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Financial

Upsetting Apple's IPR Cart

1:25 PM -- As Apple Inc. (Nasdaq: AAPL) kicks off its annual Worldwide Developers Conference 2011 in San Francisco on Monday, the gadget giant is also on the agenda in Washington, as the U.S. Department of Justice looks into the potential bidders for Nortel Networks Ltd. 's patent portfolio, according to a report in The Wall Street Journal. (See What's in Apple's iCloud?)

According to the article, the DoJ is reviewing all the likely bidders for the bankrupt Canadian vendor's portfolio of 6,000 patents, which are being sold off in an asset auction later this month. The auction procedure for Nortel's last remaining assets started in April when Google (Nasdaq: GOOG) emerged as the stalking-horse bidder with its $900 million cash bid for the patents. (See Google Bids $900M for Nortel's Patents.)

So far, the DoJ reportedly doesn't see any competitive problems arising from Google acquiring these assets, but it is more concerned about Apple. Apple hasn't confirmed that it is actually bidding, but it is considered to be one of the many companies that are interested in these assets. (See Rumor: Apple, Google Eye Nortel Patents .)

The DoJ's interest shows a growing worry over how patent disputes can thwart innovation and competition. And "concerns" at the DoJ might eventually put a damper on Apple's desire for Nortel's patents, if they do indeed plan to challenge Google's bid in the upcoming auction.

Google made it clear when it announced its stalking-horse bid that it wanted these patents to defend itself and its partners -- for example, the makers of open-source Android-based phones -- from being sued. The search giant's patent position is not as strong as its competitors'.

But Apple isn't likely to be the only challenger to Google's bid. Other companies that are interested include Ericsson AB (Nasdaq: ERIC), BlackBerry and patent firm RPX Corp. . The portfolio is broad in terms of the technologies that it spans -- 4G, wireless, optical, voice, data networking and semiconductors -- and presumably so will be the interest from other bidders.

So really, the question is: Who wants Nortel's patent portfolio more than Google and has pockets deep enough to spend more than $1 billion to get them? And then, if the DoJ still has concerns, what will they do about it? (See Euronews: Ericsson Eyes Nortel Patents, RIM May Also Bid for Nortel Patents and Patent Firm Wants In on Nortel Auction.)

For our coverage of Nortel's patent portfolio, check out these stories:

— Michelle Donegan, European Editor, Light Reading Mobile

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