Bloomberg News

InterDigital CEO Says Apple-Samsung Case Providing Boost

August 29, 2012

InterDigital Inc. (IDCC:US) Chief Executive Officer Bill Merritt said Apple Inc. (AAPL:US)’s legal victory over Samsung Electronics Co. (005930) showed the value of patents, helping spur demand for the assets his company plans to sell.

Samsung was ordered to pay Apple about $1 billion on Aug. 24 for infringing intellectual property -- a verdict that validated businesses that rely on innovation, Merritt said yesterday in an interview. InterDigital, a wireless technology developer, has been offering batches of its patents to buyers after abandoning a plan to sell the whole company last year.

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“We’re encouraged by the value being placed on patents, and there’s strong opportunity in the market,” Merritt said at Bloomberg’s headquarters in New York. “As with any market that’s strong, you want to move quick.”

The company already agreed to sell about 1,700 patents, about 8 percent of its portfolio, to Intel Corp. (INTC:US) for $375 million in June. InterDigital, based in King of Prussia, Pennsylvania, said in its annual report that it received royalties from more than half of all 3G, or third-generation, mobile devices sold last year, including ones from Samsung, Apple, Research In Motion Ltd. (RIM) and HTC Corp. (2498)

InterDigital, which has about 20,000 patents in total, said in July 2011 that it had hired Evercore Partners Inc. (EVR:US) and Barclays Plc (JNK:US) to explore a possible sale of the company, seeking to capitalize on a boom in demand for patent portfolios. The company later found that buyers were more interested in portions of the portfolio worth less than $1 billion, Merritt said.

Potential Buyers

Buyers of mobile patents could include Samsung, Google Inc., Amazon.com Inc., Nokia Oyj or any mobile manufacturer, said Kevin Stadtler, president of Stadtler Capital Management LLC in Fort Worth, Texas, who owns about 20,000 shares of InterDigital.

“The real beneficiaries following the Apple-Samsung lawsuit are the companies that own intellectual property, the patent arms merchants,” Stadtler said. “People are seeing how this is disrupting Samsung’s momentum.”

InterDigital shares (IDCC:US) fell 2.2 percent to $33.68 at the close in New York. The stock has declined 23 percent this year.

A jury in San Jose, California, found Aug. 24 that Samsung infringed six of seven Apple patents at stake in the trial. The jury also determined that all of Apple’s patents at stake were valid. Apple won findings that Samsung devices diluted the value of its so-called trade dress, or how a product looks.

To contact the reporter on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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Companies Mentioned

  • IDCC
    (InterDigital Inc/PA)
    • $54.36 USD
    • 0.03
    • 0.06%
  • AAPL
    (Apple Inc)
    • $113.99 USD
    • 1.98
    • 1.74%
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