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.
Written by Mary Jo Foley, Senior Contributing Editor

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.

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