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IP Assets Need a Better Marketplace

|Includes: International Paper Co. (IP), OTP

Intellectual property is an asset and often a valuable one at that.  Just ask Nortel which recently went belly-up but its intellectual property was gobbled up for well over $1 billion.  The beneficiaries of such an asset fire-sale were Avaya, Nokia, Research in Motion and Siemens, among others.  However, Nortel was a special case where the company was clearly in distress and made it known that they wanted to sell their entire portfolio of over 4,000 patents to the highest bidder. A blog published by Intellectual Asset Management Magazine details a recent occurrence involving Micron Technologies and their intellectual property and patents.  It appears that the company has sold a substantial portion of their IP assets to an NPE, but has notIntellectual Property rights disclosed the terms with shareholders.

I then started to wonder about the sales process that saw Desmarais secure the patents, especially as the company's shareholders never seem to have been told that it had happened and the portfolio represented around 20% of the patents and related assets Micron owned. Given that number and given the quality of the portfolio, surely the sale price should have been high enough for it to be a material event. If it wasn't, had something gone wrong with the sales process so that the sum raised did not reflect the portfolio's value? And if that were the case, shouldn't shareholders want to know? -- Why Micron matters 7/7/2010
The company has made little to no effort to inform shareholders of the value of the transaction which may suggests that the price was deemed insignificant.  However, it should still have been reported to shareholders that one-fifth of Micron's patents are no longer under their control. At GATE, we see this as more evidence that a more transparent and liquid market for alternative assets such as IP and patents is so desperately needed.  It would have made bidding for Micron's assets more competitive and would likely have demanded some sort of recognition of the sale from management in the form of a press release.  For Micron, we see no reason that they should not manage the company and its assets in whatever way they see fit, but they should also be forthcoming with investors wherever possible.  In this case, it appears that they fell short.

Disclosure: No positions