Dell’s Patent Portfolio Could be Leveraged After Buyout

Recent plans for a leveraged buyout of Dell, Inc. by Michael Dell and Silver Lake Management LLC for $24.4 billion have raised numerous questions as to the value of Dell, and if the proposed buyout price accurately reflects the company’s worth.  In addition to Micahel Dell and Silver Lake, Microsoft has also backed the deal with a $2 billion loan.

Envision IP analyzed Dell’s US patent holdings to determine what technologies the company has focused its research and development efforts on.  We identified 2,647 in-force US patents assigned to Dell, and the patented technologies appear to closely mirror Dell’s business focus on various aspects of desktop and notebook computing.

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Computing hardware-related patents make up about 21% of Dell’s US patent portfolio. These patents cover casings, connectors, fixtures, and circuitry for desktop, notebook, and mobile computing devices.

Battery and power management technology-related patents are the next largest group, making up 15% of the patent portfolio. These patents relate to power optimization, power adapters and plugs, and power backup systems.

Hard drive and storage systems make up about 9%, followed by displays at about 6.5%.

The following categories each make up between 3.4% to 5.5% of the patent portfolio: networking technologies (routing, switches, and related software and hardware), input devices, multimedia technologies, server technologies (racks, hardware, blades, and management software), and cooling systems for both servers and computers.

Wireless patents make up 3% of the patent portfolio.  These patents relate to RF and other short-range wireless protocols, antenna/base communication technologies, and wireless network access.  Dell does not appear to own any LTE-related patents based on the patents that we reviewed.

The remaining patents cover internet access and usability technologies, peripheral devices and connectivity, supply chain technologies (related to its built-to order, warehouse, and CRM systems), security and data access, and printing systems.

We did not uncover any exact figures related to Dell’s historical patent licensing revenues.  However, it appears that Dell’s main focus over the years has been to obtain patent protection on technologies it plans to commercialize.

Dell certainly understands the importance of IP, as evidenced by its business-focused patent portfolio, and its membership with patent aggregation firm RPX.  Dell’s patent portfolio has an average remaining term of 9.4 years, giving the company ample time to maximize the value of its patents.

Given Dell’s buyout and transition into a private company, it will be interesting to see if Dell will focus increasing attention on licensing or otherwise monetizing its patent portfolio.

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