Carl Icahn was the leading force when Motorola split into Motorola Mobility and Motorola Solutions. His rationale was that the cell phone unit was dragging down the value of the Solution’s stock.
However, with Motorola Mobility comes further insult to injury. Icahn said you can’t think that your current IPR is any more valuable than it is today. Unfortunately he is correct, but the reason has less to do with the future of Motorola Mobility as it has to do with the current situation.
While California is an amazing place where people come and share their experiences with each other freely, we are at the point where the companies they work for are involved in a lot of lawsuits.
Oracle is suing Google for patent infringements in their Android units on the Java assets acquired in SUN Microsystems. Apple and Microsoft are also both aggressive now with Google. And even in the general PR world Facebook has attacked Google, even if it did so by shooting itself in the foot.
This caused the Nortel patents, which Google wanted to have for cover, sold to the Everybody But Google [EBG] team for $4.5 billion. A patent portfolio that was largely no longer active and some of the more interesting new products had been spun off already. So Icahn is right in saying that you can probably get a premium for the Motorola Mobility patents right now.
Google for its part has some aces up its sleeves with the likes of On2 Technologies’ video codec patents and Global IP Sound [GIPS] codecs. At one point the expectation was Google was going to open source these solutions to flood the market.
All of this makes Icahn’s point. The IPR is being used to claim stakes (or is it stake claims?) in the market currently. Patent wars cause delays which may close windows for innovators. While many of us would want patent reform the reality is that Nortel’s IPR is today’s blue tulip bulb: more valued for the market now then it will be later.
My own take is that it’s particularly true given the possibilities of the China effect. China has assured itself that in joining the rest of the world it does not have to pay IPR by creating the alternative standards that are like 3GPP but with some different (timely) formats.
While I have said this to many people who have blown off the idea, I can imagine the IPR battles reversing with China where their solutions flood the market. Huawei has made significant impact in sales to major carriers and cable operators and driven some companies to seek better margins in niche markets. LTE deployments have been primarily based on single vendor solution strategies and 4G like VoIP may be stuck with gateways / session controllers to deliver interoperability for some time.
I can see Icahn’s point and if I were Motorola Mobility, I would be listening. After all, there is no time like the present.
Want to learn more about 4G wireless technologies? Then be sure to attend the 4GWE Conference, collocated with TMC’s ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. The 4GWE Conference provides unmatched networking opportunities and a robust conference program representing the wireless ecosystem. The conference not only brings together the best and brightest in the wireless industry, it actually spans the communications and technology industry. To register, click here.Carl Ford is a partner at Crossfire Media.
Edited by Stefanie Mosca