Acquisitions are a major vehicle for mobilizing corporate resources to deliver value, but frequently end up destroying rather than creating value. Software patents are really inside the high-technology realm, not only applied for neither own various products nor protect future benefit. The valid patents are not offered for sales in countries where the sales of such products constitute patents infringement and the liability for patents breach is exclusive at buyers’ risk. In order to prevent chain prosecution for other competitors, maximally enhance numinous patents are useful artifice as well as safeguard shareholder wealth against continuous litigate. Moreover, a victory from patent battle can allow the company to issue a sales limitation or ban of their rivals, either constrain the losing party to pay huge licence fees instead.
As reported by the BBC News at January, Intel announced the buys RealNetworks' patents and video coding technology. During whole transactions, over 170 patent applications and a commitment to co-develop and share RealNetworks' video encoding software to maintain Intel drawback: software and media. After success acquisition, Intel planned acquires all foundational media code and other patents which company needs. “Expanding Intel's diverse patent portfolio and strengthening our focus on innovation in new markets" said by company spokeswoman. Nevertheless, competitors like Motorola Mobility, Apple, telecom, Google and so on are feasted their envious eyes on the RealNetwork's main product included Real One Player® and video technologies. By purchasing part of RealNetwork's library Intel buys itself protection against claims from other firms and also can potentially block rivals using the same techniques. There are example for massive purchased patents, in August Google agreed to buy Motorola Mobility and its 23,500 patents for $12.5bn. The search firm also acquired close to 1,200 patents from IBM. Recently, many analysts also put much emphasis on their research that indicates how many intellectual properties the high technology company are the critical value for measure future development.
As I mentioned above, intellectual properties are the core assets for high-tech developer and new patents input can generate more and more innovative technology provided just the catalyst the needed. "Intellectual property is still a massively important commodity and there are global consumer electronics titans fighting each other in a cutthroat business," said Ben Wood, director of research at the consultants CCS Insight. Thus, purchasing patents will be defined as variant way of investment which abnormal sense than traditional company will clarify as. "There is still real value and significant strategic advantage to be claimed by striking careful and shrewd deals in the hi-tech sector," said Jonathan Radcliffe, the patent lawyer. This "investment" decision must require close integration of strategic and financial analysis. In my opinions, a strategy investment decision is a major outlay to increase the markets proportion or defended as a competitive position with continuous generate long term income.
Every coin has a flip side, the gigantic patents holder Kodak filed for bankruptcy protection recently. The 133-year-old firm has struggled to keep up with competitors who were the pioneer advocate to change to the digital age. But, Antonio Perez, Kodak's chairman and chief executive despise carryon challenger. Over focus all income basic upon selling film, then the digital camera came along and not realise the full digital era already coming. Technology developing too faster than whatever you imagine. Only took few decade, owned over thousand patents still cannot salvage Kodak’s hereafter.
Each company have to made multitudinous difficult decisions at every day. Each decisions whatever magnitude, strategic investment decisions are also the heart of shareholder value management. They must take own responsibly to all shareholders before making a wrong mistake that cannot be remedy. Think about how many impact on competitive positing could be influence and the key uncertainties for future alignment both within acquisition process.
Undoubtedly, every company running business is not voluntary. The equity money comes from each shareholders need to bear on it. In short, Kodak illustrate a bad example for holding patents precedent provided indicates that the quantity of how many patents owned are not adequate when a new revolution come and how Intel do not let such a little acquisition puff them up. The reason for this is if the company over arrogant could result the same calamity like Kodak. Keep innovation and never stop creative are the only solution to emulate the leadership in semiconductor chip maker industry. Shareholder value is an absolutely critical concept in the modern management so company must spare no effort to maximise the shares wealth as well as fulfil each shareholders satisfaction.
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