Is the Great Patent Boom over? Wireless patent troll InterDigital’s bid to sell itself seems to be failing.
Google’s $12.5 billion bid for Motorola Mobility, following on the $4.5 billion sale of Nortel’s patents, and the $9 billion valuation put on the value of Alcatel’-Lucent’s 18,800 patents got the board of InterDigital all excited about the prospects of cashing in on its 1,300 patents.
Before any bid for InterDigital was made, the company’s share price shot up to give it a market cap of over $3 billion – a figure which has little to do with InterDigital’s revenue generating abilities of under $70 million in Q2.
However, waning interest has seen a fall in InterDigital’s share price leading to market cap of $2.6 billion at the end of last week and $2.3 billion yesterday.
Reports say that bidders are offering $1-2 billion for InterDigital. A ‘large Asian mobile device company’ (Samsung locked in lethal legal battle with Apple?) is said to be a bidder.
The problem with the high values being put on patent banks is that no one expects the buyers of these patents to use them in productive ways to create new products.
They are simply being bought as a defensive ploy in the increasingly bitter mobile industry lawsuits.
Many good ideas encapsulated in these patent banks are likely to be left unexploited, and the huge sums spent to buy the patent banks will leave companies with less to spend on improving their products.
So if the perceived value of these patent banks falls, it will be a good thing for the wireless industry.