Patents: Going Once..Going Twice…GONE!

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Tech and mobile companies have been running behind patents to keep themselves out of lengthy and expensive court battles. Patents are becoming a business in its own right. The companies which own patents are viewed as ducks which lay the golden eggs.

The market for patents are hotter than ever an analyst from Marksman and Shrubs told ArabianGazette.com, its has become the ticket for success, who ever has the largest number of patents wins the contents and is given immunity.

Now Google which has lost before on the Nortel Networks patents (http://arabiangazette.com/google-cramped-out/) has decided to be aggressive in its search for patents.

Google Inc. is eyeing InterDigital with a hunger only a wounded tiger would know. InterDigital told Tuesday that it has hired Evercore Partners and Barclays Capital to consider strategic alternatives for the company, including a sale, based on the skyrocketing valuations for intellectual property rights for wireless technology.

InterDigital

Founded in 1972, InterDigital’s team also invents new technologies it potentially can patentrepresenting new sources of revenue.

InterDigitals patents in cellular technology are deeper and stronger than Nortels, InterDigital Chief Executive Officer William Merritt said in April.

InterDigital owns and licenses about 8,800 patents relating to transmitting wireless data, canceling noise interference during phone calls and other technologies for use in cellular phones and networks. Its patent portfolio is built mainly around handsets, and covers different wireless standards, making it an attractive target not just for Google, but also for other large telecommunications and technology companies. The company claims to have contributed significantly to an early mobile digital cellular standard once used by AT&T and many others around the world.

According to the companys website its licensing program had generated more than US$1 billion by 2006.

“We continue to be optimistic about the prospects for the company under its current business plan,” Terry Clontz, InterDigital’s chairman, said in a statement. “That said, over the past year we have seen the value of intellectual property rise substantially as major players in the mobile industry increasingly understand the strategic and economic value of this type of asset.”

The company expects to fetch a price that not only reflects the value of its patents, but the long-term recurring revenue that stems from licensing patents, the people said. Financial advisers will likely reach out to a wide number of technology companies as part of the auction, they said.

Google advantage

Google, which owns the fast-growing Android operating system used in millions of mobile phones, has a thin portfolio of wireless and telecommunications patents. That makes the Internet search giant vulnerable to patent-infringement lawsuits.

The company requires this acquisition to materialize at a time when its Andorid mobile operating system is under heavy attack. Giants with far stronger patent positions than Google including Microsoft, Apple and Oracle are suing Google and Android phone makers for alleged patent infringement. With a stronger patent portfolio that the other companies might be required to rely on, Google could better defend Android.

Apple

Google is not the only company after the patents, Apple is also running for the same gold. We have seen recently the lawsuits which were brought against Samsung and HTC by Apple. It seems Apple would be happy to increase its patent portfolios.

Eastman Kodak

It has become a lucrative and an easy way to make money for many companies. Eastman Kodak has decided to get on the patent bandwagon.

With more than 1,100 digital imaging patents, the company indicated on Wednesday that it may sell a big chunk of them.

The photo and imaging company announced it was “exploring strategic alternatives” to its digital imaging patents. Kodak did not elaborate. But such language in the business world often serves as a flag to draw interest of potential buyers.

“Given recent trends in the marketplace for intellectual property, we believe the time is right to explore smart, opportunistic alternatives for our digital imaging patent portfolios,” Kodak General Counsel Laura G. Quatela said in a statement.

According to Kodak, its digital imaging patent portfolio has to do with various aspects of capturing, processing, storing, organizing, editing and sharing digital images.

As part of “exploring strategic alternatives,” Kodak has hired Lazard Group LLC, an investment bank that also does corporate consulting on such issues as fundraising and acquisitions.

Kodak has relied on its intellectual property portfolio to be a big generator of cash. Between 2008 and 2010, its intellectual property generated $1.9 billion in revenue, much of that through licensing. The company has said that it expects its IP portfolio of more than 11,000 patents to generate between $250 million and $350 million a year this year and annually through at least 2013.

The company is currently in a legal battle with Apple and Research in Motion, alleging those two firms are using Kodak digital imaging patents in such products as the iPhone and BlackBerry, with some estimates indicating a settlement in the case could represent as much as a $1 billion windfall for Kodak.

But the Lazard announcement may change that. Earlier this year, Kodak told the Wall Street community that it is using its intellectual property money and sale of non-strategic assets to fund the new business areas that it is counting on to drive growth in 2012, such as inkjet printing and packaging printing.

“It’s interesting they want to sell these technologies off,” given that such digital businesses were to lead the company into profitability in 2012, said Gregg T. Abella, co-principal with Investment Partners Asset Management of New Jersey and a frequent critic of Kodak’s direction and management. The sale of such technology makes it hard to know what technology would remain and how Kodak would commercialize it, he said.

Kodak, though much smaller than it was in its heyday, remains the fourth-largest employer in the Rochester area with about 7,100 local workers as of earlier this year.

At the end it all boils down to the survival of the fittest, and parents make all of them fitter.

Thanks to all these patent suits the courts have been buzzing with activity, however tax payers may wonder who is actually benefiting from their taxes. I guess, the big giants should thank the little person. It would be nice if you and I could be sent nice hampers with the latest gadgets and gizmos, I game!

Source: WSJ, CNET, CNBC, PC World, ROC Now

 

 

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