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Thermal imaging company FLIR Systems announced earlier this week that it had acquired more than 200 patents and applications from Tessera Technologies subsidiary DigitalOptics Corporation for US$14.9 million. The deal – which included patents relating to the design and production of complex optical surfaces, substrates, and low cost components, in addition to certain other assets including fabrication equipment – represents a major move forward for Tessera as it looks to focus more closely on its patent monetisation business.
According to a press release from FLIR, the technologies covered by the patents are “used in a wide array of industries and applications, including security, surveillance, photolithography, data communications, laser-based medical equipment, and 3D gesture recognition”.
IAM has previously reported on the recent boardroom upheaval at Tessera and the influence of investor Starboard Value. The activist shareholder nominated six of its own candidates for election to Tessera’s board; and earlier this month, the company announced that all six would be taking seats. In the lead up to this move, Tessera streamlined its senior executive team, with Barney Cassidy’s tenure as president of Tessera Intellectual Property Corporation ended less than a year after it had begun and all IP matters being reported directly to the company’s interim CEO instead.
While Tessera had made clear its intentions to divest its DigitalOptics assets prior to Starboard’s intervention, the sale of 200-plus patents and applications marks the beginning of what is likely to be a major monetisation drive at the company. Starboard has demonstrated its keenness to aggressively leverage IP assets before; and, considering the investor’s track record and the potential in Tessera’s patent portfolio, it looks as if history may be about to repeat itself.
As all this happens, it is worth recalling what current chairman and then interim CEO Richard Hall said about Starboard’s plans in an article he wrote in May for Forbes. Under the headline 'Don’t Turn My Company Into A Patent Troll', he began:
For perhaps the first time in U.S. corporate history, stockholders of a public company will vote on May 23 on whether to turn a technology innovator into a patent troll. As chairman and interim CEO of that company, Tessera Technologies … and as a man who spent my adult life creating stockholder value by serving customers in the marketplace rather than bushwhacking defendants in court, I pray that our stockholders vote no.
He then stated:
… Starboard’s plan is not simply to cut costs. It proposes to eviscerate Tessera’s R&D and rely instead on hyper-aggressive patent troll-style litigation to build revenues. In the words of Starboard’s own proposal, “Action #1” is to “reduce IP cost structure (R&D),” engage contingency fee lawyers (i.e., legal bounty hunters) to “take more assertive action” against customers and licensees, and “file additional infringement claims.”
Now it’s up to Tessera’s stockholders to decide which path to pursue: invention or litigation. Washington and most of corporate America have already made their positions clear.
As we now know, Hill did not get what he wanted. Starboard did. But, it seems, he has made his peace with the activist shareholder. It would be interestng to know what changed his mind.
IP management, IP litigation, Patents, IP business