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Before the door closes on 2011, investors might learn the fates of various technology patent portfolios that have been for sale for months, notably from Eastman Kodak as well as the whole of InterDigital.
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After seeing how trustees of bankrupt Nortel Networks scooped up $4.5 billion from a sale of wireless patents to a syndicate headed by Apple that also included Research in Motion, Ericsson, Sony, EMC and Microsoft in June, wireless communications developer InterDigital called in the bankers.
Since then, shares of the King of Prussia, Pa.-based engineering company have been flat, although during July and August, they nearly doubled. InterDigital is now valued around $1.95 billion, with enterprise value of $1.45 billion.
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"We should expect a frenzy in patent sales," Jefferies analyst Peter Misek told International Business Times, because the proliferation of smartphones and tablets is making enabling technologies more valuable.
Kodak hired Lazard to auction a package of about 1,100 patents in late July and still hasn't announced a winner. The Rochester, N.Y.-based photography specialist was hoping to bring in as much as $3 billion from the sale, which CEO Antonio Perez thought would interest the same companies that bought Nortel's intellectual property.
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More recently, Kodak in October licensed some of its large-screen imaging patents to Imax, the Canadian developer of big-screen theaters for an initial $10 million but with more coming over an 18-month period.
The principle is that old companies often have very valuable ideas and IP which they don't know how to capitalize, so selling them to a newer one makes sense and keeps shareholders happy, IP bankers explain.
The whole "land grab" may have been set off in last year's fourth quarter when networking pioneer Novell, at one point headed by Google's Executive Chairman Eric Schmidt, auctioned itself to Attachmate for $2.2 billion, then sold a batch of 882 patents and other technology IP to Microsoft for $450 million. Attachmate is a vehicle controlled by private equity giants Thoma Bravo and Francisco Partners.
Several other companies have hired investment banks or specialists in IP such as Chicago's Ocean Tomo or MDB Capital Group in Santa Monica, Calif. and held less-publicized sales.
That's one way Google acquired a sizeable bunch of patents from IBM for an undisclosed amount before announcing its $12.5 billion bid to acquire Motorola Mobility for its 17,000 patents and hardware.
Selling patents and IP is a more cost-effective and cheaper way than a lawsuit, S. Gregory Boyd, a patent lawyer with Davis & Gilbert in New York told International Business Times.
"Peace is always better than war," in technology IP, Boyd told IBTimes. It's also cheaper, because each lawsuit for just a single patent may cost as much as $3 million.
Naturally, companies with big warchests, like Apple, which reported $81.5 billion in cash and investments last quarter, are masters of the IP lawsuit. Once close to Apple, then-Google CEO Schmidt resigned as an Apple director once patent litigation heated up over Apple's iOS and Google's Android OS.
Now, Apple has filed scores of lawsuits against rivals alleging IP infringements, notably including its biggest rivals in tablets such as Korea's Samsung Electronics. In venues such as Germany, Samsung has been temporarily enjoined from shipping its Galaxy Tablet which Apple claims infringes on iPad technology.
Next week, the U.S. International Trade Commission is scheduled to rule in a similar case Apple brought against Taiwan's HTC. Once a small player, HTC sold about 25 percent of U.S. smartphones in the third quarter, estimates Canalys, a market researcher, more than Samsung's 21 percent.
The ITC, if it favored Apple, could bar HTC from U.S. imports and theoretically bar Samsung and other foreign Apple rivals from the country.
Shares of Apple, the world's most valuable technology company, closed Wednesday at $389.09, giving it a market capitalization of $361.6 billion. Shares of Asian rivals including Sansung Electronics, HTC and ZTE don't have ADRs on U.S. markets.
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