Nortel Patent Sale Gets DoJ Review 109
gavron writes "The US Department of Justice will review the Nortel patent sale to the entity formed by Apple, Microsoft, and others. This is the same sale that the Canadian authorities declined to review because the $4B+ deal was valued by them at less than $328M. According to a (paywalled) Wall Street Journal report, 'The Justice Department wants to know whether [the consortium] intends to use them defensively to deter patent lawsuits against its members, or offensively against rivals.'"
Value... (Score:1, Insightful)
$328M = $4B+ ? Ain't Conservative math and fiscal responsibility wonderful?
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Value is whatever someone will pay in the free market. As such, it's often quite subjective.
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It's not a meme, its economics.
From Wikipedia:
Fair market value (FMV) is an estimate of the market value of a property, based on what a knowledgeable, willing, and unpressured buyer would probably pay to a knowledgeable, willing, and unpressured seller in the market.
If someone is willing to pay a given price - that is its market value. Whether the purchaser has determined the price rationally (as in dot-com valuations) is another matter for argument.
Unfortunately, market distortions like speculat
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"knowledgeable, willing and unpressured"
these patents were sold at auction. the consortium was formed to beat google's bid (they flippantly bid a few physical constants - certainly not a considered bid of what they thought the patents were worth, but a bid-as-a-statement). that sounds like reluctant, pressured and not all that knowledgeable to me.
thus the free market ideal is absent, yet again. almost like it will never, and can never work in the real world.
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FMV != V. In fact, that is why there are two more letters in front of that first part!
And you are more than welcome to not pay market price if you do not feel that it is reflective of a particular item or services value or intrinsic value. Given market distortions, that may not be possible or you could be waiting awhile.
Value investing involves the belief that you should not pay more than a stock's intrinsic value (or at least not many multiples of it). Pulbic companies present their financial information for this reason. You can either make an actual assessment of what something is worth
Re:Value... (Score:5, Funny)
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I think it was because Nortel valued them at $328M, so even though MicroApple bid $4B, Canada thought they were worth $328M.
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If Nortel had booked them as a $4B asset, would they have had to go into bankruptcy in the first place?
It would have made their balance sheet look a whole lot better, but it unlikely that they could have revalued intangibles upwards without a firm plan to dispose of them. (In reality - the patents were a large portion of the company's worth, the result of all the past R&D - selling the patents was the end of the company's cash generating assets.)
I don't know they nitty-gritty accounting details around Nortel, but as is usually the case, I'm guessing poor cash flow and eventual insolvency is what final
Duh (Score:1)
This was is so obvious that even the DOJ couldn't ignore it...
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If this goes anything like the last time Microsoft was in front of the DoJ then they'll be found guilty under this president and then pardoned under the next one.
OK, so it's more than Microsoft this time...
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You're thinking of trademark law. For a trademark to remain valuable, it must be actively defended.
The big picture? (Score:1)
So if they say it's defensive (Score:2)
Libertarians still here (Score:5, Insightful)
There are still libertarians here, they are just rarer and drowned out by the noisier people with ideals and no common sense or understanding of how humans work.
Re:Libertarians still here (Score:5, Funny)
There are still libertarians here, they are just rarer and drowned out by the noisier people with ideals and no common sense or understanding of how humans work.
You mean the libertarians?
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I think they meant the people like you.
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No society in recorded history has ever functioned on libertarian principles. The closest was the USA, and in under a century it tore itself apart in a brutal civil war brought on in no small part by the inadequacies of its central government.
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Wait, what? (Score:1)
There are still libertarians here, they are just rarer and drowned out by the noisier people with ideals and no common sense or understanding of how humans work.
There's a difference?
(ducks and dons asbestos gear)
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+1 smug and ideological bullshit.
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This entity created by Apple, Microsoft etc sounds like a patent troll to me. I am a libertarian myself.
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And then change their mind later, what then?
Then they'll be required to pay the additional bribe money for blatant anti-competition and won't get the earlybird discount.
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apparently best defense is attack anyways.
"defensive" use would be blocking competitors from entering market, of course.
the state of technology manufacturing is ridiculous now, it's much worse than in medieval times with vatican saying what's ok and what's not. sure, everyone has the information how to do and manufacture very, very advanced things. but you can't, because of patents, the new global state religion. same applies to copyright.
even if both of those were thrown into garbage bin, people would stil
So one intent is better than another? (Score:5, Interesting)
How are either offensive or defensive patents better than the other really? They both make a joke of the patent system. The question should be: do they intend to use them to innovate or not? Isn't that the reason we have patents?
Buying defensive patents is, IMHO, worse than buying submarine patents and suing someone. I mean business-wise. You are spending millions to buy something that will not even help you make money or be more profitable. Use that to do R&D and innovate. Don't they have shareholders? At least patent trolls have a clear business plan...
This is the (corporate) cold war all over again: My arsenal is bigger than yours!
At least there's a silver lining there if we get to the state of Mutually Assured Destruction: they will stop attacking each others with patents and we will move on with our lives. Or so we can hope...
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At least there's a silver lining there if we get to the state of Mutually Assured Destruction: they will stop attacking each others with patents and we will move on with our lives. Or so we can hope...
Your hope is empty. You can't sue a troll as the troll has no products to infringe on your "defensive" patents.
Also "barrier to entry". Whilst MAD may prevent the likes of Google and Microsoft from suing each other, it won't stop them from suing new startup companies who haven't got defensive patents (no cash to burn on frivolous bullshit). Yay for the tool which "encourages science and the useful arts" forming an anti-innovation death wall against new competitors.
Captcha: unsolved. Poignant.
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No, if they get to the state of Mutually Assured Destruction, then the (non-Military) Industrial Complexes of both sides will heavily tax us all to keep up the parity.
These are fricking lawyers we are talking about, after all. All a lawyer really is is a private-sector politician.
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And spending money to secure your computers is silly too right? You are spending money to buy something that will not even help you make money or be more profitable... Worked well for Sony after all.
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Actually, the answer to the question is "YES!"
Let's imagine that you had a pretty secure operating system, to start with. And, that you employed "best practices" in deployment and operation of that operating system. Further, you employ "best practices" in your networking design, and in the operation of that network. We'll go one step further, and actually educate the users about the dangers of phishing, spearphishing, and the dangers of running untrusted executables, while at the same time setting and en
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But you're spending money on educating those users, which is money that isn't helping you make money or to be more profitable.
Hiring the more expensive sysadmin instead of the kid just out of high school to run those uniz machines is also spending money which isn't helping you make money or to be more profitable. Same with the programmers. Sure, sure the cheap ones will screw up and somebody might hack in and steal hundreds of millions of credit cards numbers, names, and addresses; then again the more expen
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It's not silly, but then again you just don't BUY computer security (especially at $4B+), you spend resources to implement and develop it. You can follow that spending, compare it to profit, take decision (like decrease funding) and audit the effectiveness. You are able to put a "value" on it. There are profit centers in business, but also cost centers (regulations, security, support, etc.) so this isn't new.
You cannot manage $4B+ of defensive patents. You put that in your spending column, and then they'll
Re:So one intent is better than another? (Score:4)
Yes, everyone agrees that the patent system as it currently exists is insane. But it is what it is. Ignoring that reality and not stocking up on defensive patents is foolish.
Guns exist. Buying guns to hurt people is bad. Buying guns to protect people from bad guys with guns is okay. It would be nice if guns didn't exist at all, but they do, so we have to deal with it.
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Man, you are utterly oblivious to the real world.
Guns can stop people with guns. I can't believe I even have to explain this, but if you shoot someone, they can't shoot back any more. If a group decides they want to attack your town, then your town will use guns to defend itself. If it did not, it would be conquered by people with guns.
Likewise, patents can stop people with patents. I'm surprised to be explaining this too, but if your company gets sued for patent infringement, the typical defense is to
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The US has statistics that clearly demonstrate that having knives so readily available leads to unwanted results. How does the availability of firearms lead to a proportionally high statistic for knife assaults and murders?
Except (Score:2)
Pooling patents does not give you increased defence. In fact, having them in a 3rd party company is even weaker defensively than holding your own. The only plausible explanations are joint licensing of the lot - like H-264, or to make offensive strikes like MPEG LA was trying to do against WebM. I don't see the commonality between the
Re:So one intent is better than another? (Score:5, Insightful)
Unless you are Google, which is responsible for the Android operating system, which is hated by Apple. If you don't have defensive patents, you are going to get sued into oblivion. Hell, the ITC might even rule that your products cannot be shipped into the United States because of infringement. I mean, Apple currently has HTC over a barrel. Do you think that HTC shareholders wished they had a few defensive patents to use against the iPhone?
The law might suck, but businessmen have to play by the law.
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a rectangular block with an edge-to-edge screen
This is just ridiculous.
Let's say that you want to design a phone with the following design consideration: It should have a large screen, but the phone itself should otherwise be as small as possible. What do you imagine it would look like, if not that?
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First, design patents are not the same as conventional patents. Second, Apple copied their iPhone look and feel from LG. Third, such copying happens all the time and is a normal and desirable part of the process of improving products. Fourth, HTC were the first significant smartphone producer, thanks mainly to their deal with Microsoft and the Sendo affair. They didn't patent heavily because they competed by producing better products, not paying lawyers to claim ownership of every possible random idea. Fift
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What other form factor is there once you decide to use a touch screen for your input device? Why would you make the device bigger than the screen, given it's designed to be portable? Why would you make the device any other shape then the shape of the LCD touch screen panel you are using? Why would you spend a fortune more on a non-standard LCD shape?
And of course the HTC Touch launched 25 days before the iPhone.
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That's because HTC actually copied more than a few things from Apple.
And Apple does not copy at all? Hello the hypocrisy of calling 2011 the year of copycats and then turning around an copying everyone else in iOS5....
rectangular block with an edge-to-edge screen
Why isn't iPhone like that? The bezel is HUGE! compared to most phones on the market.
I can see that Apple has a case of copying the looks against Samsung; But HTC came into the US market with different phones and caters to a different market than Apple.(Apple sells phones to customers, shoving the carriers aside. While HTC makes phones that fit the carriers
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The law might suck, but businessmen have to play by the law.
Man that statement is cute. I laughed a little when I read it. I mean I get the context, but still. Lol.
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Re:So one intent is better than another? (Score:4, Informative)
Well, given that innovation usually means to build new concepts on top of older ideas, or to extent older ideas - innovation means you'll have to defend yourself against other's patents.
Nobody is using actual patent *texts* in order to innovate though:
Regarding "Mutually Assured Destruction" - that can only work if there are two parties. If you have hundreds or thousands of parties involved, it's impossible that they could all be balanced against each other. In this case the patent portfolio prevents newcomers from entering the market, so it's very one-sided. And of course a patent portfolio provides virtually no defense against a company which doesn't produce anything - e.g. a law firm which buys patents.
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I have to say that, after waking up this morning, I realize my point about innovation is flawed. You cannot innovate on top of a patent, you are absolutely right. You can try to make something covered by a patent differently (and innovate in parallel) but then again, you do not even have to own the patent for that.
The rest of my point, that defensive patents are silly, is still valid. There's one kind of patent: offensive. You want to make money out of it (either by buying a patent you know you infringe upo
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Patents can create monopolies as well. If shared tech did not exist, Microsoft would not have written DOS for IBM and Apple would not exist as the MOS 6502 was based on the Motorola 6500 series.
The MOS 6501 was pin compatible with the Motorola 6500 but the 6502 had to change some pins. My point is that shared tech leads to lower prices and innovation. Not just the OS but hardware as well. This is what the FOSS movement is all about.
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How are either offensive or defensive patents better than the other really?
The thing that amazes me is that people don't seem to understand what that even means. A patent is, as the analogy goes, a nuclear weapon. It is not a missile defense shield. Its defensive use exists only in the sense that having it will cause your competitors to fear your retaliation if they attack you. It remains the case that you can either assert it or not, and taking the option off the table would make the patent worthless defensively as well as offensively.
More importantly, the idea of using an inhere
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Alright - I'm running some theories and scenarios through my head, trying to make sense of your statement. I'm not arguing, just asking.
How do defensive patent portfolios hurt innovation? Let's say that someone like Google makes it clear that they are holding a nice bag of patents "Just in case". Captain Nemo* manages to incorporate a patent or more into a new product to help him locate great whites more reliably. Nemo even makes arrangements with some small factory to produce these things, and they sta
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Defensive patents do not hurt innovation because... well, they don't exist. That's kind of the point. Defensive patents makes no sense by definition. A patent is, in and of itself, offensive: you use it to make money out of someone who infringe or you prevent someone from using your ideas.
In this case, they are buying it either to sue Google, or prevent Google from defending against other legal actions because they do not have a big enough "arsenal" to retaliate. How can that be defensive?
Thing is, patent t
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There's one thing about one company buying a patent to use it defensively. It's kinda another situation when every company but one enters into an agreement with each other for the express purpose of keeping patents away from just one of their collective competitors. That sounds to me like collusion.
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privacy, even for fat-cats (Score:1)
even though they're a bunch of greedy, fat-cat hypocrites, liars, and other sorts of assholes, i believe they should have the right to just say: "screw you, no, we're not going to court unless we've been shown to have already broken some kind of law. the answer is we're using them PRIVATELY, for WHATEVER THE FUCK WE WANT.'
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google ip theft (Score:2, Insightful)
Google is a blatant IP theft and idiots who have fallen for their "open" agenda are just pawns. If Google was really Open it would make available it's Search Engine, Page Rank patents and software for everybody to use. It doesn't do that because it is EVIL and seeks to commoditize th
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Your entire post is wrong because you're confusing copyright (which the GPL uses) with software patents (which are the things that Google -- and everyone else -- is violating, because it is impossible to make any nontrivial software without doing so).
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Google know that Andriod is not FREE because
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But I disagree. The purpose of a troll is to write comments that will incite anger and inflamed responses. This is not my purpose. I have my own individual beliefs that Google is becoming one of the most evil companies out there, which I am wanting to promote. If you have a different opinion and actually believe Google is a genuine nice guy I feel sorry for you.
There is more and more mounting evidence that Google has major privacy violation issue
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If Google truly believed
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The fact is Google could not compete even with
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The problem is that Google wants to fight most of these.
There are a large number of patents that need to be invalidated and you'll notice that no one is going after good directly, even though they manufactured their own phone.
Thats because Google as a company wants patent reform. It wants these things to be brought into a court of law where they can bring lawyers to bear and actually do some good.
Now, its not all altruistic on Googles part obviously. They have a massive amount of software developers etc emp
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Actually where google really screwed themselves is using java in it in the first place. Android will be forever playing performance catch up not to mention the patent issues surrounding it.
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The java performance myth disappeared long ago dude.
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This whole patent mess could be averted if (Score:1)
We just made independent invention an absolute defense against patent infringement. If your idea is truly innovative then there should be little risk to someone independently inventing it.
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Mod parent up.
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Those stupid Ecommerce patents for shopping carts etc. and business process patents which follow the model, (well known business process) "on the Internet" are clearly garbage.
What about something like the bounce you get when you scroll an iPhone to the bottom of a web page? If it was granted a patent, which I th
Laws can be productive or unproductive (Score:2)
I demand Zillions for purchasing patents. Not a cent for debt relief and no taxes. This is war and we must be productive to achieve victory!
Citizen's Political Power in the U.S.
http://i-voter.tripod.com/ [tripod.com]
Not suprising (Score:2)
I called it as soon as I heard the deal was closed and it wasn't Google who won the patents. There is no way that Google or the government was going to let that go unchallenged.
Defensive *IS* offensive in business (Score:3)
In the context of business one must "defend or lose it." So asking if they plan to become patent trolls will not give the answer they seek. Further, even if they say "no, we will be nice" there is nothing to stop them from changing their position in some way or even better, to sell patents to go trolling to another shell to go about trolling. Just asking them in advance if what their intentions are is just about useless.
If we want the patent and other IP systems to work the way they should, copyright, patent and trademark ownership should not be transferable away from the original creator. And in the case of a corporation, I think rights should remain with the original creators as well which is to say the people employed by the company at the time who were involved in the creation. This would result in the instant death of patent trolling and the instant reform of the copyright industry. It would force companies to be loyal to their employees once and for all instead of treating them as disposable peons while they reap the benefits for the life of the corporation + XX years. And the copyright industry, unable to rape artists now and in the future, will have to play nicely with the talent for a change.
If the patent system is supposed to benefit the inventors, then restore it to suit that purpose. If the copyright system is supposed to benefit the artists, then restore it to suit that purpose. If not, then I would rather the system and the people operating it stop lying to the people about what it is and what it is for.
The only beneficiaries are lawyers (Score:2)
Meanwhile, the money spent on legal fees is not spent on the following: R&D, manufacturing, hiring, capital equipment purchase, advertising, stock dividends, salaries, stock value increases.
Ultimately, no matter which side prevails, the total wealth generated is less then it should be due to the patent system. Patents were intended to reward innovation. Now all they do is keep high priced l
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Patents, as formed in the US founding documents are intended to reward disclosure. They are a monumental failure at that: they are not written in a language that laymen can understand, and they are usually not even written in a language that an engineer would use...
Frankly, I think it would be quite generous if we allowed patents to exist for five years before pruning: Any patent not quoted or referenced in a scholarly journal or textbook in its field should expire.
Defensive vs.offensive patents (Score:2)
The Justice Department wants to know whether [the consortium] intends to use them defensively to deter patent lawsuits against its members, or offensively against rivals.
As opposed to "innovatively, for the common good".
I don't have access to the paywalled article, but isn't this the DoJ publicly admitting that patents only serve two purposes, neither of which are the ones they're intended to serve?
Eric Schmidt/Obama (Score:1)
Must be nice for Eric Schmidt to have Obama's ear.
Offensive illegal? (Score:3)
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Likely considering a monopoly position. If you hold a large number of the key patents to a technology, you can effectively shut down all your competition. As bizarre as it sounds, my guess is that buying a monopoly position through buying key patents may be considered unfair competition.
The new way of tech competition (Score:1)
Axis of Evil (Score:2)
This is the Axis of Evil we're talking about. Of course they're going to say, "We would never dream of using these patents offensively -wink, wink-. We would only use them defensively -chuckle, chuckle-.