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Optical/IP Networks

Nortel Could Sell LTE Patents Separately

Nortel Networks Ltd. executives being grilled by a Canadian parliamentary committee say that the company could sell off its Long Term Evolution (LTE) patents at a later date, amongst other options for the wireless intellectual property rights (IPR).

The $1.13 billion package that Ericsson AB (Nasdaq: ERIC) won at auction includes LTE research-and-development staff and a license to use the pre-4G IPR. But the Ericsson deal doesn't include the patents themselves. Under questioning, Nortel executives said that they are looking at a range of options for the patents and a future sale could be one of the them.

Nortel holds LTE-related patents dating back to 1998 and still retains a "small" R&D staff for the technology, based in Dallas. "They could be part of a subsequent transaction," says Richard Lowe, Nortel's president of carrier networks.

George Riedel, chief strategy officer at Nortel, said Nortel is working with the courts on a "fact-based approach" on what to do with the patents. "Do we keep some or do we sell them all... I don't know the answer yet," he told the committee. [Ed. note: Should it make us suspicious when they announce that NOW they're using facts?]

Nortel has spent around $350 million on developing LTE technology, Lowe told the committee. [Ed. note: Another fact? Hmmm...] The bulk of that spending happened in 2008 and 2009, Lowe said.

Riedel also said that there was a "simple rationale" in not including the patents in the sale of Nortel's wireless assets: The initial bidder for the assets, Nokia Networks , was happy with its own LTE IPR portfolio.

"The original buyer did not value the assets," Riedel explained.

— Dan Jones, Site Editor, Unstrung

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