Tag Archives: Ericsson
Top 4 Patent Sellers

Panasonic, NEC & Sony are battling with IBM for patent sales leadership

Despite dramatically lower patent valuations, some big companies, including under-performing foreign holders, have taken the number of U.S. sales to new highs.

While IBM still leads, over the past three and a half years, it has been joined by IP-conservative firms from Japan, notably Panasonic/Matsushita, NEC and Sony. All four of these companies have something in common: poor recent financial performance.

In the January IAM Magazine, the Intangible Investor looks at the latest trends in patent sales among the biggest sellers. Activity is up and emerging are new leaders, like Panasonic, which leads even IBM in U.S. sales for the first half of 2015.

Analysis conducted by Brody Berman Associates in conjunction with Envision IP, a law firm that specializes in patent research, reveals that “for the three-and-a-half year period from 2012 to early August 2015, the leading seller by far was IBM, with 5,356 patents. Buyers include Google, Facebook, Alibaba and Twitter. In 2014 alone, IBM sold 2,187 patents, the most in any year over the period by any of the 12 leading tech companies analyzed.

Leading Patent Sellers

“Surprisingly, the number two, three and four patent sellers in the 2012-2015 period were all Japanese companies,” writes this reporter. “Panasonic/Matsushita, NEC and Sony, with 4,203, 2,131 and 1,578 respectively. This is a dramatic shift for conservative Japanese electronics giants, which rarely litigate patents to generate revenue or enable others to.”

Subscribers can link to IAM’s January issue here.

Intellectual Venture’s 70,000 patent portfolio appears to contain no patents originally owned by Apple, Google or Qualcomm, as Envision’s findings indicate. Several patents owned by IV investors appear in its portfolio, including those of Nokia, Verizon, Microsoft and Sony. Only 268 of the 19,559 US patents owned by IV were identified as having a litigation history, representing less than 1.5% of the portfolio.

Top 4 Patent Sellers

Among the top companies IV purchased from are Kodak (1,057), American Express (643), AT&T (358) and Philips (313) and Ericsson (273).

A list of IV’s 35 top sources for acquisitions can be found here.

Image source: Envision IP, LLC

ip-dealmakers-logo-2015

IP Dealmakers Forum will host 200+ patent monetization bigs in NY

The second annual IP Dealmakers Forum, December 7 – 8, will bring together leaders from the finance, legal and business communities to discuss the issues affecting patent licensing, sales and value, and to facilitate transactions.

New this year is a separate workshop for institutional investors that focuses on understanding IP as an asset class. This invitation-only, closed-door workshop will address the characteristics, market size and scope of patents as business assets, discuss practical investment issues, and examine the current investment universe. For additional information, go to here.

Luncheon Keynote

This year’s luncheon keynote is Edward Jung, co-founder and Chief Technology Officer of Intellectual Ventures, which holds more than 70,000 patents.  After leaving Microsoft where he was Chief Architect, Jung founded IV in 2002. As CTO, Jung sets strategic technology direction and new business models for the company. He holds more than 750 patents worldwide with has an additional 1,000 pending in the areas of biomedicine, computing, networking, energy, and material sciences.

The keynote topic is Driving Deals Through the Patent Storm”ip-dealmakers-logo-2015

Other speakers, at the New York event which will be held at the Apella event center overlooking the East River, include chief or senior executives from leading IP holders, both NPEs (non-practicing entities) and operating companies, institutional investors, financial institutions and PIPCOs (public IP licensing companies), including

France Brevets, Techquity, EverEdge IP, Finjan, Royal Philips, Gerchen Keller Capital, Fortress, IP Bridge, Northwater Capital, Wood Creek Capital, Allied Minds, WiLAN, American Express, nXn Partners, Bridgestone Americas, Swiss Alpha, Freescale Semiconductor, Ericsson and Marathon Patent Group.

For this year’s IPDF agenda and speakers, go here.

IP CloseUp readers can still save $200 on Forum registration by using promo code “IPCloseUp_Special”.  A special landing page has been created for IP CloseUp reader registration: http://www.ipdealmakersforum.com/ipcloseup/

Apella-Lounge-Daytime-e1439319412266

Actionable Insights 

“The program is dedicated to providing attendees with actionable insights from successful dealmakers,” says Wendy Chou, co-founder and producer of IP Dealmakers Forum. Session topics include:

  • Boom or Bust: The Public IP Market One Year Later
  • All About Patent Quality – How to Invest in Powerful Patents
  • New IP Businesses, Investing for Innovation & Growth
  • The Evolution of IP Litigation Funding & Insurance Markets
  • 2016 Presidential Election Perspectives on Patents
  • How IP Drives Corporate Reinvention, M&A and Investments

Last year’s inaugural event connected diverse intellectual property monetization experts with public and private market investors, and was attended by approximately 200 investors, IP executives, and advisors. Due to popular demand, expanded space will be provided in 2015 for private one-on-one meetings.

Changing Times

“These are changing times,” said Ashley Keller, co-founder of Gerchen Keller Capital, and a scheduled speaker at this year’s Forum. “As the market shifts, understanding the increased importance of due diligence expertise, the changing perceptions of risk and valuation, and the sources and expectations of those with investment capital, is a prerequisite for anyone who intends to succeed in this arena.”

Image source: IP Dealmakers Forum 

The future of IP will be examined at the 10th IP Summit in Berlin

Uncertainty is putting pressure on patents, trademarks and copyrights. All are facing more scrutiny and a challenging future.  

Scrutinizing these fundamental issues on December 3rd and 4th in Berlin will be more than 600 IP holders, executives and investors attending the Intellectual Property Summit. Organized by Premier Cercle, it will be the tenth edition of the popular conference, held previously in Paris and Brussels.

This year’s Summit will attempt to deconstruct global IP trends and explore the future of IP rights – patents, trademarks, copyrights and trade secrets – as business assets. There will be 100 speakers from Europe, North America and Asia.

Plenary topics include:

  • What is the future of IP in the 21st century?
  • Is your nation ready for open innovation?
  • More IP rights or better enforcement?
  • The future of injunctive relief in Europe?

On Friday, December 4 at 2:20 (14.20), your intrepid IP CloseUp editor, BB, will moderate a panel on Patent Quality – Always Challenging; Never Simple. Panelists will include:

>Valencia Martin Wallace  Deputy Commissioner for Patent Quality  USPTO / US

>Daniel G. Papst    Managing Director  PAPST LICENSING Gmbh & Co. KG / DEU

> Christian Vejgaard   European Patent Attorney  ERICSSON / SWD 

Chair : Bruce Berman Principal  BRODY BERMAN ASSOCIATES / US  

11A Patent Quality – Always Challenging; Never Simple
Defining patent quality
– What is a good patent?
– Distinguishing validity from invention quality and value
– Establishing more reliable patents
– The impact of poor quality

The patent quality session will be followed by a session on patent transactions on which IBM, Samsung, Chipworks and Unified Patents and are scheduled to participate.

This year’s IP summit partners include IP CloseUp and Brody Berman Associates. 

For the full agenda go here.

To register go here.

imgres

Image source: premier cercle; i-mop.biz

LexMachina - cover page

Top Plaintiffs are Operating Cos Not NPEs, New Study Shows

Seven of the top ten plaintiffs with the most patents asserted in cases open in 2013 are operating companies.

Data presented in a report released this morning by Lex Machina, the legal analytics firm based in Silicon Valley, indicate that businesses that sell products are much more likely to be involved in active patent litigation than so-called patent “trolls.”

This may come as a surprise to many trying to weaken the patent system because of NPE activity. “2013 Patent Litigation Year in Review” presents a host of timely facts, among them plaintiffs with the most patents enforced. Only two NPEs Intellectual Ventures (twice) and RAK Technology Licensing, are among the top ten companies.

LM Ericsson and Ericsson, Inc. were the most litigious, with a total of 176 active cases open. Motorola Mobility, owned by Google, and Apple, also were on the top ten list, each with 52 active cases.

___________________________________

Figure 20:
Plaintiffs With Most Patents
Asserted in Cases Open During 2013

1. Telefonaktiebolaget LM Ericsson 103
2. Intellectual Ventures I 100
3. Intellectual Ventures II 81
4. Ericsson, Inc. 73
5. Finisar 59
6. Ronald A. Katz Technology Licensing 65
7. Motorola Mobility 52
8. Apple 52
9. Philips Electronics 41
10. Pfizer 30

*Intellectual Ventures I and II and Ronald A. Katz Technology Licensing are NPEs.
The remaining seven plaintiffs are operating companies.

____________________________________

Suits, Trials, Damages 

Some of the most frequently asserted patents originated at Xerox, AT&T and Stamford University. Five of the top ten damages awards were in the life sciences, not IT. Average awards were up 28%, “dragged higher,” the report states, by “healdline-stealing damages.”

The median patent damages award for 2013 was still slightly over $1 million, at $1,256,920. It is up but remains relatively low given the hoopla surrounding patent awards and the increase in suits filed. (Much of the increase in suits filed can be attributed to “joinder” provisions in the America Invents Act, which make it more difficult to enforce against multiple parties in a single suit.)

There were just 128 patent trials last year, a number which has varied little for more than 20 years. This is amazing given the explosion in patents granted (a total of 302,948 in 2013 alone), increasing complexity of innovation and the number and importance of IP rights in consumer and other products.

The entire Lex Machina report can be found here. It compares favorably with those patent litigation reports from RPX and PwC.

Illustration source: lexmachina.com 

game-changer-ahead-331x220

Rockstar’s Deal with Spherix Could be a Game-Changer for IP Investors

The emerging public IP company space took an an unexpectedly positive turn last week.  

Rockstar Consortium, with a portfolio of more than 4,000 communications patents, has struck a deal with a tiny public patent monetization company, Spherix (SPEX), that is certain to increase the already growing interest in public IP-centric companies, or PIPCOs. 

Spherix, with a market cap of only $5M, said in an announcement that it has entered into a deal with Rockstar, one of the world’s leading patent holders, to acquire a suite of patents. The announcement did not specify the patents being acquired, or the number, nor did it disclose the terms of the transaction. The press release did state that Rockstar has agreed to become a shareholder in Spherix, and that Spherix intends to bring its first enforcement action on the Rockstar portfolio within 30-60 days. 

Rockstar has said that it has been actively licensing its portfolio, but, to date, has not filed any suits. It could be using Spherix as a privateer, or third-party, to do its nasty bidding. However, a rockstar-consortium-247x180successful patent monetization executive close to IP CloseUp told me that would be unlikely, “because without shell companies obscuring ownership, as some patent holders have been known to do, the source of the IP rights in this case is fairly clear.” Rockstar may be merely testing the waters to see how public ownership will affect its portfolio value and licensing potential, and if access to the capital markets can make a difference.

IP CloseUp readers will recall that Rockstar bought most of the patent portfolio from bankrupt Canadian telecom company Nortel for $4.5 billion in 2011. The transaction constitutes what is probably the most expensive patent acquisition ever. The genesis of it was thought to be a collective move against technology rival and Android champion Google. Rockstar is owned by Apple, Microsoft, Ericsson, Blackberry, Sony and EMC.

It’s important to remember that Apple, with a $2.6 billion investment, owns some 58% of Rockstar and, presumably, had some input in the Spherix deal. There may be something on Apple’s agenda that makes the Spherix deal particularly attractive. Time will tell us if this is in fact the case. A few weeks ago in IP CloseUp I wrote about an IEEE Spectrum story that showed how Apple was involved in acquiring a Mitisubishi-originated patent that was eventually turned over to an NPE, presumably more for competitive leverage than cash.

The IAM blog wrote that “On the face of it, then, what we have here is a classic privateering arrangement; but it is possible there is more to it than that. As a Spherix shareholder it is not only assertions of its own patents that Rockstar will benefit from, but also of other portfolios Spherix owns and may acquire in the future.” 

IAM also reported that Anthony Hayes is expected to become CEO next month. Previously a partner at law firm Nelson Mullins Riley & Scarborough, Hayes “was one of the people behind JaNSOME IP Management, a New York-based IP advisory and monetization outfit launching a $30 fund that would invest ‘in global opportunities in the patent market’. Whether his move to Spherix is fund-related, or whether Hayes has cut his links with JaNSOME is not clear.”

60710_spherixSpherix announced a restructuring in December 2012 when it effectively became an IP monetization company. In Seeking Alpha, Adam Gill reports that “[Spherix] had no patents to speak of before this Rockstar deal, but its wholly owned subsidiary Nuta is about to merge with North-South Holdings, which brings $2 million in cash and a portfolio of 222 patents acquired from Harris Corporation (HRS), another company known to have a robust patent portfolio.” Details on that deal can be found here.

*     *     *

It will be interesting to see if other large patent holders, including operating companies, will seek to test the patent licensing market the via the public equity one.

There is nothing to stop a public company that owns IP rights from taking an equity position in another one, putting it in a better position to monetize its IP rights. In fact, this may be a more efficient and financially rewarding for shareholders.

If I am not mistaken, a 5% or greater stake in a public company is subject to a 13D filing with the S.E.C., disclosing the owner. It could be Rockstar directly or a representative, or Rockstar could own its stake through several entities. We’ll have to wait and see how this plays out.

*     *    *

Both Spherix (SPEX) and Global Options Group (GLOI), which began trading on Monday after announcing a deal with the group that holds the Walker Digital patents, have been added to the IP CloseUp 30

Illustration sources: thecarecompany.com; techweek.co.uk; sepherix.com 

Patent Valuations: Why do they Differ from Selling Price?

Owners and buyers are frequently out of sync w/ investors

Valuations that are either too high or low underscore the need to provide more bracketed price scenarios when it comes to selling a patent portfolio.

The frequent disconnect between seller, appraiser and buyer suggests a more flexible approach might be needed that anticipates a variety of conditions, contexts, types of buyers, and possible deployments.

Under the best of circumstances, providing an accurate patent valuation is difficult. Valuations typically are conducted for litigation purposes, licensing, taxes and M&A.  A cash flow model applied to patents that are already licensed may not help much. Encumbrances or prior licensing agreements can make these patents less valuable to a new owner. So can an inability to enforce agreements. (Kodak says its patents have generated more than $3B in licensing revenues since 2001.)

Buying and selling whole portfolios is a relatively new phenomenon. Patents are a veritable moving target, with the price of portfolio and individual rights in constant flux. A buyer’s perceived level of need plays a significant role in driving price, not abstract reasoning from accountants or Ph.D.’s. How one or more specific buyers plan to use a particular group of assets will help determine the price it eventually sells for, as well as perceived need, cash position, strength of their current patent coverage, etc.

Reasons for Buying

Large operating companies often buy for strategic (defensive) reasons, i.e. for leverage to counter-balance a potential enforcement against them. A few have started to think about also acquiring patents for their revenue-generating potential. The Rockstar Consortium may have been formed for defensive leverage in mind, but it is clearly in the licensing business. Based on what Apple contributed to the Nortel purchase price, $2.6B, it appears to own 58% of Rockstar. It likely would like more than a strategic ROI.  

Sometimes keeping patents out of the hands of a competitor or competitors is sufficient value to pay a premium to market, especially if the buyer already has a lot of cash and is conducting less R&D that it might. This may have been the motivation behind Google’s $12.5B acquisition of Motorola Mobility and its some 17,000 patents and 6,000 patent applications.

Was Google certain about what it wanted to do with the MMI and its portfolio before purchase? Who knows? Given Google’s cash position and probably need it was not likely to overpay at any price. Foremost, the purchase kept the assets out of the hands of companies who could possibly harm them. (Apple, Microsoft, etc.) After losing out on the Nortel patents the company’s strategy likely changed, as did its willingness to pay a premium to acquire the next “essential” portfolio. There is no disputing that with the MMI purchase Google went overnight from patent have-not to a serious player. (My mother used to say, “rich or poor, it’s nice to have money.”)

Valuations can under-estimate as well as over-estimate price. Here are some recent patent valuations and sale prices or offers:

Kodak, $2.21B – $2.57B –  CNET auction bids to date, $150M-$250M
(Valuation by 284 Partners)

AOL, $290M + $1.1B – Sale to MSFT for $1.1 B (and in turn to Facebook $550M)
(Valuation by M-CAM and MDB Capital)

Nortel, (Stalking Horse minimum bid by Google, $900M) – Sale price $4.5B to Rockstar Consortium
(Apple, ($2.6 B), Microsoft, Ericsson ($340M), Sony, RIM ($770M), EMC)

Motorola Mobility $7.9B market value
(Google paid $12.5B, a 63% premium per share over its stock price, largely for its 17K patents and 6K applications )

*     *     *

More the Exception Than the Rule

While patent valuation is far from merely throwing darts, it is very difficult to come up with a number for what a buyer will pay for a group of rights at a given time. One could say hitting the sales price target, today, is more the exception than the rule.

If Wall Street and retail investors are to take patent portfolios and transactions seriously, more standardization of terms and methodology will help. There at least needs to be a common vocabulary in discussing patent attributes and possible impediments. Best-case scenarios are not typical. (Perhaps patent valuations should come with a glossary of terms and conditions?) At a minimum, the source of the valuation (paid private firm, investment banking firm, independent appraiser) should be made clear.

In real estate, where there is almost always well-defined body of comparables, mis-targeting the final selling price by much more than 10% is rarely acceptable. For now, missing the final selling price of a patent portfolio by 100% or more is. This does not a market make. Worst of all, it confuses those investors who attempt to make rational stock decisions based on the opinion of valuation professionals. What inventors fail to remember is that intangible assets are much less predictable, and so are their buyers.

Nice-to-Have vs. Need-to-Have

Valuing for litigation damages has always been more art than science. Still, each side has its expert and the court may have one, too. Triangulation often is the result, and it can work in a damages scenario where compromise is acceptable to both parties. Competitive bidding is wonderful for some sellers, but it is only occasionally a realistic option.

Nice-to-have patents are one price; need-to-have another; litigation quality still another. Some but not all of this is in the eye of the beholder.

*     *     *

Lest we forget, patent valuations for the purpose of a sale may have more to do with goosing the stock price  and enhancing the anticipated offer than establishing a true selling price. For now, surprises in on the high or low end are likely remain the norm. The most useful patent valuations will anticipate the unexpected.

Image source: axialmarket.com; gaebler.com

Shareholders are Biggest Loser in Nortel Patent Sales

Shareholders are Biggest Loser in Nortel Patent Sale

Where Was Nortel Management Before Bankruptcy Filing?

Significant patent value was not something that Nortel senior management apparently believed it was sitting atop when it filed for bankruptcy reorganization under Canadian and U.S. laws.

Could management have sold, borrowed against or otherwise leveraged the value of its vast patent portfolio and prevented the bankruptcy that will leave shareholders with pennies on the dollar? Continue reading

Sale of Telco Patents May Change Tech Power Balance

Bidding Frenzy Likely for Nortel Rights

Reuters broke a story that bids for the remaining Nortel Networks patents worth up to $1 billion are due within weeks.

Sources close to IP Insider have said that a veritable bidding frenzy among technology companies such as Apple and Google has developed: “They’re selling off the prized LTE/wireless cluster,” said a banker familiar with the negotiations. “Bids are due before December 20th and $300 – $350 MM is expected from this alone.”

“The rare intellectual-property portfolio sale,” writes Reuters’ Alastair Sharp and Nadia Damouni, “is part of bankrupt Nortel’s auction of assets, most of which have already been sold.

“Sources expect the sale to draw wireless telecom newcomers Apple and Google, which want to build up patent war chests as they fight incumbents such as Nokia, which want to protect their patent positions, in the courts.

“‘There has been one round of bidding on those patents, this has been completed,” said one source, who declined to be identified because the process is private. ‘And what Nortel has done is divide the patents up into different lots covering different kinds of technologies.’

“Nortel, which filed for bankruptcy protection in January 2009, holds more than 4,000 patents that analysts say are worth more than $1 billion in total. Two sources with knowledge of the auction process say they have been grouped into six “buckets” of related technologies and that final bids are due within weeks.

“Nortel declined comment, saying the process is confidential.”

Swedish network equipment maker Ericsson bought most of Nortel’s North American wireless operations, which includes its multi-service switch business.

Stay tuned for further updates.

Illustration source: life.com


%d bloggers like this: