Industry Minister Christian Paradis is asking his officials to look into how the Investment Canada Act may apply to the Nortel patent auction.
If officials find the auction is subject to review under the act, the minister must find that the sale is of "net benefit" to Canada before approving the deal.
"The minister has asked his officials to look into how the Investment Canada Act may apply to this transaction," Industry Canada said in brief a statement Wednesday.
A consortium comprised of Canadian technology heavyweight Research In Motion Ltd., Apple, EMC, Ericsson, Microsoft and Sony won the auction for more than 6,000 patents with an offer of US$4.5 billion last week. RIM's share amounted to $770 million.
The group beat out Google and others for the patents, which include technology that is expected to be the backbone of wireless networks for the next decade.
Under the act, deals involving foreign investors buying a Canadian business with assets worth more than C$312 million are subject to review.
Much of Nortel's research and development was done in Ottawa, at a facility formerly known as Bell Northern Research, although the company also had research facilities around the world.
Once Canada's technology superstar, Nortel has been selling assets to repay creditors since filing for court protection under the Companies' Creditors Arrangement Act in January 2009.
The patents were the last major technology asset Nortel had left to sell.
A joint hearing to approve the sale by the courts in Canada and the United States overseeing the sale of the Nortel assets is scheduled for July 11.
The company has held several auctions for its various divisions and assets that have required a review under the Investment Canada Act.
In 2009, then-industry minister Tony Clement signed off on Nortel's sale of its Metro Ethernet Networks division to U.S.-based Ciena Corp. for $769 million. The government also approved the sale of Nortel's enterprise solutions business to Avaya Inc. for $900 million.
However the Conservative government has been known to say no to sales under provisions of the Investment Canada Act.
Clement blocked BHP Billiton's hostile takeover bid for PotashCorp last year and, in 2008, then-industry minister Jim Prentice blocked the sale of MacDonald, Dettwiler and Associates Ltd.'s space business to U.S. defence contractor Alliant Techsystems Inc.