There is much to be said about Apple’s acquisition of Nortel’s patent portfolio. The deal size is impressive, keeping in mind that these are intangible assets.
This deal is proof that a company that fails to bring the results of its R&D activity to market will face difficulties. Nortel filed for bankruptcy while sitting on a huge and valuable portfolio of patents. Innovation is about bringing new products and services to market and not (only) about filing patents.
Seen from the outside, this looks like a defensive move from Apple. Defensive action knowing that patent trolls were participating in the auction. The term “patent troll” designates acquisition funds and companies that focus on acquiring patents and then suing other companies that use those patents without paying royalties.
Are patent trolls a barrier to innovation or an incentive? There’s plenty of debate on this issue. It appears that Apple could not afford to see these patents fall into the “wrong hands”. There were two patent trolls in the auction according to the press, among them Intellectual Ventures.
This deal also shows the importance of access to competitors’ assets (in this case, intangible assets) developed by other companies. This is especially the case for technology companies. Innovation is not about a lone genius coming up with an idea but more like a collective effort, that involves various companies and experts working together to deliver a novel product or service.
The acquisition illustrates the central role that patents play in a technology company’s development as well as their enduring value.
Do you think that this acquisition was caused mostly by financial factors i.e. that Apple is looking to make a financial gain from this portfolio? Or would you say that the this was mostly a defensive move? Let me know…
