While there’s been a feeding frenzy at Kodak, with a group of tech’s heavy hitters grabbing patents at fire sale prices, Ericsson has been busy making a deal with a troll to do their dirty work for them.
In the later case, the troll is Unwired Planet, a company that at one time, as Openwave Systems, was a major player in the mobile software world, credited with pioneering the Mobile Internet and being the original developer of HDML, a precursor to WML. Nowdays it appears as if the company has morphed into troll territory, having shed itself of most, if not all, of its software offerings to concentrate on licensing and enforcement of its portfolio of patents.
It’s into these waters that the Swedish telecommunications giant, Ericsson, has tread, offering up to Unwired Planet somewhere around 2,000 patents, with more to come on an annual basis.
According to a report published yesterday on Rethink Wireless:
“The deal boosts Unwired Planet’s patents portfolio from 260 to over 2,000 assets, many related to cellular technologies including LTE. Ericsson will also contribute 100 additional patents per year to the company from 2014 to 2018. The agreement covers 1,922 issued patents and 263 applications covering technology used in ‘telecommunications infrastructure including signal processing, network protocols, radio resource management, voice/text applications, mobility management, software, hardware and antennas.’ Of the 1,922 issued patents, 753 are filed in the US.”
Although most media headlines have made the deal look like a straight forward sale, it appears to be more of a partnership between the two companies in which Unwired Planet’s job is to do the heavy lifting. Forbes explained the deal this way:
“Unwired Planet will pay Ericsson a cut of the license revenue it generates from the portfolio, including 20% of the first $100 million; 50% of revenues between $100 million and $500 million; and 70% for amounts above $500 million.
“The deal notes that in a change of control at Unwired Planet, Ericsson will have the right to terminate the deal and receive a cash payment…or not.”
There is little doubt that this action will have a negative impact on the tech sector that will go beyond mobile. In September, Unwired Planet filed suit against Apple and Google, claiming the two companies were infringing about twenty of the two hundred patents the company then held. The claimed infringements weren’t all associated with mobile or mobile devices. Apple was cited for infringement in its cloud messaging services and Google was cited for a host of infringements that included Google Maps, Google Street View, Google+ and more.
Rethink Wireless indicated that the deal between Ericsson and Unwired Planet has probably been in the works for at least a year:
“A year ago, Ericsson appointed its first head of intellectual property, Kasim Alfalahi, with a remit to increase revenue from patents above the 2010 level of around €532m [$707 million U.S.].”
Although it’s too soon to know where this is going to go, I think we can safely assume that Google and Apple will certainly be targets of more patent blackmail from Unwired Planet. I also wouldn’t be surprised to see some Android handset makers come under fire–time will tell. All I know for certain is that this will prove to be an escalation of the ongoing patent wars that are costing too much money and crippling innovation.
The patent wars are also why it wasn’t surprising to see a group of tech’s heavy hitters stepping up to the plate to purchase 1,100 Kodak patents. The onetime film giant is hoping to use the money from the sale of these patents to restructure and emerge from Chapter 11 bankruptcy protection. How much of a help this will be is in question, as the $527 million the patents fetched was much less than the Rochester, New York based company, and the bankruptcy court, had expected, said Stephanie Mlot in an article published Monday on the PC Mag website:
“Kodak originally hoped to take home $2 billion. As a result, Judge Allan Gropper of U.S. Bankruptcy Court in Manhattan called the deal ‘disappointing.’ …
“The sale of 1,100 Kodak patents is expected to help the company pull itself out of bankruptcy in the first half of 2013. The patents include 700 related to digital camera LCD viewfinders and 400 for image capture and manipulation and network-based services.”
Any Oklahoman horse trader would understand why Kodak was unable to fetch a decent price for their portfolio. They were hungry and had to make the sale to survive and everybody knew it–never a good way to keep the upper hand in a deal.
The group acquiring Kodak’s patents reads like a Who’s Who of the tech world. Headed by the big three of Microsoft, Apple and Google, the group also includes Adobe, Research In Motion, Samsung, Fujifilm, Facebook, Huawei, Shutterfly, and units of Amazon and HTC.
Kodak, which was last profitable in 2007, announced in August that it was selling all but the motion picture aspect of its photographic film operations. The company plans to move forward by focusing on consumer photograph printers, high-speed commercial inkjet presses, workflow software, and packaging.