Ericsson's knockout bid of €799 million ($1.13 billion) should have ended the squabbling over Nortel’s LTE and CDMA assets, but it has become apparent that the assets sold included only a small number of patents.
Vitally, Nortel has retained ownership of its LTE patents and has only licensed the use of them to Ericsson.
A Nortel lawyer, Tay Tuesday, said that the perception the company was selling its LTE assets to Ericsson was wrong, fed by misinformation in the media, spread in part by RIM.
Of the 5,500 patents owned by Nortel, only 600 have been transferred to Ericsson, claimed Tuesday, with none of the LTE intellectual property having being sold.
Instead, Nortel will be licensing them to Ericsson, claiming it invested around €142 million annually developing LTE technology.
RIM, which failed in its €780 million bid for Nortel's LTE/CDMA business, is reported to have held negotiations over the LTE patents for months in the lead-up to its thwarted offer. Its interest, according to Research Capital analyst Nick Agostino, would be to save on royalty costs of future LTE-based RIM handsets.
“The opportunity is here now for them to own the hopefully material patents, and I think it's also going to be a benefit on the margins.”
Any future auction for Nortel's LTE patents seems sure to increase nationalist feeling over the government's lack of action to save the Canadian technology developer.
Local speculation has RIM marked as being an aggressive bidder for these LTE patents, with pressure being applied on the federal government to support its efforts. Last week, RIM claimed that allowing Nortel's wireless assets to slip into foreign hands constituted a national concern.
However, while waving the Canadian flag might provoke rousing comment, Nokia Siemens Networks, which bid $1.03 billion for the LTE/CDMA business, is likely to remain interested, while the private-equity firm MatlinPatterson could reappear.
For a nationalistic viewpoint on the sale of Nortel's assets read this article in The Star.
For more on this story:
Seeking Alpha and Canada.com
This article originally appeared in FierceWireless: Europe
