Nortel: And the winner is…

Last Thursday Nortel announced the Winning Bidder of its Patent Portfolio for a Purchase Price of US$4.5 Billion (here)


As Nortel informs, “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”.

George Riedel, Nortel’s Chief Strategy Officer and President of Business Units, claims that "the size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world."

Living the figures aside (even if hard), I’m surprised to see Microsoft among the winners. Two weeks ago, we read (here):

“Microsoft didn’t bid on the patents. It didn’t have to, company officials said, as Microsoft had “worldwide, perpetual, royalty-free license to all of Nortel’s patents that covers all Microsoft products and services, resulting from the patent cross-license signed with Nortel in 2006.”

If that information was correct, when and why has Microsoft joined the bid?

Apart from that, I wonder how bad is for Google the result of the bid.

On April 4, 2011, Kent Walker, Google’s Senior Vice President & General Counsel referred to Google’s US$ 900 million bid in the following terms:

“one of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services. Google is a relatively young company, and although we have a growing number of patents, many of our competitors have larger portfolios given their longer histories.” (here)

This means that Gogle has failed in obtaining a “formidable patent portfolio” to use against patent infringement claims. As we have seen, among those that will acquire Nortel’s Patent portfolio we find Microsoft who may then have more arguments in its “battle” against Google. Bear in mind that Microsoft filed action against Motorola for the use of Android (here).

More than ever, this Mobile wars seem like a chess game.

Microsoft v i4i just decided

The appeal has been decided today by US Supreme Court. The justices confirm that:

“in asserting patent invalidity as a defense to an infringement action, an alleged infringer must contend with §282 of the Patent Act of 1952 (Act), under which “[a] patent shall be presumed valid” and “[t]he burden of establishing invalidity . . . shall rest on the party asserting” it. Since 1984, the Federal Circuit has read §282 to require a defendant seeking to overcome the presumption to persuade the factfinder of its invalidity defense by clear and convincing evidence”.

Bearing in mind that “Section 282 requires an invalidity defense to be proved by clearand convincing evidence”, “the Court rejects Microsoft’s contention that a defendant need only persuade the jury of a patent invalidity defense by a preponderance of the evidence”.

The justices also reject “Microsoft’s argument that a preponderance standard must at least apply where the evidence before the factfinder was not before the PTO during the examination process”

Reference is also made to the fact that “during the nearly 30 years that the Federal Circuit has interpreted §282 as the Court does today, Congress has often amended §282 and other patent laws, but apparently has never considered any proposal to lower the standard of proof. Indeed, Congress has left the Federal Circuit’s interpretation in place despite ongoing criticism, both from within the Federal Government and without”.

Microsoft Corp. must therefore pay a $290 million to i4i.

US Supreme Court opinion here