Maybe we could learn from Apple how to use the “market hype” tool effectively in the sales process of patents. Take the auction of Nortel’s patents. Nortel Networks, the Canadian maker of switches, wireless gear and routers (competing with products from Cisco or Alcatel) went bankrupt early 2009. Along with the company now known as Alcatel Lucent, it computerized the operation of telephone networks during the 1980s. Nortel pioneered the development of equipment and software that brought the world wireless phone networks. Nortel quickly sold of its business much as Qimonda – the German memory company split out of Infineon Technologies – tried to do when it went under in 2009. Nortel’s bankruptcy administrators sold most of the Nortel assets in 2009-2010. Avaya bought Nortel’s enterprise VoIP and switching assets for US@ 915 million, Ericsson bought Nortel’s CDMA division for US$ 1.13 billion. Nortel’s core packet network business was sold to Hitachi for U$10 million, so was Nortel’s carrier VoIP gear.
What is left are clusters of patents are being auctioned and for which bidding has taken place in December 2010. Bids have been made for blocks of patents including some that could change the balance of power among mobile operators. According to IP Insider, sources expect the sale to draw wireless telecom newcomers Apple and Google, which want to build up patent war chests as they fight companies such as Nokia which is involved in high profile patent court cases in the US and Europe. ‘There has been one round of bidding on those patents, this has been completed,” said one source, who declined to be identified because the process is private. ‘And what Nortel has done is divide the patents up into different lots covering different kinds of technologies.’
Sources expect the sale to draw wireless telecom newcomers Apple and Google, which want to build up patent war chests as they fight incumbents such as Nokia, which want to protect their patent positions, in the courts.
“There has been one round of bidding on those patents, this has been completed,” said one source, who declined to be identified because the process is private. “And what Nortel has done is divide the patents up into different lots covering different kinds of technologies.”
Nortel still holds more than 4,000 patents that analysts say are worth more than $1 billion in total. Two sources with knowledge of the auction process say they have been grouped into six “buckets” of related technologies and that final bids are due within weeks after initial bidding in December 2010.
Assuming the bankruptcy administrators want to make as much money to satisfy the creditors, one wonders why the auction sale process is “confidential”. A “price frenzy” is what any seller would love wouldn’t they? So why the confidentiality. It’s systematic for the patent business. As if we fear that transparency would harm the process, the business likes to be private, controlled and “risk free”, a preference for small back room trading activities, only-for-insiders trading. Rather than a Instead of following a rational, analytical approach, wouldn’t a full swing public auction have drawn a much more high profile press coverage, blogging activity and chatter in the NPE and patent community so as to create a marketing hype? Maybe the party responsible for the auction process could have learned a bit from the Apple marketing strategy which is based on smartly creating hypes. Apple’s success in creating a horde of large resourceful competitors would help patent sale professionals in making the patent sales process a lot more open transparent, informative and last but not least, fun.