Samsung Enters the Bidding War for InterDigital Patents

The patent wars in the technology industry just keep raging on. According to a report by Bloomberg, Samsung has now entered the race to acquire InterDigital’s huge patent portfolio, which has more than 8,800 patents related to wireless technology.

A Recap

As I reported a few weeks ago, Google was trying to buy InterDigital’s patent portfolio after it lost the Nortel patent auctions against a consortium comprised of Apple, Microsoft, RIM and others. With Apple, Microsoft and Oracle gunning for it and its Android device partners with patent infringement lawsuits, it is currently in a very desperate position. It needs to build up a huge patent portfolio, and the best way to do it fast is by buying some company which has one already.

Enter Samsung

Samsung has been slapped with multiple patent infringement lawsuits by Apple, which has alleged that Samsung slavishly copied its iPhone and iPad designs to create the Galaxy line of smartphones and tablets. Apple is definitely feeling threatened by the tremendous growth in Samsung’s smartphone sales, and the success of the new Samsung Galaxy S 2.

It seems like Samsung has decided to take matters into its own hands, and get some patents which it can use to defend itself.

InterDigital has a lot of key patents,Lee Seung Woo, a Seoul-based analyst at Shinyoung Securities Co., said by telephone. The fight between Apple and Samsung is getting serious, so if the assets go to Apple, it could be pretty risky for Samsung. To hedge the risk, Samsung could go ahead with bidding, although they may have to pay a big premium.

How It Could Play Out

Since Samsung is the largest Android device manufacturer by sales, Google and Samsung could possibly team up for the InterDigital acquisition against Apple, just like Apple, Microsoft and RIM teamed up against Google during the Nortel patent auctions.

InterDigital’s stock has risen more than 60% since the initial rumors of a possible acquisition. It currently has a market cap of $3 billion. With heavyweights like Google, Apple and Samsung in a bidding war, all with a huge amount of cash reserves, the purchase price could go higher than $5 billion, according to experts.

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