Nortel Patent Auction

The fight for smartphone supremacy led to a furious bidding war for the patents and patent applications of Nortel Networks Corporation this spring. The Canadian telecommunications company filed for bankruptcy in 2009 and had sold off various businesses for a total of $3 billion, but Nortel’s intellectual property attracted far more interest.

In April, Google Inc. made a $900 million stalking horse bid, an unprecedented amount for a patent portfolio and an offer that seemed calculated to preclude an auction. It didn’t. Instead, the biggest names in the tech sector competed aggressively for the assets during an auction held during the last week in June at the New York offices of Cleary Gottlieb Steen & Hamilton. The proceedings were covered by confidentiality agreements, but the auction indisputably generated a dramatic increase in the portfolio’s value.

Apple Inc. led a consortium dubbed Rockstar Bidco LP that agreed to pay $4.5 billion for the patents. Rockstar included Apple’s erstwhile archenemy Microsoft Corporation as well as Research In Motion Limited, which developed the BlackBerry; EMC Corporation; Sony Corporation; and Swedish telecom Telefonaktiebolaget LM Ericsson. Google and Intel Corporation, like the winning consortium, teamed up to bid late in the auction, but they reportedly dropped out when the price rose past $4 billion.

Judge Kevin Gross of the U.S. bankruptcy court in Wilmington approved the sale on July 11.

For winning bidder Rockstar Bidco LP

Paul, Weiss, Rifkind, Wharton & Garrison: M&A: Marilyn Sobel, counsel Ji Lu, and asso­ciates Jesse Dallal and Andrew Hennigar. Intellectual property: Charles Googe, Jr., and associate Menachem Kaplan. Bankruptcy: Stephen Shimshak, counsel Diane Meyers, and associate Jonathan Koevary. Tax: Peter Rothenberg and associates David Levine and Joy Zhang. Antitrust: Joseph Simons, counsel Didier Malaquin, and associate Marta Kelly. Employee benefits and executive compensation: counsel Reuven Falik. (All are in New York, except for Lu and Simons, who are in Washington, D.C.) Paul, Weiss worked with Ericsson in its successful bids for several of Nortel’s North American businesses.

For Rockstar member Apple Inc. (Cupertino, California)

In-House: General counsel Bruce Sewell and senior M&A counsel Victoria Nassi.

Weil, Gotshal & Manges: ­ Corporate: Howard Chatzinoff, Kyle Krpata, and associate Andrew Nelson. Technology and intellectual property transactions: Charan Sandhu and associate Kwang-chien Ger. Intellectual property counseling: Jason Kipnis and associate Eric Scheuerlein. Restructuring: Ronit Berkovich, Marcia Goldstein, and ­associates Christopher Linden and Saima Majid. Antitrust: John Scribner and associate Jeff White. Tax: Scott Sontag and associate Ben Solaimani. (All are in New York except for Krpata, Nelson, Ger, Kipnis, and Scheuerlein, who are in ­Redwood Shores, California, and Scribner and White, who are in ­Washington, D.C.) Former Weil ­partner Matthew Powers has ­previously done patent litigation work for Apple.

For Rockstar member EMC Corporation (Hopkinton, Massachusetts)

In-House: Senior corporate counsel Peggy Tirrell.

Skadden, Arps, Slate, Meagher & Flom: Corporate: Margaret Brown. (She is in Boston.) Brown represented EMC on its purchase of VMWare, Inc., in 2003, on EMC’s 2007 IPO of the company, and on EMC’s 2009 purchase of Data Domain, Inc. [Big Deals, September 2009].

For Rockstar member Microsoft corporation (Redmond, Washington)

Covington & Burling: Bankruptcy: Benjamin Hoch and associate Martin Beeler. Intellectual property: Nigel Howard and asso­ciates Christopher Beals, Jessica Milner, and Grant Young. Tax: Robert Heller. Antitrust: Evan Cox, Lars Kjølbye, special counsel Miranda Cole, and associate Thomas Weck. (All are in New York except for Young, who is in Washington, D.C.; Cox, who is in San Francisco; and Kjølbye, Cole, and Weck, who are in Brussels.)

Cadwalader, Wickersham & Taft: Antitrust: Charles “Rick” Rule. (He is in Washington, D.C.)

For Rockstar member Research In Motion Limited (Waterloo, Ontario)

Irell & Manella: Corporate: Eric Webber and associate Colin Murray. Intellectual property: Alan Heinrich , Andrei Iancu, and asso­ciates C. Jay Chung, Gunnar Gundersen, Stephen McArthur, and Trevor Stockinger. Tax: Joel Rabinovitz and of counsel Elliot Freier. Bankruptcy: Howard Steinberg. (All are in Los Angeles.)

McCarthy Tétrault: Corporate: Cheryl Slusarchuk. Tax: Jerald Wortsman. (Slusarchuk is in Vancouver. Wortsman is in Toronto.) The firm has represented RIM since 2001 and advised the company on most of its acquisitions as well at RIM’s agreement to pay NTP, Inc., $612 million in 2006 to settle patent litigation brought in the United States.

For Rockstar member Sony Corporation (Tokyo)

In-House: Senior vice president–legal Mark Khalil.

Shearman & Sterling: M&A/IP transactions: Samuel Waxman. Antitrust: Wayne Dale Collins, Geert Goeteyn, and Hans Jürgen Meyer-Lindemann. (Waxman and Collins are in New York. Goeteyn and Meyer-Lindemann are in Brussels.)

For losing bidder Google Inc. (Mountain View, California)

Wachtell, Lipton, Rosen & Katz: Restructuring and finance: of counsel Philip Mindlin and associate Gregory Pessin. Corporate: Adam Emmerich, Benjamin Roth, and associate Donald Casey. Antitrust: Ilene Gotts. Executive compensation and benefits: David Kahan. Tax: Jodi Schwartz. (All are in New York.)

Torys: Restructuring: Michael Rotsztain and associate Adam Slavens. Corporate: Cameron Koziskie and associates Eric Boehm, Robbie Leibel, and Ebad Rahman. Intellectual property: Ingrid VanderElst. Competition: Omar Wakil. Tax: John Tobin and associate Saira Bhojani. Employment: asso­ciates Reesha Hosein and Christina Medland. Litigation: David Chernos, Richard Conway, and Crawford Smith. (All are in Toronto.)

For losing bidder Intel Corporation (Santa Clara, California)

In-House: General counsel Douglas Melamed, deputy general counsel Steven Rodgers, director of licensing and patent acquisitions Dana Hayter, and senior licensing counsel James Kovacs.

Wilmer Cutler Pickering Hale and Dorr: Bankruptcy: William Perlstein, George Shuster, Jr., senior associate Benjamin Loveland, and associate Meg Feist. Corporate and IP licensing: Michael Bevilacqua, John Burgess, Jeffrey Hermanson, counsel Kimberly Wade, and senior asso­ciate Alison Kapilow. Antitrust: Leon Greenfield. (All are in Boston except for Perlstein, Wade, and Greenfield, who are in Washington, D.C.) Intel GC Melamed was a Wilmer partner before joining the company.

For losing bidder Rpx corporation (san francisco)

Dewey & LeBoeuf: Corporate finance: Joseph Seiler III. Intellectual property: counsel Spencer Wood. Bankruptcy: Irena Goldstein. Antitrust : John Collins and A. Paul Victor. Tax: Hershel Wein. Corporate: associate Dean Agnos. (All are in New York, except for Wood, who is in Chicago.) Dewey has represented RPX since its formation in 2008.

McMillan: Bankruptcy: Andrew Kent and Waël Rostom. Corporate: Bruce Chapple. Competition and trade law: A. Neil Campbell and associate Sorcha O’Carroll. (All are in Toronto.)

A consortium led by RPX, which buys patents and then licenses them to various technology companies, dropped out of the bidding early on.

For seller Nortel Networks Corporation (Mississauga, Ontario)

In-House: General counsel Anna Ventresca, chief intellectual property officer John Veschi, and senior intellectual property counsel–IP Christopher Cianciolo.

Cleary Gottlieb Steen & Hamilton: Bankruptcy: James Bromley, Lisa Schweitzer, and associates Emily Bussigel, James Croft, and Robert Ryan. M&A: Paul Marquardt, Paul Shim, and associates Kevin Cunningham and Jason Zhou. Corporate: Craig Brod and asso­ciate Anna Kogan. Intellectual property: counsel David Herrington and Daniel Ilan and associates Mee-Jung Jang, Johnathan Jenkins, and Julia Rozenblit. Antitrust: Jeremy Calsyn, James Modrall, and associates Margaret Cowan and Alexandra Deege. Tax: Jason Factor and associate Boris Khentov. Employee benefits and executive compensation: counsel Kathleen Emberger and ­associate Helen Skinner. (All are in New York except for Marquardt, Calsyn, and Cowan, who are in Washington, D.C., and Modrall and Deege, who are in Brussels.)

Global IP Law Group: Intellectual property: David Berten, C. Graham Gerst, Ragnar Olson, and Steven Steger. (All are in Chicago.)

Morris, Nichols, Arsht & Tunnell: Derek Abbott, Eric Schwarz, and associate Annie Cordo. (All are in Wilmington.)

Herbert Smith: Corporate: Alex Kay, senior associate Robert Moore, and associate Kathryn Baillie. Intellectual property: of counsel Laura Deacon. (All are in London.)

Norton Rose OR: M&A: Senior partners James Cade and Michael Lang and partners Jeremy Grushcow and Troy Ungerman. Restructuring: senior partner Derrick Tay, partner Jennifer Stam, and lawyer Evan Cobb. Intellectual property: partner Christopher Hunter. Employment: partner David Bannon. Tax: partner Adrienne Oliver. (All are in Toronto.)

For Ernst & Young Inc., Canadian court-appointed monitor of Nortel

Goodmans: Restructuring: Jay Carfagnini, Joseph Pasquariello, and associate Chris Armstrong. (All are in Toronto.)

Allen & Overy: Bankruptcy: Ken Coleman and Daniel Guyder. Antitrust: Todd Fishman and Elaine Johnston. (All are in New York.)

For Nortel’s unsecured creditors

Akin Gump Strauss Hauer & Feld: Restructuring: David Botter and Fred Hodara. Corporate: Stephen Kuhn. Intellectual property: Karol Kepchar. (All are in New York except for Kepchar, who is in Washington, D.C.)

Richards, Layton & Finger: Bankrupty: Mark Collins and asso­ciate Christopher Samis. (Both are in Wilmington.)

For Nortel bondholders committee

Milbank, Tweed, Hadley & ­McCloy: Alternative investments: Albert Pisa and associate Jennifer Harris. Restructuring: Dennis Dunne, Thomas Kreller, and of counsel Thomas Matz. Litigation: Andrew Leblanc. Corporate: Roland Hlawaty and associate Nicholas Venditto. Intellectual property: associate James Klaiber. (All are in New York except for Kreller, who is in Los Angeles, and Leblanc, who is in Washington, D.C.)

For joint administrators of Nortel’s europe, middle East, and Africa operations

Hughes Hubbard & Reed: Litigation: Derek Adler. M&A: Avner Ben-Gera. Bankruptcy: Michael Luskin. (All are in New York.)

Capital One / ING Direct

Capital One Financial Corporation agreed on June 16 to pay ING Groep N.V. $6.2 billion in cash and $2.8 billion in stock for ING Direct USA, the Dutch bank’s U.S. online unit. The deal would make ING Capital One’s largest shareholder with a 9.9 percent stake and would give ING a seat on the financial services company’s board.

The European Commission required the sale in the fall of 2009 as a condition of the $14.2 billion in bailout money that ING received from the Dutch government in the 2008 financial crisis.

The parties hope to close the deal late this year or early next pending regulatory approvals in the U.S. and the Netherlands. Neither company’s shareholders get to vote on the deal.

For buyer Capital One Financial Corporation (McLean, Virginia)

In-House: General counsel John Finneran , chief counsel–transactions Shahin Rezai , chief counsel–card, regulatory, and enterprise governance Andres “Andy” Navarette, senior associate general counsel–transactions Kathryn Hu, and associate general counsel–transactions Sharon Johnson.

Wachtell, Lipton, Rosen & Katz: Corporate: Matthew Guest, Edward Herlihy, Lawrence Makow, and associates James Gilmartin, C. Derek Liu, Brandon Price, and Justin Rosenberg. Regulatory: Richard Kim. Antitrust: David Neill. Executive compensation and benefits: David Kahan and asso­ciate D. Miishe Addy. Tax: Joshua Holmes and asso­ciate Michael Sabbah. (All are in New York.) Wachtell advised Hibernia Corporation on its $5.4 billion sale to Capital One in 2005 and North Fork Bancorporation, Inc., on its $14.6 billion sale to Capital One the next year. The law firm then represented CapOne on its $520 million purchase of Chevy Chase Bank, F.S.B., in 2008. Wachtell also represented Capital One on its $2.6 billion agreement to acquire HSBC Holdings plc’s U.S. credit card business, a deal announced on August 10.

Mayer Brown: Corporate: Andrew Noreuil, Jodi Simala, Frederick Thomas, and asso­ciates Allison Handy, Jennifer Rhein, Lei Shen, and Bradley West. Finance: Chadwick “Chad” Hoyt, Jon Van Gorp, and asso­ciates Amanda Baker and Chae Yi. Financial services regulatory and enforcement: Scott Anenberg, Jerome Roche, Jeffrey Taft, and associate Donald Waack. Intellectual property: Richard Assmus, A. John Mancini, and associates Nancy Hoffman and Allison Levine. Tax: Thomas Bottomlee and associate Tricia Buhrfiend. Employment and benefits : Debra Hoffman and asso­ciates ­ Katherine Dean and Ryan Liebl. Real estate: Frank Arado and associate Sara Brown. (All are in Chicago except for Anenberg, Roche, Taft, and Waack, who are in Washington, D.C.; Mancini, Hoffman, and Levine, who are in New York; and Arado and Brown, who are in Charlotte.)

Loyens & Loeff: Corporate: Bas Vletter and counsel Willem Booysen. Restructuring: Vincent Vroom. Bank regulatory: Kitty Lieverse. (All are in Amsterdam.)

For seller ING Groep N.V. (Amsterdam)

In-House: General counsel Jan-Willem Vink, senior legal adviser Erik Hammerstein, and legal adviser Brendan O’Connor.

Sullivan & Cromwell: M&A: H. Rodgin Cohen, Brian Hamilton, Mark Menting, and William Torchiana. Tax: Ronald Creamer, Jr. Executive compensation and benefits: Matthew Friestedt. Structured finance: Christine Spillane. Intellectual property: Nader Mousavi. (All are in New York except for Torchiana, who is in Paris, and Mousavi, who is in Palo Alto.) Sullivan advised ING on the sale of its 70 percent interest in ING Canada to an investor group and its $11.1 billion follow-on equity rights offering in 2009, the Dutch government’s $13.4 billion capital injection in 2008, and other deals from the 1970s on.

For target ING Direct USA

In-House: General counsel Kristine Wellman, senior counsel Josh Averill, and compliance officer Paul Shay.

Fish & Richardson: Trademark, copyright, and unfair competition: counsel Catherine Stockell. (She is in New York.)

Kilpatrick Townsend & Stockton: Employee benefits and executive compensation: Lois Colbert and Mark Wincek. Financial institutions: Eric Kracov. (Colbert is in Charlotte. Wincek and Kracov are in Washington, D.C.) The firm worked with Wellman when she was the general counsel at BB&T ­Corporation.

Morrison & Foerster: Financial services: Henry Fields, Charles Horn, and associate Kimberly Harbin. (Fields is in Los Angeles; Horn is in Washington, D.C.; and Harbin is in New York.) MoFo also advised Capital One on the HSBC deal.

Venable: Thrift regulatory issues: John Beaty. Insurance: John Zink III. (Beaty is in Washington, D.C. Zink is in Towson, Maryland.) Venable represented ING in the establishment of the federal savings bank in 2000 and has been the thrift’s primary outside regulatory counsel since then.

For ING Direct USA board

Dechert: Financial institutions: Robert Ledig and Thomas Vartanian. Corporate: Ian Hartman. Litigation: Claude Tusk. (Ledig and Vartanian are in Washington, D.C. Hartman is in Philadelphia. Tusk is in New York.)

Marcus is a reporter at The Deal.E-mail: dmarcus@thedeal.com.

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