RIM May Fare Better in Licensing its Technologies Versus a Sale

Research in Motion, Ltd. (RIM), a former powerhouse in the enterprise mobile communication device market, has consistently lost market share over the past few years as its BlackBerry handsets continue to fail to keep up with current-generation Android or iOS devices.

RIM has, however, amassed a diversified patent portfolio during its history, with patented technologies covering all aspects of mobile computing and telecommunications.

RIM currently has 3,516 patents issued by the United States Patent & Trademark Office. These include patents originally filed by RIM, as well as patents that were assigned to RIM from other entities.

Of these patents, 1,619 (~46%) relate to wireless communication technologies, including RIM’s messaging platform, signal processing technologies, antenna hardware, and network routing and switching systems. However, within its wireless patent portfolio, we identified 228 patents that may be directed towards 3GPP LTE and its underlying and predecessor technologies, which is essential to the 4G wireless communication standard.

RIM owns 1,175 patents (~33%) on various consumer device features and functionality, such as displays, user interfaces, input recognition, multimedia, and ergonomics for its various devices.

687 patents (~18%) relate to RIM’s consumer device hardware and operational software, which include the circuitry, security, and encryption systems for its various devices.  These patents include technologies key to RIM’s legacy Blackberry OS.

The remaining 34 patents (~1%) are related to electronic commerce systems, mobile payment processing, and miscellaneous technologies.

RIM’s patent portfolio includes 33 issued patents and 72 pending patent applications that it obtained through the QNX Software Systems, Ltd. acquisition in 2009.  The QNX patents give RIM a suite of technologies to bolster its operating system, which RIM had hoped would revive its competitiveness in the mobile computing space once again. However, to date, RIM has failed to introduce a QNX-based device that would seemingly compete with Android and iOS devices.

All is not lost for RIM however, as many analysts and shareholders believe that RIM’s patent portfolio may be worth $1 – $3 US Billion, and they are calling on RIM to sell its IP assets.

However, RIM’s relatively small portfolio of possible LTE-related patents may not make its wireless patents very desirable to competitors, particularly to competitors that already own significant LTE-related technologies, and who may not need additional defensive patents to protect themselves in the litigious telecommunications industry.

Furthermore, it seems unlikely that any of its competitors would want to acquire RIM’s consumer device patent portfolio, as RIM’s device popularity has been in steady decline, in both the corporate and personal use markets.

On the other hand, RIM’s huge basket of wireless patents could position it to become a service provider, allowing it to license data, voice, and messaging technologies on its established proprietary communications network.

Given the vast number of patents it owns, RIM is not likely commercializing or monetizing a number of its technologies; technologies which could bring in much needed revenue to the company. Selling its patent portfolio may be difficult due to lack of demand from buyers.  However, licensing may be an avenue that could provide RIM recurring revenues for the remaining shelf lives of its patents.

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