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Nortel's patent pile sold
Nortel has announced
that it has sold its pile of patents for $4.5 billion. "The
sale includes more than 6,000 patents and patent applications spanning
wireless, wireless 4G, data networking, optical, voice, internet, service
provider, semiconductors and other patents. The extensive patent portfolio
touches nearly every aspect of telecommunications and additional markets as
well, including Internet search and social networking." Google's
attempt to buy these patents failed; they have gone to a consortium made up
of Apple, EMC, Ericsson, Microsoft, Research In Motion, and Sony. It's not
hard to imagine unpleasant things resulting from that.
(Log in to post comments)
Nortel's patent pile sold Posted Jul 1, 2011 14:04 UTC (Fri) by Uraeus (subscriber, #33755) [Link]
This is really worrisome, because the main reason the software patent system hasn't been even more damaging has been due to a situation of 'cold war' between the worlds major companies. But with Microsoft and the other consortium members having taken both the Novell and now Nortel patents out of the picture, their ability to harass and sabotage their remaining competitors with patents is just so much greater. If Google had won it would at least just meant that Google would have been a more equal player in the patent cold war, instead of being on the receiving end.
Nortel's patent pile sold Posted Jul 1, 2011 14:08 UTC (Fri) by kh (subscriber, #19413) [Link]
Don't forget to include the Nokia patents.
Nortel's patent pile sold Posted Jul 1, 2011 14:34 UTC (Fri) by kragilkragil2 (guest, #76172) [Link]
The problem is that the US isn't really good at enabling fair market conditions. With Apple and MS totally domating certain parts of IT they shouldn't be allowed to buy such a patent portfolio. Google should just sue someone or intervene in some way, what do they have to loose?
Nortel's patent pile sold Posted Jul 1, 2011 16:31 UTC (Fri) by drag (subscriber, #31333) [Link]
> The problem is that the US isn't really good at enabling fair market conditions
The major problem is that these patents exist in the first place.
The whole concept of patents and other special monopolistic privileges is extremely anti-capitalistic. It's anti-freedom, anti-markets, and anti-progress.
The whole patent system needs to be dispensed with.
Nortel's patent pile sold Posted Jul 1, 2011 21:51 UTC (Fri) by rgmoore (✭ supporter ✭, #75) [Link] The whole concept of patents and other special monopolistic privileges is extremely anti-capitalistic. It may be contrary to free markets, but it's certainly not contrary to capitalism. Remember that capitalism is about who controls the means of production- a small number of rich people- not about how prices are set. Patents are a key enabler of rentier capitalism, i.e. a few fat cats making money off being in a privileged position in the economy. Unfortunately, more and more of our economy seems to run that way. The whole patent system needs to be dispensed with. I hold out hope it can be fixed. There are certainly areas in which patents are being abused. There are also places where they're being used for their proper purpose, to encourage inventors to disclose their inventions so others can build on them. I want to preserve that original function, so I think eliminating patents completely would be a mistake.
Nortel's patent pile sold Posted Jul 2, 2011 11:09 UTC (Sat) by drag (subscriber, #31333) [Link]
> Remember that capitalism is about who controls the means of production-
Your confused. The customer controls the means of production if the market is a free one. If they don't buy it then it won't get made (or at least won't be made for long). The profits of the capitalist is utterly dependent on fulfilling the needs and the desires of their customers.
This is why open competition is so important. Unless the consumer has the ability to choose between alternate services and goods then the system breaks down. The only way this break down of competition happens in the real world is through government granted privileges.
These patents with the singular purpose to punish and hurt consumers. They are going to be used to force people to pay more for software and hardware then the market price for the software (free) and the hardware.
> Patents are a key enabler of rentier capitalism,
Your thinking of "rent-seeking". This is done through special privileges granted by government and protected by force. Don't get confused with what the republicans or so the so-called 'neocons' want to portray capitalism is. What they really are wanting is a form of soft-fascist system and certainly intellectual property law is part of it.
It's a form of corporatism were large companies collude with government to form protected markets. The RIAA and DMCA is a perfect example of how this works. Things like ACTA are going to make it worse.
What is very bad is that both political parties, which hold a stranglehold on politics in the USA support this sort of stuff whole heartedly. It's completely crooked and corrupt to it's core. Really quite disgusting and there is no political will to fight any of it since both sides heavily benefit from it.
Nortel's patent pile sold Posted Jul 2, 2011 20:46 UTC (Sat) by butlerm (subscriber, #13312) [Link] It may be contrary to free markets, but it's certainly not contrary to capitalism.You are just making things up. Capitalism requires no such thing. In fact, capitalism works the best when shares of capital assets are widely distributed among pensioners, retirees, savers, small businessmen, those saving for retirement, and so on. And in almost every case, patents are the one of the greatest enemies to capitalism and freedom ever devised. Sure it is great for the patent holders, who get to extort royalties for years but at the expense of everyone else. And mostly for the type of ideas that an intelligent sixth grader could come up with by the dozens in a single evening.
Nortel's patent pile sold Posted Jul 4, 2011 6:23 UTC (Mon) by Seegras (subscriber, #20463) [Link]
"It may be contrary to free markets, but it's certainly not contrary to capitalism."
And
"You are just making things up. Capitalism requires no such thing."
Of course capitalism does not require monopolies. But you've probably misread the above statement, He's saying that monopolies (even government-granted ones) are NOT contrary to capitalism. And this is certainly true.
And obviously, most of our societies seem to subscribe to a capitalist model, but certainly not to a free-market one. Otherwise patents, protective customs, country-code schemes (DVD) and subventions would have to be ditched very fast.
Nortel's patent pile sold Posted Jul 6, 2011 23:21 UTC (Wed) by butlerm (subscriber, #13312) [Link]
Monopolies are contrary to capitalism in the sense that they make a market less efficient and less competitive than it would be otherwise. Capitalism can survive monopolies in some cases, but that doesn't make monopolies some sort of capitalist ideal by any means. More like a wart.
Nortel's patent pile sold Posted Jul 1, 2011 16:41 UTC (Fri) by nhasan (guest, #1699) [Link]
I think this purchase is primarily intended to counter the huge Nokia portfolio in the same space. Google et. al. would be added bonus.
Nortel's patent pile sold Posted Jul 1, 2011 17:51 UTC (Fri) by ajross (subscriber, #4563) [Link]
Not sure that argument is really borne out by the facts. Apple is a great example: they "totally dominate" smartphones right now (at least in units shipped by a single vendor). But four years ago they had zero presence. And they got to their position of dominance despite extensive patent portfolios held by all the established players (c.f. RIM, Nokia, MS).
The number two (or number one, depending on how you do the math) platform is Android -- an even more recent arrival by yet another company without an established patent bucket.
I'm not saying the US software patent regime is good, or even working well. I'm just pointing out that they aren't as damaging as you seem to think.
Nortel's patent pile sold Posted Jul 1, 2011 18:47 UTC (Fri) by martinfick (subscriber, #4455) [Link]
Your counter is rather transparently false. You are at best making several huge stretches: there were no established smartphone companies back then! Arguably the first real smartphone was the iphone, anything before was certainly not established! Obviously, Apple was an established computer maker, a smartphone is a computer.
Not to mention that Apple is using patents to thwart innovation by others in the smartphone area. I would suspect that some (many?) of those patents even predate their smartphone era.
Nortel's patent pile sold Posted Jul 2, 2011 22:43 UTC (Sat) by petur (guest, #73362) [Link]
Not sure what you're trying to say here, but the iphone sure wasn't the first smartphone out there... Microsoft had is Windows Mobile platform out years before, and it included web, mail, calendar, gps, games,... And it worked. Sort of.
Nortel's patent pile sold Posted Jul 3, 2011 7:26 UTC (Sun) by nhippi (subscriber, #34640) [Link]
Certainly there were many smartphones before iphone - Windows mobile, symbian, palm, even blackberries existed before. Each and every technical feature of iphone existed before (And was patented). What iphone did was innovated in the user interface. Things like pinch and zoom are now patented by apple.
Things to learn? If you want to break into an existing market - just make a much better user interface.
Nortel's patent pile sold Posted Jul 2, 2011 2:17 UTC (Sat) by jmalcolm (guest, #8876) [Link]
Since Microsoft seems to be rather successfully litigating against Android, I am not sure I see things quite the same as you do.
http://www.theregister.co.uk/2011/06/30/microsoft_signs_m...
I think Microsoft makes more money off Android than they do off Windows Phone 7.
Nortel's patent pile sold Posted Jul 2, 2011 7:34 UTC (Sat) by NAR (subscriber, #1313) [Link]
Why do you think these are going to be used against Google? As far as I know, Nortel was an equipment-maker, not a handset maker, so I'd guess most patents are relevant in the network business. In that market the competitor is not Google, but Chinese manufacturers...
Nortel's patent pile sold Posted Jul 3, 2011 13:24 UTC (Sun) by rsidd (subscriber, #2582) [Link] In that market the competitor is not Google, but Chinese manufacturers... ...who use Android. Anyway, even if you're right, the major market for the Chinese manufacturers is China, India and other developing countries -- not the US. Good luck enforcing those patents, then.
Nortel's patent pile sold Posted Jul 4, 2011 11:30 UTC (Mon) by NAR (subscriber, #1313) [Link]
I'm not talking about user devices. I'm talking about network equipment: base stations, network controllers, media gateways, telephony exchanges, etc. This was the business of Nortel, so I'd guess most of their patents are applicable in this area. And Chinese manufacturers are already building networks in Europe.
$750,000 per patent Posted Jul 1, 2011 14:38 UTC (Fri) by scripter (subscriber, #2654) [Link]
If I've done my math correctly, that averages out to $750,000 per patent. That's astounding, especially considering that patents don't last more than 20 years. I assume that these companies believe the patents are worth more than that.
$750,000 per patent Posted Jul 1, 2011 15:22 UTC (Fri) by rgmoore (✭ supporter ✭, #75) [Link] It's not that unreasonable. Remember that patent value is going to follow something like a power law. Of those 6000 patents, the vast majority are probably worth less than the cost of filing. There will be a few that are moderately valuable, and almost all the value will come from a few key patents on critical technology that the other companies can't easily engineer around. It just sounds better to talk about selling 6000 patents than saying they sold 10 or 20 patents and threw in another 5990 for free.
$750,000 per patent Posted Jul 1, 2011 18:26 UTC (Fri) by smoogen (subscriber, #97) [Link]
Well in some ways patents do last more than 20 years.. if you use those patents to base other patents on. That means in some ways one can keep something locked up for years by modifying it slightly.
At this point the patent system isn't going to be fixed until someone loses a LOT of money somewhere and then spends an equally large amount of money to "influence" enough politicians for constitutional amendments or new congressional rules.
$750,000 per patent Posted Jul 1, 2011 20:13 UTC (Fri) by MisterIO (guest, #36192) [Link]
What about instead the possibility that at some point some politicians will stop being thieves and start thinking about doing the _right_ thing?! I know it won't happen, but it would help to at least consider that possibility, so that we can judge them guilty of not doing it, instead of automatically thinking that it's normal.
$750,000 per patent Posted Jul 2, 2011 12:02 UTC (Sat) by nlucas (subscriber, #33793) [Link]
This was tried before by Microsoft, when they were the new kid on the block, and were constantly harassed by patents claims (some won, many settled).
At some point they just quit and joined the party, but Bill Gates was a patent system critic in it's early times.
That seems to be the way any company takes. They start by trying to beat the system and end being a part, because it makes them loose too much money (and they have to justify those losses to their shareholders).
Nortel's patent pile sold Posted Jul 1, 2011 16:54 UTC (Fri) by wazoox (subscriber, #69624) [Link]
The most unfortunate part : this is both striking evidence that the US patent system is gone mad and is terminally ill on one hand; on the other hand with such mind-boggling amounts of money at stake, it is also guaranteed to stay so for the foreseeable future. This is really, really terrible.
Nortel's patent pile sold Posted Jul 1, 2011 19:23 UTC (Fri) by hannada (subscriber, #4633) [Link]
What is the legal distinction in this case between a "consortium" and a "cartel"? Do these six corporations have anything in common other than their desire to profit as a self-selected group at the expense of all other companies?
Any other kind of merger or joint venture by a group of major corporations such as this might be expected to attract some anti-trust scrutiny. Does that general principle apply to a patent cartel?
Nortel's patent pile sold Posted Jul 1, 2011 21:44 UTC (Fri) by pboddie (subscriber, #50784) [Link] Do these six corporations have anything in common other than their desire to profit as a self-selected group at the expense of all other companies? Well, how much tax do they pay? It might turn out that the other thing they have in common is that not only do they profit from government-sanctioned monopolies, but they don't even pay for the upkeep of the government and its bureaucracy. That's right: the taxpayer pays for their privilege!
Nortel's patent pile sold Posted Jul 2, 2011 10:05 UTC (Sat) by elanthis (guest, #6227) [Link]
IANAA (not an accountant), but i believe business taxes are a huge source of tax income. The vast majority of taxable income the working man makes has already been taxed for the business... At a higher tax rate.
Business taxes Posted Jul 2, 2011 14:05 UTC (Sat) by corbet (editor, #1) [Link] I'm not an accountant either, but I am a business owner. The "working man" gets a salary which comes from pre-tax money for the business; salaries are expenses, after all. You may be thinking of dividends, which are paid from post-tax money, but few companies pay dividends anymore.Things vary a lot, but, in the US, companies are very good at paying little or no taxes.
Business taxes Posted Jul 2, 2011 16:24 UTC (Sat) by pboddie (subscriber, #50784) [Link]
I don't know the figures, but I wouldn't be so certain that few (public) companies pay dividends, at least not on a global level. I know of some highly profitable European companies paying a dividend twice a year.
That said, not paying a dividend might be another thing those six companies have in common. Certainly, Apple, like Microsoft before them, has been criticised for not paying a dividend.
Business taxes Posted Jul 3, 2011 20:12 UTC (Sun) by elanthis (guest, #6227) [Link]
You're definitely right. I only pay independent contractors and not regular employees, so I wasn't sure how it worked out in the "usual" case. My mistake for assuming.
I did find this chart:
http://www.taxpolicycenter.org/briefing-book/background/n...
It seems to be that basic corporate taxes plus payroll taxes do ever so slightly outweigh individual income tax. I'm not sure what "payroll taxes" are though. I think those are the "withheld from your check" taxes, but could be wrong. So I'm still not sure if that's really something to consider as a corporate tax or a personal tax.
Business taxes Posted Jul 5, 2011 11:24 UTC (Tue) by Wol (guest, #4433) [Link]
No. I think you'll find payroll taxes are taxes on the employer based on what they pay employees.
For example, we have National Insurance, which is deducted from the employee's pay cheque at about 10%. However, the employer has to pay a further 12% or so on top.
Cheers,
Nortel's patent pile sold Posted Jul 2, 2011 22:41 UTC (Sat) by ccurtis (guest, #49713) [Link] One of the most annoying things to me recently were all the people who've never heard of a 1096 or K-1 complaining that raising tax rates on income over $250,000 was going to kill small businesses - apparently defined as those incorporated with subchapter S elections. The two easiest ways for these "individuals" to avoid the higher tax rates would be to (a) hire someone, or (b) perform capital expenditures (ie: buy stuff, which is somehow ~70% GDP). But all that aside, in case you have access to the Internet, you can click here to find out where the feds get their income: [Tax Policy Center]. If you prefer numbers in the raw (and more up to date) the IRS publishes the data directly as well: [IRS Tax Stats] But if you don't have Internet access, as to the "huge source" of income, that's all relative I suppose. But in broad strokes corporations provide about 12% of revenues, and individuals provide another 45-81% (depending on who you want to say pays for things like medicare and social security).
Nortel's patent pile sold Posted Jul 2, 2011 20:57 UTC (Sat) by butlerm (subscriber, #13312) [Link] What is the legal distinction in this case between a "consortium" and a "cartel"?A consortium is just a group of companies who cooperate on something (usually industry standards) in their common interest. A cartel is a group of companies who conspire to fix prices, terms, and production levels. OPEC is the classic contemporary example of the latter. Every patent holder has a government granted monopoly of inevitably dubious merit, but a group of patent holders probably isn't a cartel unless they conspire to license separately held patents together or at specified prices. The common way to do the latter, of course, is to set up a third company for that purpose - MPEG-LA, for example. I wouldn't know how to distinguish MPEG-LA from any other cartel, but I suppose there might be some sort of distinction.
Nortel's patent pile sold Posted Jul 4, 2011 14:19 UTC (Mon) by pboddie (subscriber, #50784) [Link] Every patent holder has a government granted monopoly of inevitably dubious merit, but a group of patent holders probably isn't a cartel unless they conspire to license separately held patents together or at specified prices. Yes, but here the group of companies involved actually bid collectively, and I doubt that they're going to parcel out the patents and then cross-license the whole lot. When you have supposed competitors colluding in this way, regulators shouldn't be looking the other way.
Nortel's patent pile sold Posted Jul 6, 2011 23:27 UTC (Wed) by butlerm (subscriber, #13312) [Link]
I agree. However, patents are anti-competitive by nature. It is as if Congress sat down and said how do we best come up with something contrary to the spirit of anti-trust? And they invented the patent system.
Whether a group of big companies holds lots of government granted monopolies or a group of little companies hold lots of government granted monopolies doesn't really make much of a difference. Patents are anti-competitive either way.
Nortel's patent pile sold Posted Jul 3, 2011 13:12 UTC (Sun) by davide.del.vento (guest, #59196) [Link]
A more insightful article on this bidding:
http://www.reuters.com/article/2011/07/02/us-dealtalk-nor...
RIM? (was Nortel's patent pile sold) Posted Jul 4, 2011 17:46 UTC (Mon) by dskoll (subscriber, #1630) [Link] Rumours are swirling that RIM is ripe for acquisition. It has a market capitalization of $14.5B though, so I guess Google can't buy RIM as a back-door way to access the patents unless RIM's stock tanks...
Patents have irrational value. Posted Jul 4, 2011 19:38 UTC (Mon) by tdwebste (guest, #18154) [Link]
All these bids are irrational numbers.
I think the message is clear. Patents have irrational value.
Just a playful observation
Patents have irrational value. Posted Jul 5, 2011 9:02 UTC (Tue) by Seegras (subscriber, #20463) [Link]
Yep, patents on math, and they bid mathematical constants for them..
Nortel's patent pile sold Posted Jul 5, 2011 3:01 UTC (Tue) by Hausvib6 (guest, #70606) [Link]
This is a big win for capitalism where money can buy anything, including government granted monopoly in something, which can be used to stifle competition and in the end reducing cost by reducing the need to innovate. Yay~!
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