With a valuation of over $85 billion and 130th rank in Fortune 500, Qualcomm has indeed come a long way since its humble beginning in 1985. The turning point of their fortune was the mass adoption and implementation of the CDMA standard proposed by Qualcomm in 1990. This was a milestone in their progress and in the following years, they contributed significantly to the development of telecommunication standards.
Be it the development of telecommunication standards, processors, mobile computing or WiFi technology, Qualcomm has always been a hub of innovation with a futuristic approach. Its strong portfolio of 16000+ patents speaks out loud of its innovation quotient.
With such a huge patent portfolio that covers multiple different technologies, it made us ponder:
- Is Qualcomm making the most of their IP treasure?
- Is Qualcomm able to correctly evaluate the actual worth of their patents?
The only way to satiate the curiosity was by analyzing Qualcomm’s patent portfolio. The objective was to find answers to the following questions:
- Has Qualcomm built a high-quality patent portfolio or not?
- Does the portfolio have any low-quality patents?
- Did it kill low-quality patents to enhance its portfolio?
Editor’s Note: When it comes to killing the low valued patents, there could be no better example than IBM. Their patent grant to lapse ratio is almost 50%, making them the one of the top companies with highest patent abandonment ratio. We explored their patent filing and abandonment trend to understand the whys behind this strategy. You can read the analysis from here.
Analysis Of Qualcomm’s Patent Portfolio
Qualcomm has around 6000+ alive patents related to wireless technologies. These patents are mainly focused on LTE, UMTS, GSM, CDMA, Signal processor performance etc. In order to evaluate the worth of these patents, we uploaded these patents on GreyB’s ‘Litigation Strength Predictor’.
The Litigation Strength predictor is a tool that analyzes a patent and gives its litigation probability. A high litigation probability indicates high chances of a patent to get into litigation which in turn represents its high monetization potential. We conducted a similar analysis of A*Star’s patent portfolio too which you can read from here.
Listed below are the top four patents with top litigation probability out of those 6000+ patents, according to the Litigation Predictor. We also picked the top 50 patents from and checked how many of them were monetized by Qualcomm. More on it later.
Let’s have a look at the highlighted patent US6574211. According to the Litigation Predictor, the patent has 99.46% chances of getting into litigation. Thus, it has high monetization potential. We checked the legal history of US’211 and guess what we found? It has been in litigation.
Among the top 50 patents, 3 other patents were part of litigation in the past. US6861980 (95.9%), US6937872 (94.22%) and US6895249 (94.23%) are those patents. The number in parenthesis represents their litigation probability.
Thus, among top 50 patents, 4 were litigated. As these patents were a part of litigation, it confirms their high monetization potential. Further, Qualcomm has enforced all of them.
Yet, there are still 46 other patents. What about them? Good question.
To find that out, we checked whether there are any standard-essential patents in Qualcomm’s portfolio.
How to find whether a patent qualifies to be a Standard Essential Patent or not?
Editor’s Note: A bit of nostalgia hit me as I read this line. A couple of years ago, I had the same question and a colleague helped me with the steps to figure the essentiality of a Standard Essential Patent. Considering the fact that there are many others who would have the same question, we asked Abhijeet to write an article on the method we use internally to check the essentiality of an SEP. The result – An amazing piece that has earned a permanent place in my bookmarks.
Our analysis revealed that 30 out of the remaining 46 patents in Qualcomm’s portfolio were standard essential. We plotted a pie-chart to depict the monetization potential of Qualcomm’s Top 50 patents, which could be found below.
In our analysis, we found that Qualcomm is monetizing nearly 70 % of its top 50 patents. This is a good number. However, there are still 30% patents i.e. 16 in the top 50 which are of high potential but have not yet been monetized.
Further, when we checked the same for top 500 patents, this percentage rocketed to more than 50% i.e. Qualcomm has not monetized more than half of its top 500 patents with high monetization potential. To give an analogy, these patents are diamonds buried in the mine. When discovered and refined, they can make millions for their owner. Unfortunately, most tech companies including Qualcomm are not mindful of the value of these assets.
It isn’t their fault entirely either.
Finding valuable and useful patents is a walk in a park, only if you have a small patent portfolio. It, without wonder, is a daunting task when a portfolio contains thousands of patents. Even top players fail when it comes to the effective monetization of patents. IBM and Microsoft, for example, have failed to realize the potential of many patents. Yes, you read that right. IBM too. Intrigued? Read the entire analysis here: How Microsoft And IBM Are Killing Their Patents?
Identifying patent monetization opportunities is crucial for any business and is demanded to be executed with precision. In our case, we use the Litigation Strength Prediction Tool that helps us execute this daunting task with great precision.
What strategy do you employ?
Read Next: What makes Twitter’s patent portfolio attractive for buyers?
Analysis by: Rajat Vats, Research Analyst, Infringement and Muzammil Hassan, Team Lead, Infringement with the inputs from Anoop Chauhan, Manager, Infringement and Shikhar Sahni, General Manager, Operations
