Telecom equipment maker Nortel Networks Corporation, Canada, has announced that its principal operating subsidiary Nortel Networks Limited and certain of its other subsidiaries have entered into a stalking horse asset sale agreement with Google, Inc., US. The deal - which also includes Nortel Networks, Inc. and Nortel Networks UK Ltd. (in administration) - is for the sale of all of Nortel's remaining patents and patent applications for a cash purchase price of $900 million.
The agreement includes the planned sale of about 6,000 patents and patent applications spanning wireless, wireless 4G, data networking, optical, voice, Internet, service provider, semiconductors and other patent portfolios. The extensive patent portfolio touches nearly every aspect of telecommunications and additional markets as well, including Internet search and social networking.
The deal follows a confidential, multi-round bidding process involving several interested companies and consortia from around the world. It is seen as part of Google's strategy to defend itself against patent litigation. The bid would be the third-largest purchase by Google, smaller only than its payments for YouTube and DoubleClick.
While Google could potentially use some of the technology in the Nortel patents in future research, the company has said that it wanted to buy Nortel to defend against patent litigation.
There are dozens of patent lawsuits reportedly being fought by Google. These include one from Microsoft co-founder, Paul G. Allen, who has sued Google and 10 other companies for infringement. Also, Oracle has sued Google for patent infringement related to Java software used on the Android mobile device platform.
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