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Apple Contributing $2.6 Billion Toward Nortel Patent Purchase

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Earlier this month, an Apple-led consortium beat out Google in an auction of thousands of patents from bankrupt Nortel, bidding $4.5 billion for the entire package of patents. As noted by @SammyWalrusIV (via Business Insider), Apple 10-Q quarterly report filed with the U.S. Securities and Exchange Commission revealed that Apple's contribution to that effort totaled $2.6 billion.

On June 27, 2011, the Company, as part of a consortium, participated in the acquisition of Nortel's patent portfolio for an overall purchase price of $4.5 billion, of which the Company's contribution will be approximately $2.6 billion. This asset acquisition is subject to approval by various regulatory agencies.

Apple's partners in the deal included EMC, Ericsson, Microsoft, Research in Motion, and Sony. Apple's $2.6 billion contribution represents 58% of the entire purchase price of the Nortel patent portfolio. The large number may add credence to the rumor to have paid $2 billion for "outright ownership" of Nortel's LTE (4G) patent technology.

And Apple may not be finished with its efforts to purchase intellectual property on the open market, as the company is said to be considering going up against Google again for a portfolio of 1,300 patents related to mobile phone technologies being offered by InterDigital.

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Top Rated Comments

198 months ago
Begun, this patent war has.
Score: 3 Votes (Like | Disagree)
*LTD* Avatar
198 months ago
Apple basically bought everyone's drinks. Nice.
Score: 3 Votes (Like | Disagree)
198 months ago
they will make that back in law suits :)
Score: 2 Votes (Like | Disagree)
GLS Avatar
198 months ago

So thank you, Apple, for doing your part to abuse the already broken system. We really appreciate it. Ugh.

So what was Apple's alternative? To allow Google to get the patents, and do their part to abuse the already broken system?
Score: 1 Votes (Like | Disagree)
arcite Avatar
198 months ago
Kodak is also floating their patent portfolio. Sounds like a way to monetize them while retaining use of them and losing the unpredictable expense of litigating them. I wonder if Apple has enough money from THIS month's net to pay for them, cash. :D

BTW the more recent 10-Q is out which further details their self-financing and expansion efforts. Their entire new HQ project is covered by 1/8 of one fiscal quarter net income after taxes.

They pay over $2.5B per quarter in federal income taxes.

Rocketman

http://investor.apple.com/common/download/download.cfm?companyid=AAPL&fileid=484701&filekey=6542e771-f256-4829-8135-0b1d88c7c2b2&filename=AAPL%20Q3FY11%2010Q%2007.20.11.pdf

June 25, 2011 September 25, 2010
Cash, cash equivalents and marketable securities $ 76,156 $ 51,011
Accounts receivable, net $ 6,102 $ 5,510
Inventory $ 889 $ 1,051
Working capital $ 20,039 $ 20,956

Burn rate?
Cost of sales 16,649
figures in millions

Gotta love it how in 10 short years Apple has become the 10,000 ton Gorilla of the tech world. :eek: :D
Score: 1 Votes (Like | Disagree)
Popeye206 Avatar
198 months ago
Talked with a local high-tech patent lawyer the other night at a local event and he thinks what we're seeing is a shake out in the high-tech patents. His feeling is the method has become "implement someones IP" and then see if they try and protect it. Then hope in court you can dilute or dismiss their claims or obtain a reasonable cross license.

It does seem that protecting your IP and keeping others from implementing it is almost impossible these days. It will be interesting to see what happens.
Score: 1 Votes (Like | Disagree)