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Unwired Planet Inc. (NASDAQ: UPIP) has been one of the hottest small-cap stocks so far this year. Since the start of 2013, this stock has gone up over 80 percent. This is a bit of a mystery because Unwired really hasn't done anything that would justify this price increase.

Before diving into this recent stock news, let's take a quick look at Unwired's history first. This company has been one of the pioneers of mobile Internet technology. Unwired developed some of the first programs for mobile browsing and photo-messaging as well as the very first Wireless Application Protocol (WAP); the program that connects a phone to the Internet. Today, many of the major phone companies like Sprint (NYE: S) and Telus (NYSE: TU) use technology based on Unwired's inventions. With such important products, why isn't Unwired Planet a huge success? Well, while this company developed these technologies, it hasn't been able to patent them.

As a result, Unwired isn't making much money off its past work and has a pretty ugly looking balance sheet. The company is bleeding money, has seen its revenues fall 40 percent since last year, and has negative operating and profit margins. During the tech bubble, this stock was trading at a high around $600 a share while today it is a mere $2.21 a share. Still, $2.21 represents a big jump over where it was just a few months ago. Given how grim things look, what motivated investors to start buying into Unwired Planet? While no one knows for sure, a market rumor is that a major tech investor like Mark Cuban is moving into this company. Since this is such a small company, it doesn't take much to move the price up.

This could have something to do with Unwired's new strategy for the future. Over the past few months, Unwired invested in collecting the patents of its old inventions, the ones that are the heart of mobile technology. Over this time, Unwired collected over 200 patents and is in the process of obtaining several more. They could be trying to copy the same legal strategy of Vringo Inc. (NYSE: VRNG), another small-cap technology company. After collecting its old patents on Internet technology, Vringo sued Google (NASDAQ: GOOG) for patent infringement. This case is still in court, but if Vringo wins, it could win hundreds of millions of dollars, essentially doubling the size of the company. With such major firms using Unwired's technology, it wouldn't be out of the question for it to receive similar sized settlements in the near future. The investor or investors buying up shares might have the exact same idea.

At a first glance, Unwired would seem like a company to stay far away from. However, if it ever gets its patents to court, the upside potential could be huge. Keep an eye on the Vringo lawsuit. If Vringo ends up winning, Unwired could be due for some very good news as well.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.