It has been reported that Microsoft and Nokia have agreed to a deal for licensing patents with the Canada based Mosaid Technologies. This move has illustrated yet another way in which the companies of the tech industry can get revenue from patents. According to the deal, Core Wireless, which holds many of Nokia’s and Microsoft’s patents, will provide around 2000 patents to Mosaid, which will then have to pay the costs of establishing licensing deals with other companies and give Core a 30% cut, which might appear to be quite lucrative for Mosaid.
As pre this arrangement, Microsoft and Nokia effectively shrugging away their own potential patent battles to Mosaid, who will now have to be on the look-out for the violations of its patents and will also litigate settlements, sending a fixed share of these revenues to Microsoft and Nokia, while it keeps a decent amount to itself.
John Lindgren, the chief executive of Mosaid told the media that the deal has the potential to transform the company, as he estimated that the revenue that it gets from the future licensing deals will far exceed the profits made in the last 35 years that it has been in business. He added that the revenue from this will be large enough to make up the majority of the company’s revenues in the upcoming years.
The terms of this deal say that the change in ownership of these patents will require both, Microsoft and Nokia, to approve it. This comes after Microsoft had some time ago this year struck a partnership with Nokia which stipulates that it provides the cell phone manufacturer the operating system for its handsets.
The agreement which covers mainly patents related to wireless technology will increase the existing patent portfolio of Mosaid by around 60%. The company had earlier focused on patents related to semiconductor technology which used to generate most of the revenue for the company.
Lindgren said that the wireless patents which Mosaid is now in position to license are much stronger than those which were a part of the Nortel Network’s patent portfolio, which was sold at a price of $4.5 billion to a group of buyers which included Apple, Sony, Microsoft and Research In Motion. He said that the deal also covers 169 patents which are related to the upcoming wireless broadband technology which is also called the long-term evolution, or LTE.
