War of Tech Giants Unfolds With Multi-Billion Dollar Patent Auction

[This is the second story in a two-part series on Silicon Valley's emerging patent war]

The auction of several thousand Nortel patents in June for $4.5 billion to an Apple-led consortium that included Microsoft, RIM, Ericsson, EMC, and Sony—aka “Rockstar Bidco”— may have profound consequences for companies that never bid a nickel. 

The Financial Times, heralding the “Great Patent Bubble of 2011,” cited new pressures on public companies, including Motorola Mobility, Eastman Kodak, VirnetX, and InterDigital, to take a fresh look at selling off patents.

In addition, the Nortel auction has fundamentally altered the expectations of private companies and individuals that own patents.  Reaching out of the coffin of bankruptcy, Nortel’s not-quite-dead hand appears to have dramatically shaken up the intellectual property (IP) marketplace.  

Public Markets Place Premiums on Patents

News of the Nortel auction’s June 30^th outcome and of Google’s continuing efforts to acquire patents from other companies magnified InterDigital’s market capitalization immediately.  Its stock rose by...

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