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Icahn Pushing Motorola to Sell Off Significant Patents – Good Idea or Bad?
7/22/2011
By PJLouis
Tags: Motorola, Nortel, bankruptcy, Carl Icahn, wireless, telecommunications, patent

http://www.wirelessweek.com/News/2011/07/Icahn-Motorola-Significant-Patents-Business/

 

My initial reaction to hearing Carl Icahn’s proposal was shock. Icahn wants to Motorola to sell off significant patents within the Motorola patent portfolio because he saw that Nortel made a bundle off its portfolio.


The big difference between Nortel and Motorola is: Nortel no longer exists except as a bankrupt and shuttered company. Motorola still exists.


I understand the desire to make a lot of money off patented technology but when I hear proposals about making money off patents it is through a licensing program not a sell-off program.


Technology companies create value in many ways and one of those ways is by patenting their technology and then licensing that technology. When you sell off a patent either you no longer have a use for it or are no longer in business. When you sell a technology that still has market value for you and your competitors, then selling it off is insane.


I need to give Icahn’s demand some thought.


This could be a way to make a few bucks quickly. Makes Motorola’s financials look good, of course they could be cutting off their own noses to spite their own faces or taking the first step towards killing off the company.

Here are a few thoughts.  If Motorola sold off their patents, it would have a pile of cash.  What would Motorola do with the cash?  What typically happens to a technology company that has lots of cash but has sold off a significant portion of its strategic value?
PJLouis PJLouis
7/24/2011