A Real Deal? Intellectual Property Analysis of RealNetworks
RealNetworks, the company behind Real Player, recently agreed to sell about 190 patents and 170 pending patent applications to Intel Corp for $120 million. Intel announced it was getting “foundational media patents” in this acquisition, but should it have had a “real” look into the portfolio that it is acquiring before it agreed to purchase?
On January 26, 2012, RealNetworks (“Real”) announced it had agreed to sell “a significant number of its patents and its next generation video codec software” to hardware giant Intel Corp for $120 million. As part of the sale, Real still retains “certain rights” to these patents.
First coming onto consumers’ radar sixteen years ago with its Real Player, Real has continued to pursue video and audio compression technology. However, despite its success in this field, and its acquisition of subscription music service Rhapsody in 2003, competitors that offer streaming media for free have likely been a factor in Real’s declining stock value since 1999. Interestingly, Real’s stock has increased $3 per share since the patent sale announcement.
On the other side of the transaction, Intel’s brand has yet to be commonly associated with streaming media, unless one extrapolates to the speed of Intel’s semiconductor chips when they are applied to video processing. So when an Intel senior VP states that the patent purchase “…expands Intel's diverse and extensive portfolio of intellectual property,” we wonder if Intel shareholders are as enthusiastic as she is about the purchase. As “foundational” as Intel says these patents are, it seems to us that the company should have taken a “real” look into these patents before they agreed to purchase them.
Update: The full list of patents RealNetworks is selling to Intel can be found here.ShareThis