mannerisms

Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.

Is Patent Boom Bust?

Has the patent boom burst? Kodak is looking for $2.6 billion for its imaging patents. Offers have ranged from $150 million to $250 million.

Apple, teamed with troll Intellectual Ventures, is said to be one bidder.

 

Google, teamed with anti-troll RPX, is the other bidder.

 

RPX, founded by ex-IV people, is a patent aggregator and licensor which defends people against lawsuits brought by trolls.  RPX says it will never launch a lawsuit of its own.

 

Kodak’s patents are up for sale because the company is bankrupt.

 

At the height of the Great Patent Boom, Google paid $12.5 billion for Motorola Mobility, following 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.

 

Troll InterDigital indicated that it would sell its patents at which its market cap soared to $3 billion but waning interest has seen a fall in InterDigital’s share price leading to a current market cap of $1.3 billion.

 

Patent trolls cost American companies $29 billion last year, says BostonUniversity.

 

Kodak says the winner of the auction of its patents will be announced on the 13th.

 

But it looks as if the Great Patent Boom has gone the way of Tulip Mania and the South Sea Bubble.

Tags: current market, lawsuits, licensor, share price, trolls

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9 Comments

  1. August 23, 2012 21:05

    >Patent trolls cost American companies $29 billion last year, says Boston University.
    This statement has made waves. It has also been countered:
    http://www.patentlyo.com/patent/2012/08/analyzing-the-role-of-npes-in-the-patent-system.html

  2. Robert
    August 19, 2012 00:42

    Personally I like to call it as I see it, so from my perspective Qualcomm is definitely a troll.
    Until recently their business lived and died by patent enforcement, it is only in the last year or two that semiconductor sales have even been sufficient to fully cover their engineering costs. So their Mcap is based almost solely on their ability to monitorize their IPR.
    Unfortunately strong IPR enforcement robs startups of a path to riches, witness the movement of design startups towards Asia, and this adversely effects the health of the US and European semi industries.

  3. SecretEuroPatentAgentMan
    August 11, 2012 12:26

    If a patent proprietor lurks on purpose until targets are “ripe” for shakedown they can be countered by demonstrating passivity and using estoppel and laches (rules vary between countries). In some cases patents then can become unenforceable.
    The world of IPR is far more complex than ugly trolls against defenceless little guys. In fact there is an enormous register of safeguards for the little guys and third party interests, much of which causes much of the costs relating to patenting process.
    Many in my line of business are familiar with your name, I am sure if you contacted a reputable IPR law firm you would get much useful and balanced information. After all also the patent profession is best served by openness and information. Trouble is few ask any of us before journalists write articles.
    As for boom vs. bust you might look into IPR auction house Ocean Tomo which already some time ago had problems selling IPR so indicators have already been flashing regarding a slowdown.

  4. Reperio IP
    August 09, 2012 10:30

    The generic name for those that monetize patents through licensing, but do not produce products, is “Non-Practising Entity” or ‘NPE”. Trolls are a sub-set that use IP rights to mug those that are do practise the teachings of patents.

  5. David Manners
    August 09, 2012 10:04

    Indeed Stooriefit, would not a rose by any other name smell as sweet?

  6. Stooriefit
    August 09, 2012 09:20

    IP Guy has a point though … I don’t know these particular companies, but by the definition of “a company which files patents but doesn’t make anything” ARM could be a troll.
    I’m sure there are shades of grey, but the nastiest are the companies which say “We’ve spotted that you have a nice little earner from a product you sunk a lot of money in to, you are infringing patents in our portfolio, please pay X in licensing fees or we’ll see you in court”. When asked for the specifics of what is being infringed these companies typically cite about 5000 pages of ludicrously irrelevant patents (I’m not joking). The weight of documents is calculated so that it costs considerably more in legal fees to get an opinion on these laughable patents than it does to pay the license fee (or ransom) being asked for.
    The best technology licensing companies can produce great steps forward in technology and commerce; can be good for market diversity; can level the playing field between large corporations and innovative start-ups; and can work against companies developing monopoly positions. The worst just stick a gun to your head and say “give us your profits, or we’ll take your livelihood”. It is their mode of operating which dictates where they are on the scale of highwayman to knight-errant.

  7. IP Guy
    August 09, 2012 08:58

    You didn’t invent the term, you just applied it incorrectly. InterDigital makes modem cores and chip modules, they make gateway and server protoypes, and they make software solutions for global mobile operators to manage their networks. They recently made their Smart Access Manager client available for both iOS and Android phones. InterDigital has members that actively participate in the standards setting process with the 3GPP. Additionally, they are partners with several firms and collaborate on many different products in these joint ventures.
    Yet even if they didn’t make a single “product” they would still not fit an educated definition of the term “Patent Troll”. There are obvious variations in how people define the term, but even Dictionary.com gets it right. They define a patent troll as follows:
    “a company that purchases a patent, esp. from a bankrupt firm, and then sues another company claiming that one of its products infringes on the purchased patent”
    Well, InterDigital patents their own inventions. And they prefer to license their technology as opposed to taking legal action, although like many NPEs, they often do enforce their IP rights through litigation. They should be considered a pioneer, not a troll. No different than Quaclomm in that regard — at least when focusing on R&D and monetizing inventions & ignoring the obvious differences in success and other business segments.
    I could use several politically incorrect terms to describe people of different races and ethnic backgrounds. Just because these words exist doesn’t make it right to use them. As an education individual, I can’t claim ignorance. So I either choose to label myself as a bigot, or refrain from poor word choices.
    It’s ultimately your choice to determine how to label anyone or any organization. But before you do, you might want to poke around and get all the information first.
    http://www.patentlyo.com/patent/2009/03/what-is-a-troll-patent-and-why-are-they-bad.html
    http://www.investopedia.com/terms/p/patent-troll.asp
    http://www.engadget.com/2012/06/14/interdigital-bill-merritt-interview/

  8. David Manners
    August 09, 2012 08:17

    Well IP Guy, I didn’t invent the word. I assume it means a company which files patients but doesn’t make anything. Which would mean it doesn’t apply to Qualcomm or Microsoft but does apply to InterDigital until they make things.

  9. IP Guy
    August 09, 2012 06:55

    It’s hard to take someone seriously when they just slap the “troll” label on any company that tries to monetize their patents. InterDigital has created their own patents for decades and decades. They had the first broadband CDMA system, they helped develop TDMA wireless, and they have contributed much technology to current 3G wireless systems. And they did this with their own engineers and their own R&D.
    To call them a troll is ludicrous. Is Qualcomm a troll? They invent their own technology and collect on their patents. Microsoft makes $10 per android phone… does that make them a troll, too? Seriously, the phrase “patent troll” is a nasty word to call a legitimate inventor. Just because a company is small in size or isn’t a household doesn’t make them a de facto troll. Someone like Acacia or Intellectual Ventures that is a patent aggregator — yes, they might fit the criteria for being a troll.
    But someone who invents great technologies that the entire world uses? They aren’t a troll. And to call them that seriously hurts your credibility to speak on wireless patent matters.