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BlackBerry said to be sitting on a ‘patent goldmine’

Published Aug 27th, 2013 4:45PM EDT
BlackBerry Patent Portfolio Value

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As BlackBerry explores a number of options that might help it reverse the troubling course it now finds itself on, valuing the company is beyond difficult. Industry watchers are currently debating the issue at length, of course, and since some believe the company’s smartphone business is “essentially worthless,” most analysts are focused on BlackBerry’s enterprise services and its patent portfolio. Earlier estimates valued BlackBerry’s 5,236 U.S. patents and roughly 3,730 active patent applications at as much as $5 billion, but Scotiabank analysts put the figure closer to $2.25 billion. Still, The Wall Street Journal said BlackBerry is sitting on a “patent goldmine” in a recent piece analyzing Scotiabank’s research.

“We have been suggesting a value of roughly $2.25B based on a discount to what was paid for the Nortel patents, given the sale of those patents occurred at a particularly opportune time,” Scotiabank analysts wrote. “Again, those patents sold for roughly $1M each and the Motorola patents sold for roughly $735K. Given that BlackBerry maintains roughly 5,136 patents, to get to our $2.25B number the patents would have to sell for $438K each or a 40% discount to the Motorola patents and an almost 60% discount to the Nortel patents.”

The Journal notes that timing is working against BlackBerry. Part of the reason the Nortel portfolio fetched such a high price was the rampant patent litigation that swept the mobile industry in 2011. As such, companies were willing to pay top dollar at that point in time. Now, however, the battles have died down and companies are less interested in hoarding patents.

Even still, the report suggests that BlackBerry’s position isn’t quite as bleak as many have made it out to be.

“Alongside about $2.8 billion in cash and short-term investments, the patent portfolio, conservatively valued at $2.5 billion, could mean easy money for investors trying to take BlackBerry private,” the Journal’s Tom Gara wrote. “Scotiabank estimates the company’s cash and patents alone are worth $10.16 per share, and with stock currently trading at $10.53, you basically get a free company included on the side.”

Zach Epstein
Zach Epstein Executive Editor

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content. Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment.

His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.