Apple (AAPL), Microsoft (MSFT), Sony (SNE) and Research in Motion (RIMM), among others, recently combined to outbid Google (GOOG) in an auction for a cache of 6,000 Nortel wireless patents. The patents cover data networking, optical, voice, semiconductor and wireless concepts that include 4G long-term evolution technologies. The auction price was $4.5 billion and won Canadian and U.S. approval through a joint hearing on July 11.
Recently, large holders of wireless patents have developed swapping arrangements with one another, where instead of paying to use another’s technology they choose to barter licensing rights. Google has sought out patents and licenses to participate with the traditional wireless competitors. Oracle Corp (ORCL) is suing Google for alleged infringement related to Sun patents. Additionally, Apple and HTC are presently battling before the ITC, with Google’s Android OS on HTC's side.
The ITC is also considering Eastman Kodak (EK) claims against Apple and Research in Motion, filed in January of 2010, complaining that the iPhone and some Blackberrys infringe on a Kodak patent for viewing images. Kodak settled similar patent disputes with LG Electronics Inc in 2009, and Samsung (SSNLF.PK) in 2010. These remaining "royalty obligations" could each be worth several hundred million dollars, or more, per additional manufacturer.
Kodak announced that it is looking into the sale of over 1,000 digital-imaging patents to raise money for operations, and noting the high present IP interest. Presently, Kodak is valued at about $650 million, is not profitable and has been in decline. It appears that Kodak wants Apple to buy its patents, or sell them to a competitor. Google could do well to capture these patents before Apple or another competitor does. Both Google and Apple appear to have the available cash to purchase Kodak's imaging patents, and the potential use of the technology directly or in swaps. It won't be long before some powerhouse announces their interest.
Disclaimer: This article should not be construed as personalized investment advice as it does not take into account your specific situation or objectives. I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
