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Apple-Microsoft Venture Seeks Shield for Nortel Data

A patent-buying venture that includes Apple Inc. (AAPL), Microsoft Corp. (MSFT) and Sony Corp. (6758) asked a U.S. judge to keep secret some details about assets the group bought for $4.5 billion at a Nortel Networks Corp. bankruptcy auction in 2011.

A trial scheduled to start next week in Wilmington, Delaware, threatens to reveal confidential information the companies gained when they bought more than 6,000 patents from Nortel, the defunct telecommunications company, the group said in court papers.

Rockstar Consortium, as the venture is known, manages the patents. The company said it wants to avoid a public airing of information such as who may be targeted for patent-infringement lawsuits, who may have signed license agreements and who may be potential licensees.

“Disclosing such information could permit potential licensees, business partners, and customers to make purchasing or licensing decisions disadvantageous to Rockstar using Rockstar’s own confidential information,” the venture said in court papers.

Nortel (NRTLQ)’s U.S., Canadian and U.K. units are scheduled to spend at least five weeks in court fighting over how to divide more than $7 billion in cash raised through a series of auctions, including the bidding won by Rockstar.

Claiming Cash

Each unit is claiming part of the cash on behalf of its creditors and they have been unable to resolve their differences in negotiations, according to court documents.

Nortel filed for bankruptcy in January 2009 in the U.S. and Canada after losing almost $7 billion since 2005. At its height in 2000, the company reported $30 billion in annual revenue, had a market capitalization of $250 billion and employed almost 93,000 people, the company said in court papers.

The Nortel units and lawyers for Rockstar and Microsoft were in court yesterday to ask judges in Canada and Delaware to approve rules for keeping details of the patents under seal.

U.S. Bankruptcy Judge Kevin Gross said that on certain types of patent-related documents, he would defer to Microsoft and the other companies about whether something should be kept secret. Should someone challenge the need to keep a document confidential, that person would have to show why it should be made public, Gross said.

Gross agreed to continue the hearing today to give lawyers more time to draft specific rules to determine when a document should be kept secret.

The case is Nortel Networks Inc., 09-bk-10138, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net

To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net Charles Carter

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