Nortel, RIM held wireless patent talks - source

A sign is pictured outside Nortel's Carling Campus in Ottawa July 24, 2009. BlackBerry maker Research In Motion has held talks with Nortel Networks on buying next-generation wireless patents that were not part of Nortel's $1.13 billion wireless asset sale on the weekend, a source familiar with the situation said on Monday.

TORONTO (Reuters) - BlackBerry maker Research In Motion has held talks with Nortel Networks on buying next-generation wireless patents that were not part of Nortel's $1.13 billion wireless asset sale on the weekend, a source familiar with the situation said on Monday.

On Saturday, bankrupt Nortel sold a portfolio of CDMA and next-generation LTE wireless assets to Swedish telecom equipment maker Ericsson.

However, Nortel and RIM have held negotiations on other key patents related to the next-generation wireless business "for months," the source told Reuters on Monday.

By trying to buy the LTE patents still held by Nortel, RIM is aiming to future-proof its business and avoid having to license the technology later from another company, said Research Capital analyst Nick Agostino.

"The opportunity is here now for them to own the ... hopefully material patents," Agostino said. "They can save on royalty costs and I think it's also going to be a benefit on the margins."

Nortel said it had no comment. RIM was not immediately available, but in a statement on Sunday it reiterated it "remains interested in acquiring certain Nortel assets," without providing specifics.

RIM's talks with Nortel are on hold and the Ericsson offer is awaiting court approval. However, the existence of the negotiations suggests RIM may be working to put together a deal with Nortel even though RIM claimed it was shut out of bidding on the assets that Nortel sold to Ericsson.

Waterloo, Ontario-based RIM had argued that Nortel's bidding process imposed unreasonable conditions and had effectively blocked RIM's own proposed $1.1 billion bid.

Toronto-based Nortel, however, had accused RIM of not complying with common confidentiality provisions that other bidders had agreed to follow.

The tense situation appeared to cool off at least a little on the weekend, when Nortel announced that Ericsson had won the asset auction.

Nortel, once North America's biggest maker of telecom equipment, filed for bankruptcy protection in January, blaming the economic crisis for derailing its turnaround attempts.

It has begun selling key divisions in hopes of generating value for its stakeholders, rather than attempting a restructuring that would see it emerge from creditor protection.

Nortel was once a Canadian high tech powerhouse, boasting a market capitalization of more than $250 billion and some 90,000 employees at the height of the tech boom at the start of the decade.

Today, the company is little but a shadow of its former self with 25,000 employees left. Its stock has been delisted from the major exchanges in Canada and the United States and is worth almost nothing.

Even before the economy sputtered, Nortel posted billions in losses. Its massive job cuts, asset sales and reorganizations were not enough to offset a plunge in demand for its products.

As well, industry rivals such as Alcatel and Lucent merged while Nortel sat on the sidelines and Asian competitors captured market share with lower-cost offerings.