Google (GOOG) Opens Nortel Patent Bid at $900 Million

In an auction for the giant patent portfolio held by Nortel, Google (NASDAQ:GOOG) offer the first bid volley at $900 million. Competitors like Nokia (NYSE:NOK) and Apple (NASDAQ:AAPL) are looking at entering into the bidding process as well.

Via an order from a bankruptcy court, Nortel has been ordered to divest of its patent holdings, which are estimated to number at about 6,000, including patent applications as well as patents already awarded.

Google has stated, as well as others, that they're interested in acquiring patents in order to help battle an endless number of patent infringement lawsuits which are also costly to defend against.

Expectations are it'll probably take much more than this to secure the patents, depending on the players and how deep their pockets are.

Google (NASDAQ:GOOG), Apple (NASDAQ:AAPL) Ready to Duke it Out Over Nortel Patents

Potentially lucrative patents from Nortel Networks Corp. are closed to being auctioned off, and major rivals Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL) are among those companies ready to battle to acquire the assets.

Nortel has been selling its portfolio of about 4,000 patents after its filing for bankruptcy in 2009, and this particular portfolio includes patents related to long-term evolution, or LTE, wireless phone networks.

These are potentially lucrative more from the defensive strategy of a company when they are forced to defend themselves against a lawsuit. They could also be used as an offensive tool to sue other companies as well.

The highly competitive wireless industry is becoming increasingly litigious, and have a cadre of patents to defend or attack is a growing necessity for those who want to survive and thrive in the current environment.

Some companies could even buy them for the sole purpose of suing others. That suggests a highly competitive bidding battle for these particular patents.

Others will buy them and license out the technology, another very lucrative business opportunity.

Huawei Technologies Co. and ZTE Corp., a pair of companies based in China, are also reportedly interested in the patents, as are a couple of consortiums put together to pool their capital in order to make a competitive bid.

CIENA (NASDAQ:CIEN) Still Weighed Down by Nortel Deal

For a reason not justified by the performance of CIENA (NASDAQ:CIEN), Jefferies remains somewhat positive on the outlook even though the Nortel deal continues to weigh on them and they're having difficulty bringing costs under control.

Jefferies said, "Despite management's enthusiasm on the company's top line momentum and operating leverage, our long-term concerns around the acquisition persist."

EPS estimates for full year 2011 were lowered to $0.22 from $0.00. For full year 2012 they has an EPS estimate of $0.50 on them, with revenue of $1.86 billion.

Ciena closed Monday at $19.08, down $0.13, or 0.69 percent. Jefferies raised their price target on them from $10.25 to $13.

Apple (Nasdaq:AAPL), Google (Nasdaq:GOOG) Battling for Nortel IP

Intellectual property assets as those held by Nortel, and which they're selling through the bankruptcy process, don't come along often, and Apple (Nasdaq:AAPL) and Google (Nasdaq:GOOG) have been participating in the struggle to acquire the IP assets, with some having both defensive and revenue potential.

Patents are a source of both, and in the case of Apple and Google, they're more than likely looking the closest at licensed patents related to 4G. At the time they were obtained by Nortel, 4G wasn't at a stage of being commercially viable.

Of the 105 patent families considered essential to 4G technologies LTE and SAE, Nortel owns seven of them.

The patents under the roof of Nortel number approximately 4,000, and are collectively valued at about $1 billion.

Apple closed Friday at $320.56, up $0.80, or 0.25 percent. Google closed at $592.21, up $0.71, or 0.12 percent.