RIM Said Weighing Bid to Top Google Offer for Nortel Patents
Research In Motion Ltd. (RIMM) is considering a bid for Nortel Networks Corp. (NRTLQ)'s portfolio of wireless technology patents that would top Google Inc. (GOOG)'s $900 million offer, two people familiar with the plans said.
Context & Ripple Effects
Nortel's wireless patent trove has been drawing suitors since Apple was reported circling the assets in December 2010, and Google's confirmed $900 million offer set the number to beat. RIM's reported deliberation puts the company with the most painful recent memory of patent exposure — its years-long dispute with NTP — into an auction for defensive ammunition of exactly the kind it lacked then.
The timing matters because RIM's product position is eroding: it fell out of the top five phone makers in late 2010 as ZTE took the No. 4 slot, and its PlayBook plan to run Android apps is effectively a concession that its own ecosystem cannot fill the 'lots of apps' box alone. A patent stockpile addresses a different vulnerability — legal exposure rather than app catalogues — which no QNX superphone launch fixes.
First-order effects
- A RIM bid above $900 million turns a Google walkover into a live auction, raising the floor for Nortel's creditors on every round that follows.
- For RIM itself, the portfolio functions as a shield against the kind of royalty claims that once hobbled it — ownership, not licensing, becomes the hedge.
Second-order effects
- With Apple previously reported interested, any RIM–Google duel risks widening into a multi-bidder or consortium contest, pushing up prices across comparable wireless patent sales.
- Android device makers face a sharper version of the same dependency RIM just acknowledged with PlayBook Android support: whichever rival holds these patents gains leverage over the ecosystem they all build on.
Third-order effects
- Bankruptcy estates monetizing IP through open bidding among platform owners sets patent values by strategic scarcity rather than licensing income — meaning a collapsed equipment maker's research legacy can fetch more at auction than its products ever did.
- If the pattern holds, defensive patent accumulation becomes a standing balance-sheet priority for hardware makers whose market share is fading, decoupling IP value from product momentum.
The trend: Wireless patents from collapsed telecom equipment makers are being repriced as strategic weapons in the smartphone platform war, with device makers bidding defensively rather than licensing conventionally.