Apple’s Nortel Patent Purchases Could Face Federal Review

Apple recently spent $2 billion dollars to purchase Nortel’s LTE patents, as part of a consortium that spent over $4.5 billion to acquire the former Canadian telecom’s valuable mobile-related patents.

These windfall patent sales are now faced with a possible federal review, to see if the deals bring a ‘net benefit’ to Canadians. Christian Paradis, the Industry Minister has started to investigate whether the sale falls within the Investment Canada Act, which is a standard practice.

Stipulations regard if a non-Canadian entity buys out a Canadian business with a greater value of $312 million, there must be a net benefit provided. Under investment rules, it will have to be determined if Nortel’s 6000 patents can be defined as a ‘business’.

Telecom analyst Ronald Gruia says the deals being blocked are unlikely, as the sale of patents benefited Canadian company RIM, engineers in Canada employed by Ericsson (one of the winning bidders), and 20,000 pensioners from Nortel.

The biggest loser of the four-day auction was Google, as they failed to purchase much needed patents to further strengthen their Android development.

What do you think? Should the Federal Government be stepping in here, or should the deals go through as followed?

Thanks for the email, Tim!

[Toronto Star]