Looks like the wireless world titans are about to go to Defcon 1.
Today's Wall Street Journal "Ericsson Wins Nortel Auction" reports that "Telfon AB L.M. Ericsson will pay $1.13 billion to acquire the most profitable piece of Nortel Networks Corp. after winning an auction for the assets late Friday."
WSJ notes that Ericsson got the Nortel CDMA business and "a group of 400 resarchers working on high-end broadband technology." What is missing from this reporting is that the asset the bidders wanted was the Nortel patent portfolio and their smart people. Depending on who you believe the Nortel patent portfolio has between 6,000 and 7,000 patents covering networking, telephony, and wireless technology. Ericsson has tens of thousands of its own patents including a significant number of software patents.
Research in Motion was excluded from bidding. RIM had less than 1,000 patents with 450 issuing in the last year but apparently is shopping as well. RIM picked up the three speech/voice patents from the Multimedia Patent Trust in February. Now the subject of a prior art bounty. Everyone in the wireless space knows you better have a good patent portfolio.
The prize in the Nortel auction was the patent portfolio. The market for intangible assets and patents and the human capital to create new patents in particular continues to expand. Having an arsenal of patents is a key defensive and competitive weapon. Having smart people who invent stuff is the icing on the cake.
Nokia has its own patent factory (and a book letting everyone know how they manage their IP pipeline). Nokia and Intel have announced plans for a next generation phone. Intel and Nokia are aiming for the unbiquitous internet connectivity space and a whole new class of mobile devices. Intel has been aggressively shopping for technology.
Apple and RIM are duking it out in the smart phone market space, Apple has its own considerable portfolio and is careful to license the technology it doesn't own. I wonder if anyone was paying attention when Apple was one of the early players to license the Amazon One-Click Patent 5,960,411? It was pre-ITunes store.
Motorola and RIM are engaged in their own invalidity, infringement, and re-examination actions. Intellectual Ventures recently entered into a strategic relationship with Telecordia acquiring the rights to license approximately 500 Telecordia patents. Telecordia also has a lot of very smart people inventing interesting technology in the telecommunications space.
Patents and 400 smart people is a very good prize for Ericsson. The rest is window dressing, revenue generating, profitable but window dressing. We suspect the technologists, the executives, and the armies of IP lawyers and experts are mobilizing for battle exchanging key strategy on their smart phones. Stay tuned.