Jacob Schindler

Blackberry appears to have made a second significant patent disposal in the course of its turnaround strategy, in a deal facilitated by the relatively new IP transactions team at Hilco Global. The transaction history of the shell company that acquired the portfolio points toward a Chinese smartphone company as the possible buyer.

USPTO records show 24 separate assignments of a single patent right between an entity called “Hilco Patent Acquisition 55, LLC” and Golden Valley Holdings Limited. The assignments were all executed on 25th January, and were recorded between 23rd February and 8th March. A document attached to the latest assignment appears to lay out the full schedule of US and foreign rights being transacted – 177 assets in all, among them 31 US patent grants and applications.

Golden Valley, headquartered in Samoa, has acquired patents from multiple sources since 2015; all of those it has passed along so far have gone to Oppo. In 2016, it assigned the Chinese smartphone maker US patents acquired from Inventergy (in a $4 million deal this blog reported on), Intellectual Ventures and Intellectual Discovery. It also received three separate assignments from SK Telecom last year. There’s no indication that these patents, or the Hilco ones, have been transferred to Oppo.

The relationship between Golden Valley and Oppo is unclear, but given the public assignment history between the two, it would not be a surprise to see the Hilco portfolio wind up in Oppo’s possession. Both Hilco and Oppo declined to comment.

All of the patents involved were formerly owned by Blackberry, which assigned more than 200 patents and applications (including non-US assets) to the Hilco vehicle last May. Of the 18 US patent grants ultimately assigned to Golden Valley, four were originally assigned to Nortel and were part of the Rockstar auction. Presumably these were among the families Blackberry chose to retain before the Rockstar portfolio was sold to RPX, meaning they could be among the more valuable assets from that portfolio.

The package appears to have significant coverage across various European jurisdictions, as well as a handful of counterparts in China and in India, where Oppo is currently defending infringement litigation filed by Dolby.

Last May, Blackberry CEO John Chen said monetising the company’s 40,000 plus patents is a key part of the company’s strategy to revive its fortunes, adding: “Many people have wanted to buy the patents… But I’m not really in a patent-selling mode, I’m in a patent licensing mode”. Back in November, Blackberry sold a portfolio to Centerbridge Partners that is now being monetised through litigation, and it’s unknown whether the Canadian company has a stake in the outcome. But though the company is focused on licensing and litigation, it seems willing to entertain buy offers as well, if the price is right.

The deal appears to be the first public patent transaction made by Hilco Global since its January 2016 hire of former Ocean Tomo executive Michael Friedman. Friedman worked on the aforementioned Centrebridge sale for Blackberry while he was with Ocean Tomo, and it looks like he is still the Canadian company’s go-to when it comes to disposals.

Hilco, which specialises in distressed investments, signaled its intent to be a bigger player in the patent market last November when it brought John Veschi and his former Rockstar team on board and announced the launch of Hilco IP Merchant Banking. This deal was in motion several months before the new bank was announced, but given Veschi’s past at Nortel and Rockstar, perhaps his expertise was called on as well.

Oppo shot to the top of China’s smartphone leaderboard in 2016, selling 78 million devices to elbow past Huawei, Apple and its sister company Vivo (both Oppo and Vivo were founded by Duan Yongping and are subsidiaries of BBK Electronics). It’s also thriving commercially in India and throughout Southeast Asia. In 2015, it filed more Chinese invention patents (3,338) than both Huawei and Xiaomi, and it grew that figure by 13% last year to make it 2016’s fifth biggest Chinese patent applicant.

Oppo’s IP team keeps a low profile, but the deals made through Golden Valley Holdings in the past year show that it’s increasingly turning to third-party acquisitions. The transaction record suggests a patent buyer picking its spots, targeting smaller-sized portfolios that could have strategic value. If Oppo is indeed the buyer in this case, it looks like its biggest foray yet into the patent transactions market.