From the monthly archives:

February 2012

Yahoo! & Facebook spat part 2–not so unusual but $3bn?

by Andrew Watson on 29 February 2012

Amongst the comments about the licensing approach by Yahoo! to Facebook, this one catches the eye on the Forbes.com blog suggesting that Yahoo! should insist on a license fee of $3bn from Facebook, worked out by the simple maths of take Nortel’s inflated patent portfolio value by reason of the strategic interest shown by groups of bidders and MMI’s massively inflated value (when there was one very strategic bidder) and apply those to the Yahoo! portfolio.

It seems every patent story comes with an associated financial story that can only talk in billions of  dollars.

Come on–this isn’t really that unusual as behaviour. Yahoo! is in financial trouble and has a relatively large and mature patent portfolio but no real history or reputation of being aggressive. Facebook is on a financial high and has an immature patent portolio (therefore, likely, little to fight back with). Yahoo!s CEO and executive management will be looking for every opportunity to boost cash and value (naturally) and it should be expected that every part of the organisation will be asked to contribute. 

“We do have these patents” says the IP group…”they’ve not been previously litigated, but if you look at companies like Acacia and IV, they make money by waving them at companies at  a moment of vulnerability like an IPO…it’s not what we have done before but if you’re looking for hidden value we could try….it wouldn’t cost that much to try….”

 If not monetised when needed, what value does the patent portfolio have to Yahoo!? The answer is little, it is a cost centre not a profit centre. So Yahoo! quickly appears to move up the IP value ladder by apeing a troll. At what price to its corporate reputation is not really questioned.  

And how to monetise quickly? Answer. Join the long list of people trying to financially benefit from Facebook’s IPO by publicly approaching Facebook and threatening litigation if Facebook doesn’t settle. It may just work but may well depend on how long a queue Yahoo! has joined and just how keen Facebook is to take this particular approach out of its prospectus.

I read yesterday that Apple has been the defendant in 242 patent litigation cases. High profile IPO’s will bring these out. There is little that should therefore be seen as unusual in Yahoo!’s approach. The timing is optimum on both sides. 

At anything like the Forbes numbers though (or even a fraction of those) then Facebook has no choice but to fight. If it settles it will be for a small number. Otherwise, it will be interesting to see the Facebook prospectus relegating the Yahoo! approach to one of a large number of litigation threats in progress.

 As a ps to this story, the queue was apparently 22 infringement lawsuits filed against Facebook in 2011. The public data only shows those that were litigated. Many more will have been settled. As we said, Yahoo! may have to take their place in a long line of people. Is there any reason to take this threat any more or less seriously than those chronologically ahead of Yahoo?

As a pps, 2+2 may not equal 5, but we’d be making a small bet that Facebook is now an RPX member, although undisclosed.

{ 1 comment }

Yahoo! and Facebook IP spat

by Andrew Watson on 28 February 2012

It doesn’t take too long for the next high profile IP story to come along with the New York Times breaking the news that Yahoo! has started negotiations with Facebook to license 10-20 of its patents.

Yahoo! had a sophisticated IP team led by Joe Siino, now running his own firm Ovidian with what appears to be several of his old Yahoo! IP colleagues. Facebook, last we looked anyway, didn’t have a dedicated in house IP capability.

Another example of one of the pioneers in a market being asked by its board “so amongst all of this IP we have, can we start using it to generate revenues” and “if not, why not?”.

Interesting that Facebook claims that Yahoo! called the NYT at the same time as it called Facebook. That’s troll behaviour isn’t it?

More to follow.

{ 1 comment }

RPX-Alcatel-closing thoughts for now

February 28, 2012

It would be a little too easy to put a cheap and uninformed boot into the RPX-Alcatel transaction and come out with something negative and contradictory of the analysts reports issued so far. As will be clear, personally I cannot see how the analysts could have come up with their estimates for 2012 incremental revenues based […]

Read the full article →

RPX members-92/112

February 20, 2012

To emphasise the points in the last post, here is a list of the RPX members that we’ve been able to identify by searching the Internet. We have been able to identify 92 of the reported 112. Assuming 3 or 5 year memberships, we don’t believe that any of the 112 will have terminated. How […]

Read the full article →

Will RPX members take up the A-L offer?

February 18, 2012

Digging around since the story broke last week, there are several revenue projections for the 2012 revenues to be earned by Alcatel-Lucent from its transaction with RPX. Bloomberg Business Week reports that four separate analysts have predicted 2012 revenues of over €500m, with the highest prediction at €1bn for 2012 alone These are very big […]

Read the full article →

RPX & Alcatel-Lucent-overnight thoughts

February 16, 2012

Thanks for Fred Logue for pointing me at the RPX earnings call on 13th February, which included a good amount of information on the Alcatel-Lucent transaction. Clearly stated is that A-L initiated the discussion. As a compliment to both sides this is a highly innovative IP transaction. But very hard to predict. RPX downplay the significance […]

Read the full article →

RPX/Alcatel-not so unusual but some good mystery and intrigue for Alcatel to announce

February 15, 2012

Very interesting news announced this week that RPX has signed what appears to be a first, at least the first to be announced publicly,  in a deal to represent the Alcatel-Lucent patent portfolio to its members. I looked for an RPX announcement or release without success. For a PR hungry company, I wonder why not? […]

Read the full article →

Update: Motorola’s Sales Ban overturned by Apple

February 3, 2012

Back in December, Motorola was successful in imposing a sales ban in Germany on iPhones and iPads (with the exception of the new iPhone 4S and the wifi-only iPads) for infringing a Motorola-owned GPRS patent. This patent is deemed essential to the standard for GPRS data transmission, and, as with the 3G standard-essential patent Samsung […]

Read the full article →

Samsung and the EU

February 2, 2012

In my last post I discussed the ongoing litigations between Apple and Samsung, specifically in relation to  standards-essential patents. It has now been announced that the EU Commission has launched a formal investigation into the 3G licensing practices of Samsung and the alleged contravention of the “irrevocable commitment it made to the European Telecommunications Standards […]

Read the full article →