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Ottawa-based patent licensing firm Mosaid has reached a deal with Microsoft and Nokia to manage one of the largest patent portfolios in the world. CEO John Lindgren tells BNN the deal is "transformative."
"We believe the revenues associated with this one licensing program will exceed the revenues combined for the entire 36-year history of our company," he says. "This is a huge deal for us."
According to Mosaid, the company will control approximately 2,000 wireless patents and patent applications originally filed by Nokia. Mosaid will split the revenue from enforcing the patents with both Nokia and Microsoft -- allowing it take in about a third of all revenue.
The announcement comes at a time when Mosaid is facing a hostile takeover from rival Wi-Lan, which Lindgren says "undervalues" the company.
Lindgren says the new patent portfolio won't be automatically handed over in an event of a takeover.
"They have purely discretionary rights to require these patents to be transferred out of Mosaid prior to a change of control if they see fit," he says'
Patents have increasingly come to be seen as a source of value by leading technology companies. Interest in patents was highlighted earlier this year when a consortium led by Apple, Microsoft and Research in Motion Ltd paid $4.5 billion for wireless patents held by bankrupt Nortel Networks.
Google -- after losing out on the auction for Nortel patents -- announced shortly after that it will pay a significant premium to buy Motorola Mobility Holdings Inc. for about $12.5 billion, largely for Motorola's treasure trove of patents according to analysts.
"Patents are being increasingly used for defensive purposes," Dev Bhangui, analyst at Fraser Mackenzie, recently told BNN.
"There used to be a time when people would own the patents and would translate them into revenues for themselves. Now the patents have acquired a strategic importance in terms of defending your own market share by the multi-billion [dollar] companies, like the Googles and the Apples of the world."