Canadians drop Nortel probe as InterDigital considers its own patent sale 20 Jul 11
Another potential obstacle in the way of the transfer of patents from Nortel to the six-company Rockstar Bidco consortium which successfully bid $4.5 billion for the bankrupt company’s portfolio in late June has now disappeared. This follows an announcement from the Canadian government that it will not seek to review the sale under the terms of the Investment Canada Act. "Based on the information provided by the investor and Nortel's 2010 audited financial statements, the acquisition of the Nortel patents is not subject to review for net benefit under the act," said industry minister Christian Paradis yesterday.
A fortnight ago the minister had referred the transaction to officials to see whether the act, which allows for the investigation of any sale of Canadian assets to foreign parties in excess of $312 million, was applicable. At the time it looked little more than a gesture and that is what it has turned out to be. On 11th July, the sale was also given the all-clear by bankruptcy courts in both the US and Canada, so now the only obstacle to its final completion looks to be a legal challenge from one of the other parties involved in the auction or perhaps a challenge from Nortel shareholders, though this seems unlikely. That said, it has been reported that anti-trust officials in the US are looking into the purchase and it is possible that could turn into something problematic for Rockstar - even though it was given clearance to bid prior to the auction.
In a sign that the Nortel auction has caught the attention of boardrooms, it was also announced yesterday that InterDigital – the wireless technology company – is considering the sale of some or all of its IP assets. The board of directors, said a press release, “has initiated a process to explore and evaluate potential strategic alternatives for the company, which may include a sale or other transaction.” Terry Clontz, the company’s chairman is quoted as saying: “Over the past year we have seen the value of intellectual property rise substantially as major players in the mobile industry increasingly understand the strategic and economic value of this type of asset. As a result, the Board believes it is an appropriate time to explore potential strategic options that may enhance shareholder value."
Given the space that InterDigital is in, given the amount the Nortel auction raised and given the ongoing patent battles centred on smartphone and mobile telephony, Clontz is absolutely right; though, of course, exploring is not the same as actually doing.
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