It looks like RIM may not be getting a piece of Nortel's patent portfolio after all

Posted by Knowlton Thomas

Nortel, in its prime, was a Canadian legend in the making, set to make our country's history. And in the end, it did, but for all the wrong reasons.

As one of the final pieces of the puzzle, Nortel sold its 6,000-strong patent portfolio to a consortium consisting of Apple, EMC, Ericsson, Microsoft, Sony, and RIM for $4.5 billion in total.

But with Research In Motion as the only Canadian company in the consortium, the deal is far from done.

Federal Industry Minister Christian Paradis has initiated an investigation, at the heart of which is the question: should Canada's foreign investment rules apply to this sale?

With just one Canadian company and five foreign companies, from the U.S. to Japan to Sweden, Canada will see only 17 percent of the portfolio remain on its soil.

The key rule under consideration is that any acquisitions of a Canadian business valued above $312 million by a non-Canadian organization must be of a "net benefit" to Canada, as determined by a formal government review. And this is enforced by law.

However, only twice in Canada's history has this rule ever come into play, most recently in late 2010 when Tony Clement blocked a $40-billion hostile takeover of Saskatchewan's Potash Corp by an Australian company.

Also, it's a foggy area, because Nortel's patent portfolio does not necessarily constitute a "Canadian business," which is required for a review to apply.

If the deal is broken, RIM has the best chance to still grabbing some of Nortel's patents. But at a net value of $4.5-billion, the portfolio is too large for the Waterloo-based BlackBerry maker to purchase alone. It will need to forge a new, all-Canadian alliance for make a new offer, should this one flop.

Company:
Nortel
Website:
http://www.nortel.com
Location:
Toronto, Ontario, Canada

Hundreds of millions of people, Fortune 500 companies, and government institutions around the world trust their networks to Nortel's reliable and secure solutions. Nortel is a recognized leader in delivering communications capabilities that make the promise of Business Made Simple a reality for our customers. Our next-generation technologies, for both service provider and enterprise networks, support multimedia... more

Company:
BlackBerry
Website:
http://www.blackberry.com
Location:
Waterloo, Ontario, Canada

Research In Motion (RIM), a global leader in wireless innovation, revolutionized the mobile industry with the introduction of the BlackBerry solution in 1999. Since then, BlackBerry products and services have continued to change the way millions of people around the world stay connected. With the launch of BlackBerry 10, we have re-designed, re-engineered and re-invented BlackBerry. Not only did we introduce a... more


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Knowlton Thomas

Knowlton Thomas

Knowlton is the managing editor of Techvibes. Based in Vancouver, Knowlton has been published in national publications and has also appeared on television and radio. Previously he was an editor for New Westminster weekly The Other Press and served on its board of directors. When not working, Knowlton enjoys playing tennis or otherwise enjoying the outdoors. more



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