Posted by & filed under Accounting Principles, Advanced Accounting, Financial Accounting.

Nortel Patents

The group that owns thousands of patents for technology developed by defunct Canadian telecom company Nortel filed patent lawsuits Thursday against Google, Samsung, HTC and Huawei.

Rockstar, an Ottawa-based company that is co-owned by Apple, Microsoft, BlackBerry, Ericsson and Sony, claims that protected Nortel technology underlies some of Google’s search technology.

Rockstar bought the portfolio of Nortel patents for $4.5 billion in 2011, undercutting Google, which ended its bidding for the same portfolio at $4.4 billion.

Google is accused of infringing seven patents for technology that helps send users ads based on their internet search terms, the lawsuit said.

Use of Patents?

“Despite losing in its attempt to acquire the patents-in-suit at auction, Google has infringed and continues to infringe,” according to the filing in U.S. District Court in Texas.

Google declined to comment on the suit, according to Reuters.

The complaint asks for past and future damages arising out of Google’s infringement, with a trial by jury.

Rockstar, which has been carefully combing through technology owned by its owners’ competitors for Nortel patents, also filed a complaint against Samsung Electronics for seven different patents.

The suits against Samsung and other Android phone makers such as HTC and China’s Huawei, involve a navigation tool for graphical user interface and aspects of its operating system that support gallery, maps and browser functionality.

Nortel had a portfolio of 6,000 patents related to wireless technology, fiber optics, internet search and social networking. The formerly dominant telecom company went bankrupt in 2009 and sold off its assets.

Rockstar is devoted to determining where Nortel technology underlies today’s wireless devices and software and has a team of lawyers who press users for compensation with the threat of lawsuits as an incentive to pay up.


Entities frequently expend resources, or incur liabilities, on the acquisition, development, maintenance or enhancement of intangible resources such as scientific or technical knowledge, design and implementation of new processes or systems, licenses, intellectual property, market knowledge and trademarks (including brand names and publishing titles). Common examples of items encompassed by these broad headings are computer software, patents, copyrights, motion picture films, customer lists, mortgage servicing rights, fishing licenses, import quotas, franchises, customer or supplier relationships, customer loyalty, market share and marketing rights.

Definition: An intangible asset is an identifiable non-monetary asset without physical substance.

Useful Life of the intangible asset: Determining the useful life of an intangible asset is based on any legal, regulatory or contractual provisions that may limit the useful life

Discussion Questions:

1. Why are patents considered intangible assets?

2. The fact that Rockstar purchased the technological patents from a bankrupt company (i.e. Nortel) , shouldn’t these patents have expired? Why or why not?

3. The patents often have a legal life of 20 years as established by law: After the 20 years legal time frame, will these patents be available to the public?

Article taken form the CBC news, read more see the CBC website, click on link

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