InterDigital appreciates 50% as Apple and Google said vying for patent trove; InterDigital sues Nokia, Huawei, ZTE

“Patents are becoming so valuable that Apple Inc. and Google Inc. may have to pay a 50 percent premium to buy InterDigital Inc., even after a decision to put itself up for sale sparked a 72 percent jump in the stock,” Danielle Kucera, Zachary Tracer and Rita Nazareth report for Bloomberg.

“InterDigital, whose engineers invented some of the technology for high-speed mobile phone networks now used by the world’s biggest handset makers, has gained $1.4 billion since saying last week it hired banks to explore options including a sale,” Kucera, Tracer and Nazareth report. “The $3.2 billion company, based in King of Prussia, Pennsylvania, may cost more than $5 billion, Algorithm Capital and Dougherty & Co. said. That would be the most expensive deal in the wireless equipment industry relative to earnings in more than a decade, according to data compiled by Bloomberg.”

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Kucera, Tracer and Nazareth report, “Apple and Google are vying to obtain exclusive rights to the inventions used in almost every device from the iPhone to Google’s Android-based handsets and Research In Motion Ltd. (RIM)’s Blackberry as smartphone demand is forecast to more than double by 2015. Owners of InterDigital, worth just $1.2 billion a year ago, now stand to profit from the company’s 8,800 patents after Google lost a bidding contest last month for bankrupt Nortel Networks’ licenses. A group including Apple agreed to pay $4.5 billion — a fivefold increase from Google’s initial bid.”

“About 15 percent of InterDigital’s patents are related to mobile-phone technologies used to transfer information,” Kucera, Tracer and Nazareth report. “They may be worth more than those Nortel auctioned in June because it has more fourth-generation wireless technology patents, Charlie Anderson, a Minneapolis-based analyst at Dougherty, said in a telephone interview. Parts of its portfolio also haven’t been licensed, leaving more control to the buyer, he said… Apple and Google are among the companies weighing bids for InterDigital, according to a person with knowledge of the situation, who declined to be identified because the matter is private.”

Much more in the full article here.

Florian Mueller reports for FOSS Patents, “One week after putting itself formally on the selling block in the current mobile patent buying frenzy, mobile patent holding and research company InterDigital LLC today announced an ITC complaint and a companion (mirror) federal lawsuit in the District of Delaware against Nokia (with which InterDigital is still embroiled in litigation that started years ago) as well as Chinese device makers Huawei and ZTE.”

“Having looked at the complaint, I believe that InterDigital wants to demonstrate that it holds patents that it declares essential to a host of 3G-related standards,” Mueller reports. “This approach would make sense for InterDigital with a view to the objective of signing license deals with the defendants, but in the current situation the complaint may also be a statement directed at potential acquirers.”

Much more, including the asserted patents, accused products, and the standards to which the patents-in-suit are allegedly essential, in the full article here.

Related articles:
In wake of Nortel patent auction loss, Google general counsel calls for patent reform – July 26, 2011
Apple paying more than half $4.5 billion price tag on Nortel patent trove – July 22, 2011
Apple, Google gird for bidding war over InterDigital patent trove – July 20, 2011

16 Comments

    1. Apple is not looking to become a monopoly, nor would these patents give them that. What the patents would give them, is negotiation leverage to prevent extortion from other companies. They don’t want another company pulling a Nokia on them.

  1. This patent stuff is really getting out of hand – so much money spent for “intellectual property” monopoly rights granted at the clueless whim of the USPTO.

    Google is wrong on a ton of things, but the one thing they’re right about is that our patent system needs some serious reform. Just think how much more Apple could afford to do if they weren’t forced to pay patent trolls like Lodsys for rights to in-app purchases – how does such a patent help drive innovation, exactly? And think about the indie apps we’ll potentially lose to patent trolls, too.

    We need a patent system which properly rewards true innovators like Apple, not trolls like Lodsys or copy artists like Google.

    1. Google is never serious about patent reform but its intention is to eliminate all forms of patent so that it can steal with impunity. Google innovates on the best method of hijacking and thievery.

    1. $5 billion here, $5 billion there, and suddenly Apple’s not in such a great cash position after all. And all to spend on patents which have a limited lifespan anyway.

      1. Really think that, the payoff is more then none and with almost 78 billion in cash reserves Apple can buy theses and not even miss it.

        Are you aware that Apple makes that 5 Billion in no time, think about it, the interest on the Billions they have would purchase these patents, yes the interest alone.

        Apple will purchase these, and be sure that they won’t let Google touch them, they need the 4G tech as barter.

        Googles two faced do no evil, then wants to purchase patents then they lose the patents and cry that it’s unfair and patents are no good.

        Do you see any Googles patents assigned as “use for all”, you won’t because they are a bunch of shady crooks that have gotten caught more then once using others IP without consent.

  2. Apple have over US$76 billion “in the bank” but it does not mean Apple should waste it on things like stock buy back, dividend, buying up patents everywhere and etc…

    I think what Apple should do is wait for the “right moment” to scoop up patents from RIMM, Nokia, Eastern Kodak, and others.

    Apple already own an extremely valuable set of 4G/LTE patents from Nortel. In a not too distant future (within 2 years timeframe), almost every smartphone manufactures on this planet will have to pay Apple loyalty on any thing require 4G/LTE. BTW, Apple has been granted most of, if not all, smartphone’s gesture based patents. Surprisingly, as far as I know, Apple has yet to make any serious move to sue phone manufactures on gesture related patents.

    my 2 cents…

  3. The problem is not that patents exist — they must. The problem is time and use.

    Solution: if someone creates an idea the patent system must protect that idea from abuse for 5-10 years only and they must give evidence of creating a viable product based on that patent. If one or both of these is not met, and the patent-holder does not want to licence the patents, then they should be forsaken.

  4. What I find insane, is that someone can be awarded a patent for a one-click purchase button or a button to upgrade or unlock an app, and have that patent enforced, yet a company that spends a lot of R & D money developing new mobile hardware and an entirely new mobile OS can have their innovations and designs ripped off. Not only have their OS ripped off, but also given away to their competitors as an open-source OS.

    How the hell does this happen?

    I’m all for innovation. I’m fine with patents being granted, it rewards companies for their hard work and R& D. That said, the patent office needs to use some common sense when awarding patents for crying out loud. the patent system as it stands now is in shambles and desperately needs a full overhaul.

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