Bloomberg News: Patent Loss to Apple Leaves Sour Taste for Wi-Lan Sale

Bloomberg News -- Susan Decker and Andrew Mayeda - Wi-Lan Inc. (WIN)’s back-to-back trial losses undermines the Canadian company’s strategy of buying patents and suing to obtain royalties, reducing its value in a potential sale.

Wi-Lan said yesterday it was considering a possible sale, after it lost a trial last week against Apple Inc. (AAPL) in which it was seeking $248 million. In July, it lost a trial against Alcatel-Lucent and Ericsson AB, though it later settled with Alcatel-Lucent.

The patent-buying binge of 2011 and 2012 that resulted in the purchase of $4.5 billion worth of patents from Nortel Networks Inc. and Google Inc.’s $12.4 billion deal to buy Motorola Mobility Inc. has cooled. At the same time, a series of court rulings and proposed legislation in U.S. Congress have limited the value of patents owned by companies that don’t make products.

“They won’t command the price they could have gotten a year ago,” said JiNan Glasgow, chief executive officer of patent-research company Neo Patents in Durham, North Carolina. “There’s been a trend showing that only the highest quality patents are standing up in litigation. The most value for patents is when they are actually making or selling products or services and they use the patents to keep competitors out.”

Wi-Lan shares fell 1.2 percent to C$3.26 at 9:33 a.m. in Toronto for a market value of C$394.3 million ($378.2 million). The stock rose 6.5 percent yesterday after the company said it would also consider a dividend payout, joint ventures and asset disposals.

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