Google-Moto pulls in $228m following settlement with RIM
Mystery 'company' ponied up $175m in cash alone
Google's new acquisition Motorola Mobility says it has bagged $228m so far from a patent licensing deal with another, unnamed company – which appears likely to be BlackBerry maker RIM.
The Chocolate Factory's new mobile hardware tentacle got an upfront cash payment of $175m and a licensing agreement that brought its pre-tax gain up to $228m during the nine months until the start of October 2010, from "a company".
The filing PDF (56-page/181KB) said in a mysterious fashion:
In June 2010, the Company announced that it had entered into a settlement and license agreement with another company, which resolved all outstanding litigation between the two companies. The agreement includes provisions for an upfront payment of $175 million from the other company to the Company, future royalties to be paid by the other company to the Company for the license of certain intellectual property, and the transfer of certain patents between the companies. As a result of this agreement and the valuation of the patents exchanged, the Company recorded a pre-tax gain of $228 million during the nine months ended October 2, 2010, related to the settlement of the outstanding litigation between the parties.
A Motorola Mobility spokesperson refused to reveal the name of the company. However the only licensing agreement and patent litigation settlement Motorola announced in June last year was the one with BlackBerry-maker Research in Motion (RIM). As of this article's publication, RIM representatives had not responded to requests for comment.
The mobile manufacturer said it and RIM would "benefit from a long-term, intellectual property cross-licensing arrangement involving the parties receiving cross-licenses of various patent rights, including patent rights relating to certain industry standards and certain technologies, such as 2G, 3G, 4G, 802.11 and wireless email".
The firm also said the two companies would transfer certain patents to each other, but added that the specific financial terms of the deal were confidential.
In today's filing, Motorola Mobility said that it was still involved in a number of patent lawsuits that could impact its business, most notably suits and countersuits with Microsoft, but said some of these could be resolved soon.
"We are involved in significant patent litigation with industry competitors and other relevant patent holders. Several of these matters could be resolved during the remainder of 2011 or the first half of 2012," the filing said.
The company also warned that its upcoming merger with Google – still awaiting approvals – could ramp up its legal issues.
"The announcement and pendency of the merger may have a negative impact on our business, financial results and operations or disrupt our business by ... intensifying existing litigation or increasing new legal claims from our competitors and other third parties, particularly as companies vigorously pursue and protect their intellectual property rights with patent litigation," the filing added.
The merger is also keeping the firm from any huge gains in its revenues, as its future as Googorola remains uncertain.
The mobile devices segment of its business, which shipped 11.6 million devices including 4.8 smartphones, recorded net revenues of $2.4bn compared to $2bn in the third quarter of last year. That gave it a slight reduction in losses from $43m in 2010 to $41m this year.
The total loss for Motorola Mobility in the third quarter was $32m down from $34m in Q3 2010. ®
Not wanting to stick up for anyone apart from the literates but...
What interests me is that the value of a company can be entirely dependent on the value of something as intangible, and potentially undisclosed, as a US patent. Surely this sort of thing makes it next to impossible to invest in a tech company? This isn't how the patent system was meant to work.
And it strikes me that Olympus missed a trick here. Why bother siphoning billions to the Caymans, when you can just buy a few dud patents? They should have called me.
This was started before Google's acquisition, you see. I'm sure Google will now drop the whole case including all future royalties payments - or, even better, give all the royalties to the Bill and Melinda Gates Foundation.
Google does no evil, none at all. Saint Schmidt and Saint Page are true angels on Earth. Amen.