BlackBerry isn’t feeling BLU.
The Canadian company has launched its second patent related lawsuit this month, this time, against BLU Products, (whose name, interestingly, is an acronym derived from the words “Bold Like Us”). Founded in 2009, manufacturer BLU is based out of Miami.
BlackBerry claims “BLU infringes multiple BlackBerry patents by using, without authorization, BlackBerry’s proprietary technology in BLU’s commercial mobile devices”.
The suit also claims “BLU has earned substantial revenue selling 2G, 3G, and LTE-compliant products that use BlackBerry’s technology. Those sales have propelled BLU to become, in its own words “one of the fastest growing mobile phone manufacturers in the world”. BLU has sold more than 30-million Android and Windows phones, worldwide.
BLU was reportedly offered the ability to licence BlackBerrys products legally but apparently ignored BlackBerry’s offers to negotiate a settlement.
BlackBerry has noted 15 separate infringements, which include:
• 7,969,924 – Method and apparatus for state/mode transitioning
• 8,483,060 – Method for configuring a telecommunication system
• 8,406,118 – Scattered pilot pattern and channel estimation method for MIMO-OFDM systems
• 8,472,567 – Detecting the number of transmit antennas in a base station
• 8,265,034 – Method and system for a signaling connection release indication
• 8,625,506 – System and method for determining establishment causes
• 7,933,355 – Systems, devices, and methods for training sequence, transmission, and reception
• 7,050,413 – Information transmission method, mobile communications system, base station and mobile station in which data size of identification data is reduced
• 8,489,868 – Software code signing system and method
• 8,713,466 – Dynamic bar oriented user interface
• 8,402,384 – Dynamic bar oriented user interface
• 8,411,845 – Handheld electronic device having improved phone call log, and associated method
• 6,271,605 – Battery disconnect system
• 8,745,149 – Handheld electronic device and associated method providing time data in a messaging environment
• 8,169,449 – System compositing images from multiple applications
Earlier this month, BlackBerry went to battle with tech company Avaya claiming it had violated eight patents, including some that date back to 1998. BlackBerry reportedly reached out to Avaya in December of 2015.
Desk phones are becoming smart phones….
BlackBerry reportedly owns approximately 44,000 patents, but estimates of the value of this intellectual property vary widely.
In 2013, then Scotiabank analyst Gus Papageorgiou estimated the worth of BlackBerry’s patents at $4.26 per share, which would amount to more than $2 billion. But Bernstein Research analyst Pierre Ferragu pegged the value at less than half that, at between $800-million and $1.5-billion. But former Cormark analyst Richard Tse last year said maybe the issue wasn’t so cut and dry.
“If you have followed BlackBerry, even remotely, you will know that one of the big questions when it comes to valuing the stock, whether it is to determine the base value for the stock is the value of BlackBerry’s IP,” says Tse. “When it comes to the financials, IP is largely represented by “Intangible assets” on the company’s balance sheet. We would note that this “Intangible assets” are also recorded on a net basis which includes the impact of amortization. The bear thesis on BlackBerry is often that this IP is not worth much. Yet, if we look at the financials, we have seen little in the way of writedowns. And perhaps more interestingly, if there was no value, why would the company be licensing such technology without intensive litigation. In this fiscal year alone, we have seen a number of IP licenses deals with multiple this quarter for a combined $53 MM, with one deal carrying a recurring 10-year trailer beginning in 2018. Earlier this year, we saw BlackBerry and Cisco sign a broad patent-cross licensing agreement and another IP deal with an unnamed company. To us, that suggests we need to consider this value as incremental in valuing this name”.