RealNetworks 'unlocks' value in patent sale to Intel

Alex Zaharov-Reutt
Sunday, 29 January 2012 23:19

IT Industry - Deals

Intel is the latest company to buy up some patents, but rather than spending billions upon billions of dollars, it seems to have picked up a relative bargain, snapping up RealNetwork's patents for just over one tenth of a billion, at $120m.

It seems to be the most unexpected patent purchase of the year thus far, but Intel has purchased a stack of RealNetwork's patents, along with its 'next gen video codec software', for a relatively cheap $120 million.

This compares with the multiple billions of dollars that changed hands for patents in 2011, along with the billion-dollar plus patent purchase price that Kodak was seeking, but couldn't find a buyer for, leading to Kodak's Chapter 11 bankruptcy.

No such situations are affecting RealNetworks, however, with the streaming media pioneer even managing to 'retain certain rights to continue to use the patents in current and future products' in what sounds like a pretty sweet deal for Real, seemingly let it sell its cake and eat it too - at least, for the foreseeable future.

Thomas Nielsen, the President and CEO of RealNetworks, said in a statement that: 'Selling these patents to Intel unlocks some of the substantial and unrealized value of RealNetworks assets. It represents an extraordinary opportunity for us to generate additional capital to boost investments in new businesses and markets while still protecting our existing business.

"RealNetworks is pleased Intel has agreed to acquire our next generation video codec software and team. Intel has a strong reputation as a technology innovator, and we believe they are well positioned to build on the development work and investment we've made in this area', continued Mr Nielsen.

Renée James, Intel's senior VP and GM of its Software and Services Group said that: 'As the technology industry evolves towards an experience-centric model, users are demanding more media and graphics capabilities in their computing devices.  The acquisition of these foundational media patents, additional patents and video codec software expands Intel's diverse and extensive portfolio of intellectual property.

'We believe this agreement enhances our ability to continue to offer richer experiences and innovative solutions to end users across a wide spectrum of devices, including through Ultrabook devices, smartphones and digital media', added Mr James.

Intel and RealNetworks have also signed an MOU to 'collaborate on future support and development of next-gen video codec software and related products', and proclaimed they looked forward to working with each other. 

The patent sale comprised of 'approximately 190 patents', '170 patent applications' and 'next-gen video codec software', with RealNetworks suggesting the sale wouldn't have 'any material impact on its business'.