Nortel is ignoring Research in Motion's complaints about the sale of its wireless business, saying Wednesday that "the auction will commence as planned on Friday, July 24."

Nortel said that the auction, being done under court supervision because Nortel is in bankruptcy protection, will take place under court-established procedures. Other bidders agreed to comply with the procedures to become qualified bidders, but RIM did not, Nortel said in a news release.

BlackBerry maker RIM, headquartered in Waterloo, Ont., said Monday it had been prevented from submitting an offer for the Nortel wireless business because it also wanted to buy other Nortel assets. "RIM was told it could be qualified [to bid for the wireless assets] only if it promised not to submit offers for other Nortel assets for a period of one year," RIM said.

But on Wednesday, Nortel said that the procedures do not preclude offers to buy other assets.

Nortel said all bidders must sign a standard confidentiality agreement, which contains a common "standstill" provision that allows Nortel to ensure it is directly involved in any future negotiations on the sale of its assets

"The standstill provision does not preclude future offers by a bidder to acquire assets consistent with any processes established by Nortel or the courts," Nortel said.

The confidentiality agreement protects a company's confidential information, such as its intellectual property.

Nortel, the court-appointed monitor overseeing actions taken while it is in bankruptcy protection, and the two committees representing creditors "have reviewed the circumstances related to RIM and have concluded that all bidders must comply with the bidding rules," Nortel said.

Nortel said it had been talking to RIM about a possible bid, "but those discussions are currently on hold."

Patents and tax losses

Meanhwhile, analysts suggested RIM wants Nortel for the company's key patents, and Nortel's tax losses could make the bid virtually free for RIM.

Nortel technology could help RIM prepare for fourth-generation wireless networks.

"The fact is, RIM appears to have among the weaker intellectual property positions in the industry," Veritas Investment Research Corp. analyst Neeraj Monga said.

"Essential patents tend to have more value because everybody and their business needs them to make their products work."

If RIM could use even a small portion of Nortel's losses, "they can pay for this bid out of the tax recoveries alone," said Duncan Stewart, director of research and analysis at DSam Consulting. "Done properly, RIM can essentially make this bid for free."

With files from The Canadian Press