From Motorola to LG, where did the patent assets of the giants go?

Jiwei.com reported that as LG Electronics announced its withdrawal from the mobile phone market, the aftermath of related businesses and assets has entered the industry's field of vision. Compared with physical businesses, the patent assets owned by this brand, which once ranked third in the world at its peak, are more favored by the market. According to Korean media reports, Chinese mobile phone manufacturers and US and Japanese patent operating companies (NPEs) are seeking to purchase patents related to mobile communication technology. LG Electronics may monetize patents in non-core areas to reduce fixed costs while retaining core technology patents.

In the past decade, the competition landscape of the global mobile phone market has changed several times, and many brands have fallen before LG. The patent flows of these giants have profoundly affected the global patent licensing situation and even the market competition landscape. A gratifying change is that when Motorola and Nokia withdrew from the market, a large number of patents eventually became assets of NPEs. When BlackBerry cancelled its mobile phone business, Chinese manufacturers such as Huawei and OPPO had already occupied a place among the major patent acquirers. Today, Chinese manufacturers have become the most important competitors for LG Electronics patents.

Motorola patents are largely owned by semiconductor companies

In August 2011, after years of sharp declines in mobile phone sales, Motorola was finally sold to Google. The most important asset Google obtained in this transaction was the 17,000 patents held by Motorola. The reporter checked the patents transferred by Motorola Mobility or with changes in applicants and found that Google is still the largest assignee of Motorola Mobility's patents. Following closely behind is Freescale, which was born out of Motorola's semiconductor department. Surprisingly, Citibank also holds more than 2,000 patents that were once applied for by Motorola Mobility. In 2014, Google sold Motorola to Lenovo. Through this transaction, Lenovo bought about 2,000 patents, so Lenovo is also one of the main destinations for Motorola Mobility's patents. However, due to the complicated changes in the right holders after the transaction, it is not shown in the data above.

It is worth mentioning that a large number of patents leaked from Motorola Mobility were obtained by semiconductor companies, and NPEs and mobile phone manufacturers were not the main buyers. This has a lot to do with Motorola's history. Motorola is one of the earliest semiconductor companies in the world and started to engage in semiconductor business in 1948. One of the most famous semiconductor companies in the world, ON Semiconductor, was established in 1999 by spinning off Motorola's semiconductor department. In 2003, Motorola paid $200 million to spin off the entire semiconductor business, and Freescale was born. More than ten years later, Freescale was acquired by NXP. It is precisely because of these origins that Freescale, NXP, and ON Semiconductor's subsidiary semiconductor component companies have all obtained some of Motorola Mobility's patents.

A large number of Nokia patents flowed into NPEs

Nokia, which dominated the mobile phone market for more than a decade from surpassing Motorola in 1998 to 2011, collapsed in 2013 and was replaced by Microsoft Mobile. The scale of patents applied for by Nokia and whose current rights holders are not Nokia is slightly larger than that of Motorola. From the perspective of the current rights holders of these patents, except for Microsoft Mobile and HMD, the two former and current operators of the Nokia brand, and Qualcomm, all of them are professional intellectual property operation companies, namely NPEs. NPEs actively acquire patents. On the one hand, it activates the intellectual property transaction market and promotes the realization of innovative achievements. On the other hand, it also causes considerable troubles for manufacturers in the mobile phone and other fields. The growth of intellectual property risks from NPEs has become a real dilemma that all technology companies have to face.

Data shows that 2012 and 2015, around the time when the Nokia brand changed hands twice, were the peak periods for Nokia's patent transfers. At the same time, from 2015 to 2019, a large number of patents applied for by Nokia were transferred almost every year. This is related to Nokia's intellectual property operation strategy in recent years. With the decline of the former dominant mobile phone business and the impact of competitors such as Huawei on the communications business, intellectual property has become an important source of income for Nokia and an important weapon for it to maintain its influence in the global market. Patent monetization is becoming a normalized operating method for Nokia.

Chinese mobile phone manufacturers become major buyers

As the old was replaced by the new, by 2016, BlackBerry, which once had a global market share of 50%, also ended up withdrawing from the mobile phone business. Compared with Motorola and Nokia, BlackBerry has far fewer patents, but as of now, there are also thousands of patents applied for by BlackBerry that belong to other companies. The patent assignees are varied, including semiconductor company NXP, software companies Google and Citrix Systems, and communications solution provider Wireless Innovations. There are also patent pools or NPEs, such as Velos Media and Fundamental Innovation. Another company called Ontario Inc is one of the main assignees of BlackBerry's patents, but its specific business is unknown. However, data shows that the company has developed a large number of patents in cooperation with BlackBerry, and both have close ties with Ontario, Canada, so the possibility that the latter is an affiliated institution of the former cannot be ruled out.

It is worth mentioning that for the first time, Chinese mobile phone manufacturers have appeared in the top 10 assignees of BlackBerry's patents. As the two domestic mobile phone manufacturers with the strongest patent strength, Huawei and OPPO both acquired patents from BlackBerry. According to relevant media reports, the BlackBerry patents acquired by Huawei mainly involve the security and basic functions of mobile phones.

Since the news of LG Electronics' withdrawal from the mobile phone market came out, Chinese mobile phone manufacturers have been one of the main forces that have contacted LG Electronics to acquire patents. This undoubtedly confirms the rise of domestic mobile phone manufacturers and the improvement of their intellectual property awareness. If they can enrich their patent pools by acquiring patents from these giants, it will be a great help for these companies to enhance their voice in future patent licensing negotiations and even prevent intellectual property risks.