Ericsson offloads patents to Unwired Planet
Fees will depend on level of revenue the former Openwave generates, as USPTO seeks greater transparency on trolls
Published: 14 January, 2013
Unwired Planet, formerly Openwave Systems, is transforming from a mobile software provider to a firm driven primarily by patent licensing, as that business gains in revenue potential, as well as litigation risk. The company has acquired a portfolio of nearly 2,000 patents from Ericsson, which could help it in legal tussles with Apple, Google, RIM and others.
The deal boosts Unwired Planet's patents portfolio from 260 to over 2,000 assets, many related to cellular technologies including LTE. Ericsson will also contribute 100 additional patents per year to the company from 2014 to 2018. The agreement covers 1,922 issued patents and 263 applications covering technology used in "telecommunications infrastructure including signal processing, network protocols, radio resource management, voice/text applications, mobility management, software, hardware and antennas." Of the 1,922 issued patents, 753 are filed in the US.
Such transactions are increasingly common, and controversial, as large IPR holders offload key patents to generate immediate cash and, usually, ongoing fees - and also to participate in the patent wars from a distance. In the Ericsson deal, Unwired Planet will pay the Swedish giant on a sliding scale depending on the revenue that it generates from the patents, which critics fear will encourage attacks on other suppliers, further disrupting and distracting the industry. Unwired Planet will pay Ericsson 20% of the revenue from the assets until it hits $100ml plus 50% of the amount of revenue in excess of $100m, until the figure reaches $500m; plus 70% of any amount over $500m.
A year ago, Ericsson appointed its first head of intellectual property, Kasim Alfalahi, with a remit to increase revenue from patents above the 2010 level of around €532m.
Google last year filed a complaint with the EU claiming Nokia and Motorola are hiding behind patent trolls in the litigation wars, using third parties as proxies by transferring contentious IPR, although the real concern is about shell companies, not partnerships with bona fide patent businesses like Unwired.
Meanwhile, the US is seeking to bring greater transparency to patent laws. It is holding a round table meeting with technology and other IPR majors, including Google, to discuss possible new rules for 'real party in interest information'. Such regulations could make it more difficult for patent holders to conceal their ownership, and to switch their IPR around between shell companies or trolls. They could also force large companies to disclose acquisitions of patents, or transfers in ownership, where this would not currently be necessary.
"A patent is an agreement between a company and the US government," said Michael Rappaport, a founder of patent analysis firm IP Check-ups. "The public has a right to know" about patent ownership, he argued.
"A more complete ownership record [of patents] would produce a number of benefits," the USPTO said in the Federal Register, as "the public would have a more comprehensive understanding of what patent rights being issued... are being held and maintained by various entities." Also, financial markets would be able to value intellectual property better, and inventors could have more clarity on their competition, the USPTO added.