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Playing the patent game

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The auction of Nortel Networks' patent portfolio drew interest from some of the biggest names in the tech space. With wide speculation of other patent acquisitions in the works, industry leaders appear determined to get their hands on increasingly important caches of intellectual property.

“Patents are being increasingly used for defensive purposes,” Dev Bhangui, analyst, Fraser Mackenzie, tells BNN.

“There used to be a time when people would own the patents and would translate them into revenues for themselves. Now the patents have acquired a strategic importance in terms of defending your own market share by the multi-billion [dollar] companies, like the Googles and the Apples of the world.”

Bhangui says in Google’s case, after losing the Nortel patents to a consortium consisting of Apple, RIM and Microsoft, the company has to look for an alternative. Publicly-traded InterDigital (IDCC-Q) holds more than 1000 mobile phone-related patents, and is suspected to be in the crosshairs of the internet giant.

“After InterDigital, there is nothing much left,” Bhangui says.

“InterDigital is exactly like Wi-Lan, it’s a patent portfolio holding company. They not only hold 4G patents, but they also hold 2G and 3G. So there is this backwards continuity for anyone who acquires them.”

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