Nvidia and Intellectual Ventures recently agreed to jointly buy IPWireless, a company that dealt in wireless internet transmission hardware. With the purchase of IPWireless came a list of patents that may very well change the way patent portfolio acquisitions are performed in the future, and the reasons that they are performed as well.
The purchase of IPWireless brought Nvidia and Intellectual Ventures an array of patents involving LTE, LTE-Advanced, 3G and 4G connectivity, measuring right around 500 individual patents. This is a pretty healthy haul, especially given that Nvidia rose to prominence on the strength of their graphics card offerings geared toward PC gamers and similar media enthusiasts.
But while Nvidia is visibly seen expanding into other markets, the purchase isn't so much about Nvidia's diversification as it is the method in which it purchased those patents.
Specifically, Pund-IT's Charles King suggested that such a practice may result in more companies banding together to purchase patent portfolios and share them in a mutually beneficial practice. A recent development in the technology market space has been the rise of patent lawsuits, as companies of various sizes launch legal actions against other companies over infringements – a process occasionally called “patent trolling” – especially when comparatively small firms go after larger companies.
Many of these actions have been launched of late, and the more patents a company holds, the more ammunition they'll have in the event they go to trial. Pund-IT's King further suggested that the more patents a business held, the less likely it would be that “someone would mug you in the courts.”
In Nvidia's case, their rapid development outward into mobile technology, as evidenced by their new Tegra 3 chip – otherwise known as the Kal-El – and their future chip line to come, could attract the attention of Apple, a major competitor in that same mobile technology space.
Nvidia holding a fistful of patents reduces the chance that Apple will come after them over patent infringement issues.
And since both Nvidia and Intellectual Ventures hold at least some kind of rights to the bevy of patents purchased – Nvidia licensed rights to the patents it didn't actually acquire – they both essentially get a win-win out of the deal. This in turn may pave the way for future coalition buying, in which smaller companies like Nvidia get together to buy a large bloc of patents and then share them as necessary.
It's certainly an impressive enough idea and one that smaller firms who don't wield the market clout of a Microsoft, Apple or Google can certainly get behind. Whether we'll see more of this kind of action in the market remains to be seen, but it definitely sounds like the kind of idea that should interest plenty.
Edited by
Braden Becker
