Alcatel-Lucent goes Ahead with Patent Monetization Program; Microsoft Sues Samsung in US Patent Royalty War

Alcatel-Lucent has continued to monetize its patent portfolio and recently retained ICAP Patent Brokerage to organize a sealed bid auction of over 850 granted patents and applications. Former Kodak President Laura Quatela was appointed as executive vice-president of intellectual property will lead the patent monetization program and will directly report to CEO Michel Combes. Quatela is considered one among a few IP heads that report directly to the CEO. The assets for the auction are divided in 14 lots in different categories pertaining to specific technological areas.

For the most part, ICAP and Alcatel-Lucent are believed to be selling heavily cited assets that touch a number of key technologies. Initial bidding is expected to range from 7 to 8 figures, depending on the category and technology. However, what remains to be seen is if the amounts generated will be close to the value estimates. As much as 50% of the assets for sale consist of grants from a number of European countries and the European Patent Office, and Asian countries that include Korea, Japan, and China.

Trying to Survive

This is an indication of the internationalization of the IP marketplace especially since over 50% of what is for sale is of non-US rights. With the help of patent lawyers, Alcatel-Lucent has worked towards making their patents work for several years. Goldman Sachs and Credit Suisse reached an agreement with the company on a $2.1 billion debt financing package in 2012, which was collateralized by its patent portfolio. Both banks received a cut of all licensing deals.

Alcatel-Lucent transferred patents to NPEs or non-practicing entities that include Sound View Innovations, Vringo, and Intellectual Ventures. This is despite the fact that patent licensing by NPEs is still a controversial topic. They are often referred to as patent trolls, which have many companies and their patent attorneys concerned. Quatela is recognized for her strong leadership and experience in patent monetization and is likely to play an integral role in unlocking the value of the company’s over 32,000 active patents. Following a prolonged period of losses, Alcatel-Lucent has turned to asset sales and patent monetization as part of their restructuring program.

Microsoft and Samsung in US Patent Royalty Tussle

Microsoft Corp has announced its decision to sue Samsung Electronics Co Ltd over royalty payments. The software giant claims the South Korean smartphone maker declined to make royalty payments on patent licenses when Microsoft made clear its intentions to acquire Nokia’s handset business. The company’s patent lawyers filed the lawsuit in a Manhattan federal court seeking monetary compensation of an undisclosed sum. David Howard, Microsoft’s deputy general counsel, said the company valued its partnership with Samsung but differs in its interpretation of the licensing agreement.

These people are competing just like huge corporations do.

These people are competing just like huge corporations do.

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Samsung sources say the company is reviewing the petition in detail in order to respond appropriately. Microsoft is vying for a share of the mobile market with its products run on Google’s Android operating system. Part of the company’s move has been to convince Android handset makers to raise the costs and pay Microsoft patent royalties.

Ownership and Competition

 

This includes LG, HTC and Samsung, who agreed to pay. However, Samsung backed out of paying following Microsoft’s deal with Nokia last year, citing a breach of the licensing agreement. Although Samsung did end up paying, the company has failed to pay interest, which is the basis of the lawsuit. In its defense, Samsung claims that smartphone products sold by Microsoft post the Nokia deal were not covered by the licensing deal.

Microsoft is alleged to be profiting from the sale of Android devices and reportedly made over $2 billion a year from licensing deals with OEMs that sell Android smartphones and tablets. While Samsung is using Microsoft’s acquisition of Nokia as a reason to invalidate the contract, it did not ask the court to decide so.