U.S. Probes Bidding for Nortel Patents
By THOMAS CATAN
WASHINGTON—The Justice Department is scrutinizing likely bidders for a giant trove of patents being sold this month by the bankrupt Canadian telecom-equipment maker Nortel Networks Corp. amid concerns the patents could be used to unfairly hobble competitors in the wireless industry, according to people familiar with the matter.
The department's antitrust division has been reviewing Google's Inc.'s $900 million opening bid, although it hasn't found any major competitive issues that would lead it to challenge its purchase of the patent portfolio, the people said.
The agency has greater concerns about another possible bidder, Apple Inc., which has often asserted intellectual property rights against other companies. Apple has been in talks with the Justice Department to address its concerns, those people said.
Apple didn't respond to a request for comment. A spokesman for Google declined to comment.
The trove contains some 6,000 patents spanning key portions of the modern tech world, including wireless video, Wi-Fi, Internet search, social networking and the fourth-generation mobile data technology being adopted by many carriers, known as LTE.
The unusual sale of such valuable assets has sent ripples through the tech industry and stirred worries at the Justice Department and elsewhere that the patent could be misused by companies to stifle innovations developed by rivals or demand high-tech ransom payments.
"You're acquiring a stockpile of nuclear weapons as far as patents go," said Alexander Poltorak, chief executive of General Patent Corp., which isn't advising any of the parties in the Nortel auction being held on June 20.
Others said to be interested in bidding include BlackBerry device maker Research In Motion Ltd., and several patent-licensing firms. RIM didn't immediately respond to a request for comment.
The inquiry is the latest sign of heightened interest at the Justice Department's antitrust division into whether intellectual property rights, which include patents, trademarks and copyrights, are being used too broadly to stifle competition and innovation in high-tech industries.
