In IBM's Complaint to Twitter Leads to Patent Purchase, Susan Decker reports Twitter settled a dispute over three patents with IBM, signed a cross-license, and agreed to purchase 900 IBM patents. Twitter says it will "gain access to new technology and build a defense against infringements suit."
In a world that prizes massive patent portfolio's Twitter had just nine patents and 95 applications. Twitter danced around the issue by seeking to get the industry to transfer control of patents to employee-inventors to put an end to the patent war, but not much happened. I don't think people wanted to give up their patent rights. See Twitter Innovator's Patent Agreement - Unlikely Adoption. Anyway, Twitter has a new patent strategy.
Would Twitter have done better to pursue a strong patent position going into the IPO? It is impossible to know and it may not matter since Twitter stock has remarkably increased from $44.90 at IPO to $64.50 on January 31, resulting in a market capitalization of $35.8 billion. Twitter doesn't need to seek its own patents to catch up, it can purchase 900 IBM patents. IBM knows how to make patents available when you "need" them. See Facebook Buys 750 IBM Patents - Call to Arms. Time will tell how much the IBM patents relate to Twitter, but some appear to be tangential (e.g., protecting semiconductor chips from damage). One thing appears to be certain on this confidential agreement Twitter has joined the ranks of companies owning NPE patents.
Thanks to Alan Snyder for passing the above article and the one below my way!
Updated on March 7: Twitter Paid $36 Million for IBM Patents, which = $34,000 per patent or application when you ignore the nine patents Twitter owned in the cross-licensing transaction.
Copyright © 2014 Robert Moll. All rights reserved.
Showing posts with label patent purchase. Show all posts
Showing posts with label patent purchase. Show all posts
Saturday, February 1, 2014
Wednesday, July 25, 2012
Google's SEC Form 10-Q Blurs Patent Valuation: Motorola Patents and Developed Technology Valued at $5.5 Billion
When Google announced its intent to buy Motorola Mobility in 2011, Larry Page stated Motorola had a strong patent portfolio capable of protecting Android. The speculation immediately arose Google was acquiring Motorola primarily for its patents to fight the patent infringement suits that Apple had filed against Android hardware manufacturers Samsung and HTC.
Google's Form 10-Q indicates this speculation was not off-base. In the Form 10-Q, Google notes it acquired Motorola expecting it would protect and advance the Android ecosystem. The "it would protect" suggests defensive use of the Motorola patents. One problem is Motorola's SEP will be fairly limited protection as any damages will be subject to FRAND and any injunctions would be unlikely.
Although it's a preliminary valuation, the Form 10-Q attributes $5.5 billion of $12.4 billion Google paid for Motorola to "patents and developed technology." The media somehow has converted this to Google paid $5.5 billion for the patents, but developed technology is not the same as patents. I am not certain why they are lumped together but it does blur the valuation of the patents. If you don't put an exact value on the patents, however, it makes it more difficult to evaluate the ROI, which in turn would allow Google more space with respect to investors to limit the Motorola patents to counterclaims to protect the Android ecosystem. Still Google should consider if a "Microsoft type patent licensing program" is in its own long term interest.
Copyright © 2012 Robert Moll. All rights reserved.
Google's Form 10-Q indicates this speculation was not off-base. In the Form 10-Q, Google notes it acquired Motorola expecting it would protect and advance the Android ecosystem. The "it would protect" suggests defensive use of the Motorola patents. One problem is Motorola's SEP will be fairly limited protection as any damages will be subject to FRAND and any injunctions would be unlikely.
Although it's a preliminary valuation, the Form 10-Q attributes $5.5 billion of $12.4 billion Google paid for Motorola to "patents and developed technology." The media somehow has converted this to Google paid $5.5 billion for the patents, but developed technology is not the same as patents. I am not certain why they are lumped together but it does blur the valuation of the patents. If you don't put an exact value on the patents, however, it makes it more difficult to evaluate the ROI, which in turn would allow Google more space with respect to investors to limit the Motorola patents to counterclaims to protect the Android ecosystem. Still Google should consider if a "Microsoft type patent licensing program" is in its own long term interest.
Copyright © 2012 Robert Moll. All rights reserved.
Sunday, June 24, 2012
AOL Decides Stock Repurchase Not Dividend is Way to Handle $1 Billion Patent Proceeds
On June 17, I posted an article here that AOL had expressed a commitment to return 100% of the proceeds from its $1 billion patent sale to its shareholders. Initially, I thought that's a real gain for shareholders whose stock has dropped about 20% in the last five years. Later I read the dividend may have been prompted to appease the hedge fund Starboard Value that pushed for the patent sale.
Ten days after AOL reelected eight directors it announced a stock repurchase not a dividend is the best way to handle the patent proceeds. CEO Tim Armstrong's timing seems to have outfoxed Starboard Value which pushed for a board seat and the dividend. Some speculate Starboard Value will sell its AOL shares (about 5% of that outstanding) now that AOL has decided to not distribute the dividend.
If you are interested in the details, I recommend reading All Things D Kara Swishers article: AOL Will Start Paying Out Its Pile-O'-Patent-Cash to Shareholders This Week Via Stock Buyback.
Copyright © 2012 Robert Moll. All rights reserved.
Ten days after AOL reelected eight directors it announced a stock repurchase not a dividend is the best way to handle the patent proceeds. CEO Tim Armstrong's timing seems to have outfoxed Starboard Value which pushed for a board seat and the dividend. Some speculate Starboard Value will sell its AOL shares (about 5% of that outstanding) now that AOL has decided to not distribute the dividend.
If you are interested in the details, I recommend reading All Things D Kara Swishers article: AOL Will Start Paying Out Its Pile-O'-Patent-Cash to Shareholders This Week Via Stock Buyback.
Copyright © 2012 Robert Moll. All rights reserved.
Subscribe to:
Posts (Atom)