Microsoft weighs in on Mosaid-Nokia patent deal

Microsoft weighs in on Mosaid-Nokia patent deal

Summary: Microsoft is party to the just-announced deal between Nokia and Mosaid, a Canadian patent licensing firm. The Redmond company has a "passive economic interest," its officials are saying.

TOPICS: Nokia, Legal, Microsoft

In the latest installment of "As the patent world turns," a Canadian patent licensing company announced on September 1 it was acquiring 2,000 of Nokia's patents.

The company acquiring this intellectual property is Mosaid Technologies Inc., a self-described licensor of "patented intellectual property in the areas of semiconductors and communications technologies, and develops semiconductor memory technology."

Mosaid didn't pay Nokia for these patents. Instead, the Canadian company makes its money from licensing patents to others and collecting royalty monies via patent-infringement suits. Mosaid has filed patent suits in the past against Dell, HTC, Sony Ericsson, Research In Motion, Huawei Technologies, Wistron, ASUSteK, Asus Computer, Lexmark, Canon, Canon and Intel, among others, as noted by The Next Web.

Mosaid is splitting the licensing revenues from the deal with Nokia and Microsoft. According to The Globe and Mail, Mosaid's share will be about one-third. (No word on the Microsoft and Nokia percentages.)

The way the deal is structured, according to Mosaid's press release is Mosaid acquired Core Wireless Licensing, a Luxembourg company holding a portfolio of 400 "patent families," including approximately 2,000 wireless patents and patent applications originally filed by Nokia. Core Wireless is going to become a wholly owned subsidiary of Mosaid. The patents and patent applications in question "cover technologies used in a wide range of mobile communications devices and services," Mosaid said, including "1,200 patents and applications, have been declared essential to second, third and fourth-generation communications standards, including GSM (Global Systems for Mobile communications), UMTS / WCDMA (Universal Mobile Telecommunications Service / Wide-Band Code Division Multiple Access) and LTE (Long Term Evolution)."

One of the assets Microsoft secured as part of its wide-ranging deal with Nokia announced earlier this year was access to a number of Nokia's patents, including those covering phone cameras, lenses, hinges and various industrial-design components, Microsoft officials said.

So what's the impact on Microsoft from this week's Nokia-Mosaid transaction?

When I asked, Microsoft e-mailed me the following statement, attributable to Horacio Gutierrez, Corporate Vice President and Deputy General Counsel:

"Over the years, Nokia has developed one of the world’s highest-quality patent portfolios in the mobile phone industry, representing decades of innovation as a worldwide leader in the field.  We are pleased to have secured a license to the Nokia patents now acquired by MOSAID for Microsoft’s products and services. In return, we have a passive economic interest in the revenue generated from the licensing of those patents to third parties. The marketplace for intellectual property is incredibly dynamic today, and this agreement is an effective way to make these Nokia innovations available to the industry and to unlock the considerable value of this IP portfolio."

One effect of the Mosaid-Nokia transaction, according to Reuters, is that it may help Mosaid stave off a hostile takeover bid for the company by WiLan Inc., yet another of these "patent-licensing firms."

While on the topic of patents, a new Bloomberg BusinessWeek story just out this week notes that many of the newer hot tech companies, like Facebook, Twitter, GroupOn and Zynga have next-to-no patents to their names. (In other words, Google's not the only company with a serious patent shortage.) These days, patent ownership increasingly is becoming a necessity so as to insure one's survival in a world gone MAD.

Topics: Nokia, Legal, Microsoft


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • this is outrageous!

    The DOJ should investigate this dirty deal immediately!
    All innovators stand united against this attempt by M$ and its cronies to leverage the evil monopoly:
    The Linux Geek
    • RE: Microsoft weighs in on Mosaid-Nokia patent deal

      @The Linux Geek
      So Google buys MMI basicall for their patents, cuz they know they're crooks and need to do something (which will end up being a bigger waste of money than HP/Palm), but u get mad when MS/Apple knows how to play the game and will end up winning, so u get mad? Wow...Android, buh-buy
      • RE: Microsoft weighs in on Mosaid-Nokia patent deal

        Don't know what you know about business, but after tax savings + cash MMI has on hand, the deal will basically cost Google almost nothing. Much better than paying $4.5 bil for a quarter of the patents.
      • RE: Microsoft weighs in on Mosaid-Nokia patent deal

        @anono I think the big difference here is that MS / Apple got useful patents and Google bought a cat in the bag.
        On another note, Google has been infringing patents left, right and center with Android. Having a neutral standpoint, I dont think its more than logical that somebody gets paid for the things he/she invented. This whole 'patents-war' (if I can call it so) is long overdue.
      • Who owns Nokia

        @reklissrick If there was any doubt before about who owns Nokia, there should be none now. Whoever heard of a patent licensee getting profits from parallel licensees? There is no such thing. Patent licensing does not work that way.

        Mary-Jo is right. This is mutually assured destruction. Non-Practicing Entities (NPEs) like Mosaid are asymmetrical weapons - you can't hit them back because they make no products. The next step is for Motorola to spin off thousands of tiny NPEs in a distributed counterattack. By making them independent entities with their own patents they can overwhelm their victims with legal costs.

        All of these can and will pursue injunctions against products - because they make no products and have nothing to lose.

        And this is how progress dies. With patents - the purpose of which is "To promote the Progress of Science and useful Arts."

        These fools are going to shutdown the entire economy with this nonsense.
  • RE: Microsoft weighs in on Mosaid-Nokia patent deal

    Eh, I'm inclined to think that intellectual property patents are outdated. In fact, I think it's merely a way to leverage huge sums from people, that ultimately harms the overall economy.
  • Brilliant story

    Thanks for the inside track. I was scratching my head when Nokia sold its patents to Mosaid.
  • RE: Microsoft weighs in on Mosaid-Nokia patent deal

    I do have to agree that this is a who-really-runs-Nokia-now reveal.

    It's Microsoft. It was a brilliant acquisition, essentially for $0.
  • RE: Microsoft weighs in on Mosaid-Nokia patent deal

    Microsoft, once an (arguably) great technology company now turned a great law firm. I say great because they honed their skill, with proxy fights and hidden settlements (long filename FAT anyone?) and threats.
    A has-been.
    • RE: Microsoft weighs in on Mosaid-Nokia patent deal

      @fanbaby You may as well include Apple in that group with their
      "Samsung, you have an iPad like device" worldwide lawsuit romp....and Microsoft and Apple went in together on the Nortel patents.
  • RE: Microsoft weighs in on Mosaid-Nokia patent deal

    I am sorry but I must be missing something here.

    What is Nokia getting from Microsoft?

    Nokia's share holders must be asking themselves that very question.

    So far they have a falling share price, a new strategy with appears to put the company over the abyss,

    What were Nokia's board thinking in hiring men from a company that has failed badly in the mobile phone market.

    Nokia is going from a position where it had the highest margins, most advance innovation and leading market share in the industry to one where it will be giving phones away at a loss and sharing it's IP with a company that has a record of flops in the industry.

    What Nokia needs is a hostile takeover.

    Better a quick death than this slow painful one we are all witnessing.
  • RE: Microsoft weighs in on Mosaid-Nokia patent deal

    "Microsoft is party to the just-announced deal between Nokia and Mosaid, a Canadian patent licensing firm. The Redmond company has a ?passive economic interest,? its officials are saying."
    I wonder what ?passive economic interest? really means? I'd like to know whether Microsoft or IV owns any of Mosaid.
  • RE: Microsoft weighs in on Mosaid-Nokia patent deal

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