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Apple is on the lookout for more patents to protect its mobile cash cow.  (Source: Business Insider)
Company has 8,800 patents; other potential buyers include Nokia and Qualcomm

InterDigital, Inc. (IDCC) stands a gleaming target for acquisition with its 8,800 patents.  Its intellectual property war chest includes patents on key 3G and 4G LTE technologies -- critical to modern smartphones.

I. A Big Auction

The company is currently up for auction with a market capitalization of $3.16B USD, as of early Thursday.

The key question is how much the sale will fetch.  InterDigital was counting on recent patent strife in the mobile market to drive up its price to higher than expected -- similar to Nortel Network's 6,000 patent library, which sold for $4.5B USD to a coalition of Apple, Inc. (
AAPL), Research in Motion (TSE:RIM), Microsoft Corp. (MSFT), and others.

However, the Nortel sale reached such heights because of Google, Inc.'s (
GOOGcontinued bidding.  With Google announcing the purchase of Motorola Mobility, Inc. (MMI) this Monday -- holder of 17,000 patents -- it is unclear whether it will feel it necessary to bid for InterDigital.

That could make a huge difference in the auction.  States Deutsche Bank analyst Brian Modoff in a comment to Reuters, "The problem InterDigital has is that Elvis has left the building. He's got his date.  The problem is finding somebody else to whom it's necessary. It could get acquired, but not at where the stock is at (now)."

II. Who WILL Bid?

Apple is still expected to be a key bidder.  Apple seems determined to continue its legal attack 
[1][2][3][4][5] on Android handset makers.  And while Google may be relatively safe from suits now, its less IP-endowed partners like HTC Corp. (SEO:066570) may still be fair game, should Google fail to act in their protection.  

In this case, though, HTC should be partially safe, as it -- along with Apple, Samsung Electronics (SEO 005930), Research in Motion -- licenses InterDigital's 3G technologies.  However, with the 4G transition looming it is unclear what companies license InterDigital LTE IP.  Thus HTC  -- who has a market cap of $655B USD -- could still make a bid for the 4G portfolio as a tool to potentially ward off Apple.

Nokia Oyj. (HEL:NOK1V) who will soon primarily make Windows Phone 7 handsets, is a non-licensee who is reportedly interested in the portfolio for defense purposes, as well.

For Apple, the portfolio would allow it to attack non-licensee Android (and potentially Windows Phone 7) handset makers.  While about half of handset makers license the portfolio, many still do not.  It could also use the 4G part of the portfolio to sue companies like HTC, who currently only license the 3G patents.

If the portfolio does see sufficient interest from device makers, it may see some bids from chipmakers, as well.  Qualcomm Inc. (QCOM) is among the firms reportedly interested in the portfolio, from a chip making perspective.

One factor devaluing the portfolio is alternatives on the market, such as Eastman Kodak Comp. (EK) which owns 1,100 digital imaging patents valued at around $3B USD by recent estimates.

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This is ridiculous!
By superPC on 8/18/2011 10:45:55 AM , Rating: 5
companies spending billions on patent acquisition instead of real R&D. the system is broken! we need a more open and democratic patent system.

how about this: for a new patent system all new patent should be up for review by the general public. if someone who reviewed it can brought sufficient evidence that the patent describe prior art than the patent get nullified right then and there. for all patent already approved, there should be an open review process where anyone can submit evidence if the patent describe any prior art and that would nullify the patent.

let’s face it. Judge and lawyer are not the best people to review a patent. they’re not scientist or engineer that might have knowledge concerning the patent.

The court is not the best way to review a patent because court is not a venue to expose the truth, it’s just a venue to uphold the law and the law does not concern about the truth only evidence PRESENTED.

a patent should be peer reviewed like a research paper before and after it's granted.

RE: This is ridiculous!
By 440sixpack on 8/18/2011 11:35:27 AM , Rating: 3
It also doesn't seem right to me that just buying a patent gains you the same protections as developing it in the first place. It just doesn't sit right with me that some company can buy a patent, then turn around and start screaming that some other company is violating "their" patent, sometimes going back years, before the current company even owned the patent!

It just seems to me that if you are not the original developer of the patent, there should be restrictions on how you can use that patent (for suing) going forward.

RE: This is ridiculous!
By nafhan on 8/18/2011 12:34:04 PM , Rating: 2
I think you should be able to sell anything that has real value attached to it. The problem is that the patent system in general is a mess. If the system worked better, this wouldn't be as much of a concern. More reasonable time limits on patents, more stringent requirements for granting them in the first place, and (BIG) penalties for improperly pursuing someone over IP rights would go a long way towards promoting innovation (IMO).

RE: This is ridiculous!
By bupkus on 8/18/2011 1:09:01 PM , Rating: 2
Penalties would only go so far as to discourage smaller companies or individuals from defending violations of their patents.

RE: This is ridiculous!
By nafhan on 8/18/2011 3:19:42 PM , Rating: 2
It would almost certainly cut down on the total number of patent suits. However, if penalties were implemented and enforced properly, "small companies" actually harmed by the penalties would mostly be patent trolls.

RE: This is ridiculous!
By goodsyntax on 8/19/2011 8:35:31 AM , Rating: 2
I think that the losing side should pay the winning sides legal fees. That would put an end to these patent trolls and other frivolous lawsuits.

RE: This is ridiculous!
By Theoz on 8/18/2011 1:51:41 PM , Rating: 2
This already exists while the application is pending:

And after it is granted at a fee:

Do you really think any party that is not financially motivated would take the time to invalidate a patent even if there was no financial burden for doing so? That is a pipe dream.

RE: This is ridiculous!
By hankw on 8/18/2011 1:53:04 PM , Rating: 3
They should just shorten the time limit for tech/software patents since the industry moves so much faster than others. I say 5 years is sufficient, maybe even less depending on what it is. After that the patent should be in the public domain. If you can't implement your idea within those 5 years, then either don't patent it, or sell your idea for profit to a company that can.

RE: This is ridiculous!
By name99 on 8/18/2011 3:54:24 PM , Rating: 2
Gee. The end stage of finance capitalism is that every other business lands up concentrating purely on these sorts of financial games rather than on doing something useful? Color me amazed.

WTF did those of you who've cheering on Wall Street and Reagan/Bush since the 1980s think was going to happen? That history was going to somehow play out completely differently this time from the way it has before? That John Galt represented reality, rather than the Nelson Bunker Hunt?

By PlainAndSimple on 8/18/2011 11:13:46 AM , Rating: 3
Apple went from the company of innovation to the company of lawsuits. Keep feeding the Apple lawsuit machine with your purchase of iPhones.

RE: PlainAndSimple
By michael2k on 8/18/2011 12:15:54 PM , Rating: 2
Apple's always been this way. You act as if you can separate the innovative parts from the part that sues others copying them.

Remember their lawsuit against Microsoft for copying them? The reason they lost was that they had originally licensed patents to Microsoft for Windows 1.0!

RE: PlainAndSimple
By nafhan on 8/18/2011 12:50:37 PM , Rating: 2
Innovation and lawsuits aren't mutually exclusive. Apple's got the money to take a two pronged approach here:
- Make good products
- Sue the **** out of anyone else who makes good competing products

If a company is suing a competitor with less cash, they don't even need to win the suit to seriously damage their competitor.

RE: PlainAndSimple
By Iaiken on 8/18/2011 2:34:46 PM , Rating: 3
If a company is suing a competitor with less cash, they don't even need to win the suit to seriously damage their competitor.

Apple is definitely at the forefront of weaponizing money...

RE: PlainAndSimple
By ClownPuncher on 8/18/2011 5:44:43 PM , Rating: 2
Can they stand up against my weaponized feces?

RE: PlainAndSimple
By Pirks on 8/18/2011 9:35:41 PM , Rating: 2
You don't have enough feces for them to notice, my friend

RE: PlainAndSimple
By BZDTemp on 8/18/2011 6:10:33 PM , Rating: 1
Apple is gonna learn that being assholes has a cost.

Firstly the world is slowly realizing Apple is not a special company it was once thought out to be. Since they took away the "Computer" in Apple Computer it's been clear they are just another big company willing to use and abuse it's power just as we know it from Microsoft.

Secondly Apple is learning the suing left and right means getting sued back. Look at the latest HTC vs. Apple or how Google is waking up to defend Android and for sure Apple also have something bad coming from Samsung.

Oh, how funny it would be if HTC gets Apples imports to the US stopped (remember we are not just talking phones).

HTC market cap is wrong
By ralith on 8/18/2011 1:19:26 PM , Rating: 3
Thus HTC -- who has a market cap of $655B USD -- could still make a bid for the 4G portfolio as a tool to potentially ward off Apple.

This statistic is off. Exxon has the highest market cap of any company, $365 billion. I suspect you need to convert whatever it is the taiwan uses as their money to the US dollar to get the correct value.

RE: HTC market cap is wrong
By Dark Legion on 8/21/2011 10:33:35 PM , Rating: 2
Funnily enough, "whatever it is Taiwan uses as their money" is called the "dollar". However if that's true, that would make their market cap ~$22Bn. (by current market stats)

By smilingcrow on 8/18/2011 10:47:36 AM , Rating: 3
What do you call 10,000 lawyers at the bottom of the sea?
A good start.

Due to all the legal nonsense that needs reporting sites like this might need to start a satellite site such as

So much Apple hate as usual here
By vision33r on 8/18/2011 9:09:46 PM , Rating: 2
Apple is recording record sales and you guys are just crying sour grapes.

Nothing is stopped Apple and the reason why is because PC is dying. HP is getting out because it's unprofitable and competition is too fierce.

"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser

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