Package of former Yahoo! assets sold, but deal for whole portfolio fails to materialise 03 Oct 17
Altaba, the company formed following the sale of Yahoo!’s core business, has transferred a small patent portfolio to an affiliate of IPNav offshoot Dominion Harbor.
The deal appears to be the first sale from the stockpile of IP which was separated from Yahoo!’s operating arm before that business was sold to Verizon in June for $4.5 billion. That portfolio of several thousand grants, known as Excalibur IP, was formed last year as the tech business looked to maximise the value from its non-core IP. Verizon declined to acquire the patents as part of its acquisition but received a non-exclusive, royalty-free licence. Initial reports speculated that the assets might fetch as much as several billion, although in an 8K SEC filing in March, Yahoo! gave them a fair value of $740 million. Houlihan Lokey, which acquired the IP advisory business Black Stone IP last year, has been handling the Excalibur sale.
As patent values have remained depressed and buyers have been particularly leery of picking up assets in many parts of the tech sector, a deal for all of the former Yahoo! assets has failed to materialise. The Monument deal suggests that the focus may now have shifted to selling discrete packages of patents rather than the whole job lot.
Eureka Database Solutions, which, according to RPX, is an affiliate of Dominion patent acquisition vehicle Monument Patent Holdings, acquired 23 patents and two applications from Excalibur IP in mid-September. The majority of the grants appear related to search with several dating back to the late-1990s - the most recent was granted in 2013.
The deal is further evidence that we’re seeing the next iteration of the NPE market with large portfolios of assets being broken up as they’re sold. Intellectual Ventures, which has one of the largest portfolios in the US, has ramped up its patent sales in the last year selling assets to the likes of Dominion Harbor and Equitable IP. As this blog has reported, many of those assets have quickly ended up being asserted in court against alleged infringers, suggesting that they become potentially far more threatening to possible licensees once they have been transferred. In line with the vast majority of patent deals in the current market, the rights concerned have typically changed hands in privateering style deals with some cash upfront and then the seller receiving a portion of any monetisation revenues.
Yahoo!’s March 8K made clear that while a sale of the whole Excalibur portfolio was the preferred option, alternative options remained on the table. “The Fund may seek to separately sell certain of the Excalibur IP assets or to license Excalibur IP assets if the Board of Directors of the Fund believes that doing so is in the best interests of the Fund’s stockholders,” the filing stated.
According to IV, its sales programme has led to increased interest in taking a licence to the giant NPE’s overall portfolio. If the Monument deal is a sign of things to come for the Excalibur portfolio, then the question is: will a buyer, or group of buyers, led by a middleman like RPX or AST, emerge to acquire the assets and take them off the assertion market? With IPRs and district court Alice motions posing a very real invalidation threat to many patents in the tech sector, potential infringers of the former Yahoo! assets may feel emboldened to simply wait to see if they’re asserted against them and fight them off in court.
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