By using purchased patents to lauch products, Rambus could weather stock market shakiness 16 Jul 13
Rambus has launched a line of self-branded LED lighting products using technologies it acquired as a result of a patent purchase. According to a report over at the ExtremeTech website, Rambus’ ability to launch a range of LED lighting solutions is thanks largely to its $26 million acquisition of lighting and optoelectronics patents from Global Lighting Technologies (GLT) in 2009. As part of the deal, several GLT personnel also reportedly moved to Rambus – bringing with them knowhow critical to leveraging the purchased portfolio.
Rambus’ move into offering LED lighting products shows it understands that, while monetisation can bring rich rewards, IP value creation is about a whole lot more than licensing and sales. As well as seeking out licensees for the GLT patents – ExtremeTech reports that General Electric and Cooper Lighting have both taken licences – Rambus has identified an opportunity to commercialise the covered technologies and create a range of products. Considering the costs and risks of developing and marketing new products, that is clearly not a decision which the company has taken lightly.
Other patent monetisation-focused companies are looking at dabbling in product development, too. At last month’s IP Business Congress in Boston, Vringo’s chief IP and legal counsel David Cohen highlighted the NPE’s plans to generate more IP in-house, saying: “We are actively exploring ways of doing R&D, and we need an operating business to do that.”
For publicly traded IP companies such as Rambus and Vringo, pairing their patent monetisation business with a product or service-focused operating business could prove to be more attractive to a greater range of investors, for whom the IP marketplace remains a very risky and unfamiliar prospect. With a portion of the investment reliant on the performance of the product/service offering, less is riding on highly uncertain events like court decisions and deal outcomes. As of yesterday, Rambus’ share price had grown by more than 100% since the beginning of the year. Some of this stellar performance can presumably be ascribed to a few lucrative licensing agreements, like the $240 million deal struck with SK Hynix last month – but news that the company would be rolling out a range of products may also have buoyed investors.
Additionally, as this blog has stated before, defining a company such as Rambus as a 'troll' doesn’t seem to make a whole lot of sense when you consider its long term, significant investment in R&D and the fact that – as the LED lighting product launch suggests – a substantial part of the company’s revenue could come from sources other than royalty payments in the future. That does not sound like a business which focuses its efforts on filing frivolous lawsuits for nuisance value.
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