back to article Microsoft squeaks on Google Nortel sale

Microsoft is worried that any sale of Nortel's patents could endanger the worldwide agreements it had with the company. Google is offering $900m for the remnants of the company, and its 6,000 patents, and Microsoft is calling for any existing patent agreements to be transferred. Microsoft warned that any sale would disrupt …


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  1. spegru

    Pot, meet Kettle

    That's the trouble with patents!

  2. Anonymous Coward
    Anonymous Coward

    Not being funny but...

    If MS is prepared to spunk US$8.5 billion on Skype, another billion or two on patents that your existing products rely on would be a steal....

    1. Charles Manning

      If Nortel was a verb

      They'd have bought it in seconds.

  3. Martijn Otto
    Thumb Down

    Patent Troll MS

    Wait, the patent troll MS is now telling us that the patents Nortel has could disrupt innovation?

    Guess this is just another example of "Do as I tell, not as I do".

    1. Ian Michael Gumby


      I don't think you or anyone else really understands what Microsoft and others are saying.

      What they are saying is that if the patents are being sold, then the purchaser is going to be obligated to honor the existing licensing agreements.

      Here's an example...

      Suppose I patented a working fusion reactor. Now there's cheap abundant energy for all because I licensed it to all of the world's governments and power companies making me a fortune. But then I go and blow my fortune on hookers and tiger blood. (Charlie Sheen reference) I am then forced to sell my patents so I can keep a roof over my head and some food on the table.

      So I then I auction off the patents to pay my debt.

      Unless the auction specifically requires the transfer of the licensing agreements to the purchaser, meaning that they have to honor the terms and conditions of the existing agreements, they can then go ahead and declare the agreements null and void and force everyone to come back to the table and re-agree upon new T's and C's.

      While IANAL, were this a normal sale of the patents, then the existing licenses would survive the sale. Auctioning off the asset to satisfy a debt... that's another matter.

      I doubt anyone cares if Google owns the patents as long as their existing agreements are kept in place.

      1. Charles Manning

        What likely annoys MS most...

        IANAL either, but the rights and obligations will depend on the contract and nothing else.

        If MS secured a worldwide license for ever, for the once off payment of three hookers, or the yearly payment of one hooker, then they will continue to get that.

        If however there was some clause saying "to be renegotiated on a yearly basis" or whatever, then Google could potentially ask for more hookers next year or just say no altogether.

        What most likely annoys MS most of all is that having to pay licenses likely gave them a leg up because the costs of licensing would have been a barrier to entry, giving MS some sort of market advantage.

        Google might just give away free rights to all which means MS have paid for rights which don't give them any advantage.

  4. Anonymous Coward

    $900M doesn't even cover the shortfall in the Nortel UK pension fund

    When Nortel UK went bust, it left 20,000 employees and former employees uncertain about the future of their pensions, because the Company had failed to adequately fund the pension scheme (to an amount around £1Billion, exact estimates vary)

    Don't read much about that in the press (or here) these days.

  5. Captain Scarlet Silver badge


    If they are so worried why don't they just buy the reminants via one of their patent troll companies that they are all members of?

  6. g e

    I should think

    that it would be incumbent on the Nortel purchaser to honour existing licensing agreements...

    Otherwise I could buy MS tomorrow (in theory) and immediately invalidate everyone's Windows/Office licenses and demand more payment.

  7. Anonymous Coward
    Anonymous Coward

    Gotta love privity

    In Westminster law you can transfer ownership of property - but that is independent of agreements. It is called "privity" in contract law.

    So this is hilarious - Microsoft might have agreements with Nortel, but it doesn't with Google, and so the transfer of the patents will mean that Google has no responsibilities to Microsoft.

    What is amusing is that Microsoft were never a technology group - they were, from the very start, a legal entity using their legal muscle to damage the IT industry (much like Apple). So who gives a flying f@#$ about Microsoft now? I don't - and you don't - if you care about technology!

  8. NoneSuch
    Thumb Down

    What are they on about?

    Contracts do not evaporate in a company sale / merger or takeover. If you buy a company outright you take on any debt they possess, bank any cash they have and assume any liability or payments owing to the sold company. If you have a signed agreement with a corporation and they are sold to another corporation the buying corp has to honor the agreements unless there is a pre-existing clause in the original contract to cover a sale situation (and I have never seen that).

    Google may be able to renegotiate or cancel depending on the original contract text, but simply selling the company will not do that.

    1. Rovindi

      subtle difference

      They are not buying the company per se, but buying its portfolio of patents in a fire sale. There is a big difference between the two. Buy the company and acquire all the debt/obligations etc. Buy their junk and well, you´ve got a pile of junk, not the legal entity that was previously Nortel.

      Except it´s not junk, hence Microsoft and everyone up in arms because, er, Google have got there first. There will be some seriously hardcore patents in there, which is why all the others are miffed...

  9. James Gosling

    Oh how I laugh

    Microsoft is so two faced, it is hilarious!

  10. nyelvmark


    I'd like to see this clarified - there seem to be differing opinions here about the law. It sounds distinctly odd that the transfer of a patent should nullify existing licence agreements. That would make licensing extremely risky. Suppose I agree to license your technology and invest 100 million in a specially-built factory. You then transfer the patent to your brother, who can legally blackmail me into paying him more, or can even refuse to give me a licence, rendering my investment worthless.

    What's the reality here?

    1. Charlie Clark Silver badge

      Cross my palm with silver...

      and I might tell you. On the other hand, I might come up with a third opinion! Don't lawyers lead a great life? :-)

      I suspect the whole thing is up for negotiation - full details of what's on offer should be available from the administrator. Should be remembered that Google's bid is as much to get the ball rolling as anything else. Though it seems to have Microsoft foxed - maybe they simply prefer to overbid on patent-light companies (Skype) when there is no one else bidding? Note to self - set up company with "web scale" - is there a cream for that? - but few assets and just wait for the offers!

  11. Anonymous Coward
    Anonymous Coward

    Microsoft android royalties

    I wonder if Microsoft and HP have straight, or cross licence patents with Nortel. If Nortel had a patent licence from Microsoft, then presumably that licence would change hands too.

    I think Microsofts worry is that their agreement with Nortel, could affect their extorting of royalties from Android providers.

  12. JaitcH

    Nortel, Canada's version of AT&T and Bell Labs, had a lot of Canadian taxpayer money ...

    in it. It's a pity no one is thinking of them.

    As for the shafted ex-employees pension contributions, I hope they don't expect Delaware courts to give a damn, Delaware is for business only.

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