Talk Canadian technology in the United States and you’ll hear BlackBerry first, perhaps a mention of Nortel or the CanadaArm a distant second. Beyond that? Not much, as the Toronto Stock Exchange has increasingly developed a worldwide reputation as a mining and metals haven.
But right now in courtrooms U.S judges are determining, with increasing regularity, that many inventions popularized in the Lower 48 are actually the property of Canadian firms. A trio of Ontario based, TSX listed stocks, Wi-LAN (TSX:WIN) 01 Communique (TSX:ONE) and MOSAID (TSX:MSD) have quietly posted double and triple digit gains as they receive favorable news from places like Texas, California and Virginia.
Wi-LAN, founded in Ottawa in 1992, has developed a range of communications and consumer electronics products including routers, 3G handsets and WiMAX base stations. The Company now has nearly a thousand patents, and has already licensed their technologies to blue chip techs such as Cisco, Nokia, Panasonic, Samsung. In doing so, the company’s revenue has climbed from just over $2 million in fiscal 2006 to over $35 million in 2009.
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Wi-LAN appears to walk softly. In what some may characterize as typically Canadian style, the company says they “offer reasonable royalty rates that are not overly burdensome to companies and markets yet generate a fair return for Wi-LAN”. However, the company clearly has developed another side and US blue chip tech companies are starting to find out they don’t really like Wi-LAN when they are angry.
In October, 2007 Wi-LAN filed patent infringement claims against 22 companies, including Apple, Hewlett-Packard, Intel, Sony and Toshiba over technology relating to Wi-Fi and power consumption in DSL products. The Company also has a wide ranging suit against several blue chips regarding technology in wireless handsets. LG was first to show a crack in the armor; settling for what some estimate could be more than $40 million. And then there’s the litigation pending regarding the popular V-Chip technology, which it began licensing to TV manufacturers in 1999.
As a result of the good news in the courtroom, shares of Wi-LAN have moved from $4.26 on December 20th of last year to a high of $6.40 on January 4th. Optimistic Wi-LAN investors expect that the writing is on the wall, and that most of the companies sued will settle into proper licensing deals, which could be worth upwards of half a billion dollars.
Shares of Ottawa’s MOSAID have been on a tear since mid 2010, moving from $18.30 on June 8th to over $30 at that year’s end. Revenue and profit for MOSAID has steadily climbed since the company stopped manufacturing products and began to vigorously defend the stable of intellectual property. MOSAID formed in 1975 and for a time was best known for its key circuit technology, an innovation used in the memory of most of the world’s computers. The Company now has an extensive portfolio of significant semiconductor IP among its more than two thousand patents to defend.
MOSAID recently settled a patent license agreement with IBM, that resulted in a five year licensing agreement, a result similar to the one they had achieved with Texas Instruments earlier in the year. MOSAID is currently embroiled in a dispute with Cisco over Power over Ethernet patents (POE), which which allow electrical current to be passed along the same cable as data. MOSAID is currently receiving revenue from the 300 odd patents they own in the POE space.
The relative newcomer to the intellectual property party was the top performing Canadian technology stock of 2010: 01 Communique. 01’s Virtual Private Network software products, such as their I’m in Touch line, allow computers to be accessed from remote locations. Sound familiar? It should. Remote access products have taken off in the past three years and 01 Communique believes they deserve a slice of the pie. And, apparently, so does the US patent examiner. On July 8th, 01 was declared the victor in a patent litigation suit against giant Citrix Systems, the judge ruled GoToMyPC and GoToMeeting infringed on 01 Communique’s IP. Soon after 01 filed a similar lawsuit against Dell for that company’s LogMeIn line. In an interview with Cantech Letter this past summer, 01 boss Andrew Cheung pointed out that the company had “spent 10+ years and over $15m developing this technology.” 01 Communique is clearly serious about defending this heritage; in late 2010 the company opening up an office staffed with business development personnel in Arlington VA, Virginia is a key US district for intellectual property defense.