Antitrust Concerns Raised Over Rockstar's Purchase of Nortel's Patent Portfolio

Strategic Insights -

The American Antitrust Institute (AAI) has expressed concerns over the proposed $4.5 billion purchase of Nortel's portfolio of over 6,000 patents and patent applications by Rockstar Bidco LP, a consortium consisting of Apple, Microsoft, Research in Motion, EMC, Sony, and Ericsson. The AAI believes that the collective control of this patent portfolio could enable and incentivize the consortium members to enforce patents to suppress mobile device competition and open source competition. The AAI is urging the Department of Justice to commence an in-depth investigation into the proposed transaction and to advise the U.S. and Canadian bankruptcy courts prior to their joint hearing next Monday.

Key Takeaways:

  • The AAI has expressed concerns over the proposed $4.5 billion purchase of Nortel's patent portfolio by Rockstar Bidco LP, a consortium consisting of Apple, Microsoft, Research in Motion, EMC, Sony, and Ericsson.
  • The AAI believes that the collective control of the patent portfolio could enable and incentivize the consortium members to enforce patents to suppress mobile device competition and open source competition.
  • The consortium membership includes three leading mobile device operating system competitors, and already possesses a large portfolio of wireless technology patents.
  • The AAI questions why any horizontal collaboration among them with regard to the Nortel portfolio should be allowed.
  • AAI President Bert Foer stated, "It would be a grave mistake for the Department to permit the bankruptcy court proceeding to approve the Rockstar-Nortel transaction next Monday without appreciation of the serious potential for anticompetitive effects and consequent need for an in-depth investigation."
  • The AAI is urging the Department of Justice to commence an in-depth investigation into the proposed transaction and to advise the U.S. and Canadian bankruptcy courts prior to their joint hearing next Monday.

Statistics:

  • $4.5 billion: The price paid by Rockstar Bidco LP for Nortel's patent portfolio.
  • 6,000: The number of patents and patent applications in Nortel's portfolio.
  • 5 times: The amount of Rockstar's purchase price compared to Google's previous offer.
  • 3: The number of leading mobile device operating system competitors among the consortium members.
  • 1: The number of leading mobile operating system competitor that does not possess a large portfolio of wireless technology patents.

Sources:

  • American Antitrust Institute (AAI). (2023, July 06). AAI Urges DOJ to Investigate Rockstar's Purchase of Nortel's Patent Portfolio.

+ Retrieved from Washington, D.C.

+ Full citation not provided.