that clarifies the rights to use the patents Nortel made with companies before it went bankrupt, Microsoft, HP and Nokia said in court papers they filed separately.

The case is Nortel Networks Inc., 09-10138, U.S. Bankruptcy Court, District of Delaware (Wilmington).

--Editors: Andrew Dunn, Charles Carter

To contact the reporters on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net.

To contact the editors responsible for this story: John Pickering at jpickering@bloomberg.net.


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