Nokia sells a chunk of patents to Pendrell
US non-practising entity Pendrell Corporation has acquired 125 patents owned by Finnish mobile phone maker Nokia, it was announced on March 25.
According to a Pendrell statement, 81 of the 125 patents are essential to industry standards. The patents cover a range of foundational memory technologies used in mobile phones, laptop computers and MP3 players, including secure digital (SD) cards, embedded flash and universal flash storage capabilities.
The global market for the memory technologies sold to Pendrell has been projected at more than $12 billion in 2013, while industry analysts have predicted the value of SD cards alone to exceed $21 billion in 2018.
Pendrell has created a subsidiary, Helsinki Memory Technologies, Oy (HMT), to continue Nokia’s R&D efforts in Finland. Nokia will receive a licence to all future patents acquired by HMT and any new IP developed by HMT. Any proceeds from patents licensed will be invested in further R&D.
Mario Obeidat, vice president of licensing for Pendrell, said: “The opportunity to acquire technologies as foundational and relevant as those represented by these portfolios is rare.”
“This acquisition represents a unique opportunity to expand our licensing initiatives, as these patents are relatively unencumbered, only a handful of IP portfolios cover these technologies globally, and an established licensing ecosystem is already in place.”
Jan Lindberg, a partner at law firm Magnusson in Helsinki, said it could be argued that large companies are becoming more eager to monetise patent assets that are not within their core assets.
“Drivers behind this trend are not only connected with generating revenue, but also to a need to decrease prosecution or maintenance costs,” he said.
“While a failed patent licensing programme might also turn out to be a very costly exercise, this discussed model could also be seen as one form of ‘hedging’, as the company divesting patent assets typically gains at least some kind of upfront payment. If everything goes well, they might get steady revenue streams in addition.”
He said that the valuations in patent sales and patent-intensive mergers and acquisitions vary, though a valuation of $12 billion seems very high, considering Nokia’s market value of $12.3 billion on the Helsinki stock exchange.
He added: “In Nordic countries, but also to some extent at the global level, smaller players with strategic assets and portfolios are currently preferred over large portfolios.”
