Nortel patents go for $4.5 billion to consortium

Nortel sold off some of the last bits of the company Thursday night, auctioning off its remaining patents and patent applications to a consortium of buyers for $4.5 billion.

Five groups participated in the multi-day auction, which was kicked off by Google’s “stalking horse” bid of $900 million (CP: Waiting on winners of Nortel patent treasure trove). More than 6000 patents were up for bid, covering areas such as data networking, optical, semiconductors, search, social networking and, perhaps most importantly, a variety of wireless technologies including LTE.

Experts expected the patents to yield a couple of billion dollars, so the $4.5 billion winning bid would seem to reflect some very competitive and active back-and-forth between some of the telecom and IT industries largest players. A final hearing on the sale is slated for July 11. The sale is expected to close in the third quarter.

Details on the sale are not complete yet, though RIM said it is contributing $770 million and Ericsson $340 million so far, implying that different vendors will get access to different pieces of the patent pie.

The question becomes now: what will the winners do with those patents? One option, of course, is to collect royalties on use of certain technologies. But given the high-stakes in today’s technology sector, especially with high-speed wireless networks and mobile devices and apps just on the take-off ramp, they could also be used as a significant competitive advantage (CP: Could Nortel wireless patents buyer wield them like a club?)