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InterDigital fails to find buyer

Will focus on boosting licensing revenues from its core patents while finding partners or buyers for some portfolios


Published: 25 January, 2012

READ MORE: M&A | InterDigital | Patents/IPR

There may be a patents goldrush going on in the wireless industry, but at least one giant IPR holder has failed to cash in. InterDigital has abandoned its plan to sell the company on the strength of its patents, and will instead focus on its licensing business.

The company kicked off a strategic review six months ago and made it clear it was open to takeover bids, and several patent hunters, including Google and Apple, were rumoured to be seriously interested. However, no offer materialized, amid reports that firms were offering low prices. Then, Google's decision to buy Motorola Mobility effectively removed it from the race.

So the company will now investigate other options. These could include finding a buyer or partner for elements of its IPR portfolio. The firm said in a statement that it had identified "potential opportunities to further enhance value through targeted sales and/or partnering arrangements involving portions of our large and growing patent portfolio." Its "strong and largely unlicensed mobile infrastructure patent portfolio ... could generate significant third party interest in terms of a sale or licensing partnership" and a "substantial number of 3G and LTE terminal patents that are not necessary to drive our core terminal unit licensing business could be of significant interest to third parties, again in terms of sales or licensing partnerships."

In the meantime, its main efforts will concentrate on licensing its 19,500 patents and applications related to cellular technologies.

Announcing the change of heart along with its preliminary Q4 results - with net income of $21m on revenues of $74.2m - InterDigital said it now planned to base executive compensation around the goal of achieving at least $800m in recurring annual licence revenues within 3-5 years. It added that it had filed 140 new US patent applications in 2011 related to next generation wireless networks, and had, to date, received almost $3bn in royalties from 2G and 3G licences.

Chairman Terry Clontz said in a statement: "The process over the past six months, although not resulting in an offer for the whole of the company, has helped to reaffirm our belief in the breadth and depth of the patent portfolio, the strength of the R&D team, and our technology vision for the future."

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