If the bidding for Nortel's 6,000 patents---$4.5 billion in cold hard cash---and Google's patent-happy $12.5 billion purchase of Motorola Mobility stretched intellectual property valuations just wait for what's in store.
Simply put, any company with a significant technology patent portfolio will be in play. The patent arms race is on and now the valuation for patents has been set at "ridiculous" cash-rich companies have the go-ahead to gobble up portfolios that would have tanked stocks just a few years ago.
Let's round up the latest indications that we're in a patent valuation bubble.
- Reuters reports that Apple and Qualcomm are eyeing InterDigital Inc. for its patent portfolio. Never heard of InterDigital? You’re not alone. Of course that doesn't matter InterDigital has wireless patents. Back up the Brink's truck kids.
- Bloomberg reports that Kodak's patent portfolio could fetch $3 billion or so. Shares of Kodak surged---for once. The stock chart is still a disaster though.
And I thought HTC's $300 million purchase of S3 was a bit of a stretch. Silly me.
Kodak's claim to fame is a bevy of digital imaging patents. These patents are at play in every smartphone given that the devices double as cameras. From Kodak's perspective, the patent valuation bubble couldn't have been better timed. The company wants to monetize its patents to cover its cash flow burn.
At this point everything patent looks great as technology companies stock up on intellectual property that could be used to sue or fend off a lawsuit. This frenzy would be comical if it weren't such as waste of the balance sheet.
Related patent items: Software patents: Lots of whining, but reform unlikely
- IBM: Google's best patent pal?
- Microsoft, Apple part of consortium that wins Nortel patent bid
- Google's $12.5 billion Motorola Mobility bet: 6 reasons why it makes sense
- Google and Motorola Mobility: It's all about the patents
- CNET: Google's Motorola bid shrinks mobile patent supply
- Google just bought itself patent protection