SAN JOSE – Graphics giant Nvidia and patent specialist Intellectual Ventures jointly acquired a set of about 500 patents developed and owned by IPWireless. Terms of the deal that includes patents on LTE, LTE-Advanced and 3G wireless technologies were not announced.
The deal gives Nvidia significant protection from the mobile patent wars as it prepares to ship standalone and integrated baseband modems it acquired last May with startup Icera. Those baseband devices complement Nvidia’s existing Tegra mobile SoC business in smartphones and tablets.
Ownership of the patents was split between Nvidia and Intellectual Ventures with Nvidia licensing the rights to patents it did not acquire in the deal that closed on April 30. “These patents will help support our rapidly expanding efforts in the mobile business,” said David Shannon, executive vice president and general counsel at Nvidia in a press statement.
The deal provides Nvidia “at a minimum provide a freedom to operate if not additional business advantage,” said Mike McLean, vice president of professional services at UBM TechInsights. “Recent examples of these partnerships include the Rockstar consortium acquiring the Nortel portfolio and Microsoft and Facebook dividing patent assets from AOL,” he said.
The acquisition no doubt gives IPWireless a significant infusion of cash and relieves it of the costs of enforcing its patent portfolio. IPWireless retains perpetual, royalty-free access to the patents.
“IPWireless will continue investing and innovating in 4G LTE and other areas of wireless IP,” said Bill Jones, chief executive of IPWireless in the press statement.
To date, “most of [IPWireless’] revenue has been from point-to-multipoint infrastructure using their own unique approach in areas such as WiMAX,” said Will Strauss, prinicpal of market watcher Forward Concepts (Tempe, Ariz.).
The acquisition enriches the already significant patent holding of Intellectual Ventures, a company initially formed to provide defense against patent suits for its original founders including Intel and Microsoft. “This investment provides efficient access to important inventions and standards-essential patents and reinforces our leadership role in building an active market for invention,” said Loria Yeadon, executive vice president of the Invention Investment Fund at Intellectual Ventures, also in the press statement.
Since its founding, Intellectual Ventures has been criticized as becoming too large and powerful, requiring payments from its customers that have grown significantly.
It’s not unusual for multiple companies with related but non-conflicting to pool resources to buy a large and often expensive block of patents. Several groups bid on a large block of patents Nortel sold last year for $4.5 billion.