“That’s the Silicon Valley in me” – why Unwired Planet’s new CEO took the risky decision to jump ship to an NPE 01 Sep 15
It has been three months since Boris Teksler took over as CEO and president of Unwired Planet. After a career that has included stints at HP, Apple and, most recently, Technicolor, his move to an NPE, particularly in the current challenging climate, took many people by surprise. On 25th August the firm announced preliminary results for the financial year ending 30th June 2015. A loss of close to $42 million showed the extent of the task that Teksler faces.
Like many NPEs in the market today, Unwired Planet has gone through several iterations in its lifecycle. First known as Openwave, it was one of the early pioneers in mobile internet technology, reaching 2,200 employees and revenues in excess of $400 million by the early 2000s. Ultimately, though, it struggled to compete in a rapidly evolving mobile market and sold its tech business in 2012 to focus solely on trying to license its portfolio of a couple of hundred patents.
That patent stockpile was given a serious boost in 2013 when the NPE signed a major deal with Ericsson. This saw the Swedish telecoms giant agree to transfer more than 2,000 patents in return for a cut of any future licensing revenues. Since then, however, the firm has had a mixed record in its attempts to monetise what is now a relatively hefty portfolio. In March last year it did close a very significant $100 million deal with Lenovo by which it sold 21 patent families and gave the Chinese tech giant a term-based licence to its portfolio. However, Unwired has struggled in court cases against Apple and Google, and while it has shifted a large part of its litigation focus to Europe – it has an ongoing case against Huawei in Germany – three years into its life in the licensing business , like many other NPEs it has failed to deliver consistent revenues.
That would suggest that Teksler’s move is loaded with risk and uncertainty, but as a long-time denizen of the world’s leading technology hotbed he admitted in an exclusive interview with IAM that he’s a product of his environment. “That’s the Silicon Valley in me,” he responded when asked why he traded in the relative security of Technicolor for this new gig. “Silicon Valley has long valued entrepreneurs and the prospect of building a new business is an exciting allure.”
However, there were a number of other reasons that made the Unwired opportunity particularly attractive. For one, he’s buying into the company at the bottom of the market. “The stock price has been so compressed and I truly believe that this is a company that made a material impact on the mobile Internet,” he said. So the market, in Teksler’s eyes, has failed to properly value the NPE’s patents.
“Unwired Planet was founded with the vision of bringing the ‘internet-in-your-pocket’ to the world, and was the first to put an internet browser into a phone, signing a deal with AT&T in 1996,” he said. “Many of these patents disclose and protect the foundational aspects of today’s most widely used mobile technologies, such as mobile internet, location-based services and e-commerce applications. Openwave did not get the credit for their contribution to the industry and deserves to get something for their work.” Throw in the patents from Ericsson, a company which, Teksler points out, is one of the biggest - if not the biggest - owners of standard essential patents (SEPs), and his assertion that “the market has fundamentally undervalued these assets” makes sense.
Of course, the market cannot entirely be faulted. Unwired’s recent financial performance has not been impressive to say the least, as the year end results show, and the new CEO still has some way to go in bringing costs under control and starting to close some significant licensing deals.
Beyond the quality of the portfolio, Teksler says he was also attracted to the Unwired position by the opportunity to bring greater clarity to a murky subject. “I think there’s an opportunity that’s broader than Unwired Planet and that is to define the value of SEPs with a fair, equitable and rational approach,” he stated. “Done correctly we can help shed light on this long running enigma for the industry.”
Determining just what is fair and equitable has been the subject of intense focus by the courts, and some standards setting organisations. In February, the IEEE announced an update to its patent policy, redefining the terms under which SEP owners agree to license their patents. The new policy has met with opposition from a small group of tech companies, Qualcomm, Nokia, InterDigital and Ericsson, while a number of recent court cases, including Microsoft v Motorola, have shown the wide disparities that can exist between SEP owners and potential licensees.
In other words, clarity is something that the market badly needs and if Teksler can help while licensing the Unwired portfolio then he will have made a significant contribution. He will certainly get plenty of opportunities to try, as part of his strategy is to focus on licensing SEPs which the NPE has so far declined to litigate.
That focus on SEPs will also mean that more of Unwired’s assertion efforts will be centred on Europe because, Teksler believes, “Europe understands the value of patents especially SEPs”, and has been at the forefront of developments in mobile technology. That suggests that we’ll see more Unwired patents litigated in Germany, though Teksler insists that his ambition is to leave behind the courtroom as the licensing negotiation forum of first resort.
Of course, we have heard others pledge a commitment to move away from a litigation-led strategy before – Inventergy, for one, has tried it and has struggled to bring in licensing revenues. Teksler is fully aware of the challenges that he faces and says that their success will depend on the quality of their assets, his team’s approach to licensing negotiations and the provenance of the company.
So under Teksler we should expect plenty of news on the licensing front from Unwired. But the new CEO has also committed the firm to an acquisition strategy that will see it move into new technology and product development by buying other businesses. A large part of Teksler’s career at HP and Technicolor was in developing products and bringing them to market, so he has the expertise to help shift Unwired’s focus. His new platform is certainly very different from that of a large operating company, but then that is the kind of risk that Silicon Valley is all about.
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