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More details of Qimonda's 7,500 patent sell-off revealed

I have received some more information about the proposed sell-off of 7,500 patents and applications owned by bankrupt semiconductor company Qimonda. Late last week, you will recall, I wrote a piece speculating that this could be the biggest direct patent sale there has ever been, while stating that it was doubtful it would raise the amounts the Nortel and AOL patents generated. Nothing in the information I now have leads me to change my mind on that, but maybe I am wrong.

It seems that a Frankfurt-based KPMG corporate finance/M&A team has been hired by the administrator of Qimonda’s estate to organise the sale. They have put together a short note which they are sending out to parties they have identified as prospective buyers of the portfolio, the substance of which reads:

KPMG has been retained by Rechtsanwalt Dr. Michael Jaffé, acting in his capacity as insolvency administrator over the estate of Qimonda AG (“Qimonda”) to conduct a structured sales process for the patent portfolio of Qimonda, a unique opportunity to acquire around 7,500 worldwide patents and patent applications with relevance for the semiconductor, computer and mobile phone industry.

For further information please find attached an Investment Overview.

Please note that the submission of a formal expression of interest will be required to qualify for the further bidding process. If you are interested in participating in this process, please contact one of the individuals named below. We will then provide you with further guidelines for formulating an expression of interest.

You can see a copy of the Investment Overview here. What it tells us is that:

The patent portfolio comprises more than 7,500 patents and patent applications (approx. 6,800 granted patents and approx. 700 patent applications). It is the result of a rigorous portfolio reduction with focus on quality of formerly more than 15,000 patents and patent applications. The portfolio includes approx.

• 4,200 patents and patent applications in the US,

• 2,200 patents and patent applications in Germany, and

• 1,100 patents and patent applications in other jurisdictions worldwide.

The portfolio covers a wide range of emerging technologies, production processes, circuit concepts, products and systems. Administration, exploitation and licensing of the portfolio is conducted through an IP-team of 15 employees.

Particular value lies in patents relating to applications in the computer and mobile phone industry.

Furthermore:

Since 2009, a dedicated team of IP specialists conducted an intensive portfolio analysis to identify the most valuable patents. Approx. 2,000 claim charts regarding the portfolio’s patents have been prepared.

Documented potential infringements cover

• semiconductor chips (design and manufacturing),

• computers (including laptops, desktops, servers, workstations, netbooks), smart-phones, tablet PCs,

• graphic cards, and

• industry standards.

It also looks like anyone buying the portfolio, or sections of it, will be inheriting on-going litigation in both the US and Germany. However, not surprisingly there is no mention of encumbrances or of whether buyers would inherit on-going licensing revenues (though any deal is said to foresee “the sale of Qimonda’s patent administration, exploitation and licensing business, including the portfolio”.).

Clearly the Qimonda licensing team itself has had a big input into the packaging of what is now being offered, but there does not seem to be any indication that other independent patent expertise has been called in to advise on valuations and transaction options; while there is no indication that the KPMG team – which does not seem to have a great deal of patent-related experience itself – is receiving on-going advice from people that do. And while there are probably legal reasons why the sale itself has to be held out of Germany, I do wonder whether given that most of the assets involved are US patents, there would be a greater chance of maximising sales value if there was a visible US presence in the offering.  


Joff Wild
IAM Magazine
29 November 2012

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Licensing, IP litigation, Patents, IP business, IP valuation

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