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Summary:

One more development today that shows the patent race — and the many millions of dollars that are going into defending and settling around…

One more development today that shows the patent race — and the many millions of dollars that are going into defending and settling around them — is still in full stride. The Canadian company MOSAID has announced that it is picking up the management of some 2,000 patents belonging to Nokia (NYSE: NOK), which it will license and enforce in exchange for one-third of the resulting proceeds.

The announcement from MOSAID says the trove of patents will come to it via the acquisition of Core Wireless Licensing, a Luxembourg-based company. Core Wireless holds a portfolio of 400 patent families, covering 2,000 wireless patents and patent applications originally filed by Nokia. Core Wireless will become a subsidiary of MOSAID.

This is potentially a big deal, considering that the recent Nortel auction, in which the bankrupt company’s patent trove was bought by a consortium led by Apple for $4.5 billion covered 500 patents.

Interestingly, MOSAID is not paying for the portfolio of patents. Rather it will “fund its acquisition of the portfolio through royalties from future licensing and enforcement revenues.” It will keep one-third of the resulting revenues for itself.

The is a lot of potential for litigation going forward. Some 1,200 of the patents in question have been declared “essential” to 2G, 3G and 4G networking — covering GSM all the way through to LTE standards. The other 800 patents cover “wireless implementation.” It is not clear if any of these patents were part of the settlement reached with Apple earlier this year. Nokia says these patents were not part of the settlement with Apple (NSDQ: AAPL). Read more feedback from Nokia at the end of the post.

The company says it believes that licensing, enforcing and monetizing those patents could result in more revenue than the company has made since starting in 1975, which runs up to about $1 billion.

Intellectual Ventures redux? MOSAID says that it has been in negotiation for this patent transfer since March 2011. Ironically, March 2011 was also the month that MOSAID started to get involved in quite a lot of litigation for its own trove of patents. It sued a series of companies including RIM (NSDQ: RIMM) and Huawei over infringements of WiFi patents; it later also filed complaints against Cisco at the ITC and NVIDIA, among others. It also entered into settlements with LG (SEO: 066570) and MediaTek.

According to an article in the Globe and Mail, the average life of those patents already filed is between 10 and 11 years.

Update: More on how these patents fit in with the rest of Nokia’s patent porftolio. A spokesperson tells mocoNews that the patents concerned here were not part of the Nokia portfolio at the time of the settlement with Apple. He declined to comment on whether they have been the subject of any other litigation or settlements to date: “Terms of licensing agreements with other companies are confidential,” he wrote in an email. On the subject of the rest of Nokia’s patents, he says that the company generates more than 1,000 patentable inventions every year, and that its portfolio currently includes more than 30,000 individual patents:

“Our R&D activities generate more than 1,000 patentable inventions (described as patent families, because each invention may have patents filed in multiple jurisdications) every year. In recent years we have actively managed our portfolio at around 10,000 patent families, so we have made more than 20 divestments in the last five years, as part of our monetization strategy for Nokia’s intellectual property. As one of these transactions, during 2Q 2011, we divested a portfolio of 400 patent families comprising around 2,000 granted patents and patent applications and it is that portfolio that MOSAID has announced that it has acquired with its acquisition of Core Wireless.

“Nokia retains an industry leading portfolio of around 10,000 patent families. In all, the portfolio includes more than 30,000 individual patents and patent applications, so to put the news in context, what we have divested effectively represents less than six months’ patent filings for us.”

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  1. Not only does it double dip. It keeps the parent companies safe. This is so Microsoft.

  2. The interesting thing is that the value of the patents can be much higher when managed by a third party than when managed by Nokia. The reason is that Nokia, Ericsson, Motorola, Apple, etc normally trade patents on a like for like basis. I.e. if Nokia has 30.000 and Ericsson has 30.000 then no money will change hands even if the patents are clearly very different. When an independent company not interesting in trading with patents require license money or sue businesses for patent infringement then they can have considerably higher value. Right or wrong? This is about maximising profits.

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