RPX could lead syndicate to bid on Nortel patents, says attorney at the firm 03 May 11
RPX has stated that it could enter the bidding for the Nortel patent portfolio. An attorney at the defensive patent aggregation firm, which is due to start trading its shares on NASDAQ tomorrow, is reported to have said that it has put together a consortium of companies that may get involved in an auction, scheduled to take place in New York on 20th June. So far, Google is the only confirmed bidder, though now that Nortel's administrators have been given permission to hold the sale, more are likely to emerge. There are no further details anywhere about RPX's plans as far as I can see, but if a consortium does exist it must surely have been put together separate from the firm's standard offering. According to its S1 filing of earlier this year:
Upon initial subscription, to the extent that we are contractually able, clients receive a term license for the period of their membership to, and a release from all prior damages associated with, patent assets in our portfolio. Clients also receive a limited right to purchase certain of our patent assets for defensive purposes in the event of a patent infringement suit brought against a client by a third party. In addition, clients receive term licenses to substantially all of the patent assets we acquire during the period of their membership. Our subscription agreements also include a vesting provision that converts a client’s term licenses into perpetual licenses if the company remains an RPX client after the specified vesting period and thereafter, on a rolling basis.
In cases where RPX is not pursuing an acquisition using subscription fees, our clients may still request our assistance. In these instances, RPX structures syndicated acquisitions on behalf of clients, with the same objective of efficiently sharing resources and collectively reducing litigation risk, just on a larger scale. Transactions of this complexity require the collective resources of a large client network and benefit from the substantial deal experience and market insights that RPX provides.
On another note, I wonder what kind of fees RPX would get for putting together a syndicate and then successfully bidding for a $1 billion portfolio. Even 1% of the purchase amount would be a very handy $10 million or so. Move up to 5%, let alone 10%, and it gets very interesting indeed.
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