Joff Wild

When BlackBerry concluded a cross-licensing agreement with Cisco last June, with a provision for the Californian company to pay an on-going royalty, this blog stated that the deal could mark the start of the Canadian telecoms and wireless business becoming a major player in the patent monetisation space.  Eight months on and that prediction seems to be coming true.

Last week, BlackBerry announced deals with Canon and International Game Technology. Both look set to swell the company’s coffers. The announcement of the agreement with Canon makes no mention of fees or royalties, but does quote VP of IP and licensing Mark Kokes as saying: “It substantiates the value companies place on BlackBerry’s innovative and foundational power charging patents for mobile and consumer electronic devices … With the agreement in place, Canon can continue to incorporate convenient charging solutions in its exciting new products.” The insinuation is pretty clear.

The announcement concerning the IGT tie-up is much more explicit, talking about “a royalty bearing patent license agreement related to certain power charging technology used in IGT products”. The quote from Kokes is very similar to the one given for the Canon deal: “Our license agreement with IGT affirms the importance of BlackBerry’s innovative and foundational power- charging patents … With this agreement in place, IGT can incorporate convenient power charging solutions in its new gaming products, to the benefit of its customers and partners everywhere.”

Reading between the lines here, it is hard not to get the very strong feeling that Kokes is sending out a warning to other companies: we are coming after you as well. It’s notable that Canon and IGT operate in different arenas, but have felt the need to sign up to agreements covering the same kinds of patents. That probably indicates that BlackBerry has a wide range of companies on its list of potential licensees. It also now has three strong names to put in front of those who might be tempted to hold out, as well as a rumoured agreement with an unnamed company that signed up around the same time that Cisco did.

I don’t know much about IGT’s patent operation, but I have seen plenty of both Cisco’s and Canon’s. Neither is a pushover by any stretch of the imagination. For that reason, I’d say it is significant that litigation was not needed to get them to deal – they must have known BlackBerry had them bang to rights. Up to now, it seems, the company has not felt the need to issue proceedings against anyone. Whether that will continue given the current state of the licensing market remains to be seen – there are some businesses that will not even begin to talk about taking licences until a suit has landed on the doormat.

Licensing, though, is not the only way that BlackBerry is monetising its patent portfolio. Sales are also playing a part too. Earlier this year, we reported that court documents filed in Chicago revealed that the company had sold a portfolio of patents to Centerbridge Partners for an amount that could run to $50 million. This transaction only became public because of a dispute involving Ocean Tomo and former employee Michael Friedman, so it is perfectly possible that others have taken place under the radar. But even if it is, so far, a one-off what it shows is that BlackBerry is determined to use the full range of options at its disposal to get maximum bang for its monetisation buck – something that CEO John Chen has stated publicly is key to his turnaround plans.

Given the size of the BlackBerry portfolio and its seeming potency, we can expect to see many more licensing deals signed over the coming years and should probably also factor in a few sales as well. What’s more, it’s likely to be only a matter of time before the company is reluctantly forced into litigation too; though it may want to wait until all low hanging fruit is picked off before the courts are called on.  

It took BlackBerry a little bit of time to realise what it had – and that delay may have cost it money given what has happened to the patent market over the last couple of years – but it does now seem very fixed on maxing out on the IP assets that it owns. That will be good news for the company’s investors, even if only a few of them so far really understand that to be the case.