There Can Be Only One: Intellectual Property Analysis of WiLAN Inc. and MOSAID Technologies
WiLAN has launched a C$480 million hostile takeover bid for MOSAID Technologies. While WiLAN’s management has described the potential transaction as creating a “very valuable” company, their combined patent portfolios warrant close scrutiny. Over half of MOSAID’s portfolio and nearly sixty percent of WiLAN’s portfolio appear to be impaired, a combination of which runs the risk of creating a whole that has less value than its individual parts.
On August 17, patent licensing company Wi-LAN Inc. (“WiLAN”) announced an unsolicited bid for rival patent licenser MOSAID Technologies (“MOSAID”), this time offering MOSAID’s shareholders C$38.00 per share, or roughly C$480 million total. If this acquisition occurs, WiLAN, which focuses on wireless, wireline, and V-Chip licensing, would add to its portfolio around 2,800 patents of MOSAID, which largely focuses on semiconductor and telecommunications technology licensing. On September 7, MOSAID released a statement that its board unanimously recommends that its shareholders reject the WiLAN bid, stating that, among other reasons, “the Wi-LAN Offer is opportunistic and fails to recognize both the current value of MOSAID and its significant near and longer-term growth potential.”
WiLAN Chairman & CEO Jim Skippen – formerly SVP of Patent Licensing and General Counsel of MOSAID – has chosen to follow a strategy of stockpiling an ever-expanding arsenal of patents, stating in WiLAN’s press release that “bigger is better” and that his “vision has been to increase the company’s scale with a deeper, larger patent portfolio to make it more compelling for potential licensees to choose a license over litigation.”1 MOSAID appears to share this goal – perhaps more in an attempt to thwart a WiLAN takeover – by having acquired 2,000 patents, originally filed by Nokia, through its purchase of Core Wireless at the beginning of this month.
However in a world where the USPTO’s addition of two examiners over just one led to disallowance of a majority of patent applications, quantity hardly means quality. A variety of analyses using the M•CAM DOORS™ platform were performed on the holdings of MOSAID Technologies and WiLAN. A commercial analysis was performed, using the M•CAM proprietary unstructured data mining algorithm, which reveals at least 57% of WiLAN’s portfolio and at least 53% of MOSAID’s portfolio as potentially inadequate to protect WiLAN and its corporate activities. Additionally, an analysis was performed on a sample of the innovation space surrounding the most prevalent class codes of both portfolios, revealing the top twenty holders of uncited precedent innovation for the combined portfolio of both companies. Finally, we looked at the strength and potential defensibility of two patents asserted by WiLAN this month against Apple and others, focusing especially on public domain technologies found in the relevant innovation space.
ShareThis
