The battle for Nortel’s patent portfolio is over (see NYTimes and WSJ). The Canadian telecommunications company fell into bankruptcy and the trustees began selling of assets — specifically selling off various business units. Recognizing that Nortel’s patent portfolio of 6000 patents constituted a stand-alone asset, they set up a patent auction. The winner, announced yesterday, is was a consortium of Apple, Microsoft, Research in Motion, Sony, Ericsson and EMC. Losers in the bidding were Google and Intel. The price tag: $4.5 billion. And that was for a portfolio that most observers believe will be used for defensive purposes.
Over at the IAM blog, Joff Wild has a good take on what this might mean for the relationship between companies and investors:
Nortel investors, on the other hand, will look at all of this and weep. How could the company’s board failed to have seen the potential in the patent portfolio that it owned? I don’t know if it is possible, but if it is surely some kind of action based on negligence or complete incompetence is going to be taken. Though in the end, I suppose, if investors had taken any notice of IP themselves, perhaps they could have asked a few questions that may have alerted senior management to issues that they were ignoring.
Maybe, just maybe, Joff is right and this will raise the issue of IP value — and one hopes the broader issue of intangible asset management — to the level of the Board of Directors. But I agree it will take an investor lawsuit to get people’s attention. So we will see.