Wi-Lan to launch C$480m hostile bid for Mosaid

Wi-Lan Inc. said Wednesday it plans to launch a hostile C$480 million bid to acquire rival patent-licensing company Mosaid Technologies Inc., in another sign of the increasing importance of patents as a source of revenue and protection in the technology sector.

Wi-Lan's announcement of its C$38-a-share bid comes on the heels of Google Inc.'s $12.5 billion deal to acquire Motorola Mobility Holdings Inc. and its trove of patents as a way to fend off potential litigation by rivals and to facilitate settlement negotiations over patent disputes.

The Google-Motorola transaction and the purchase earlier this summer of Nortel Networks Corp.'s coveted wireless patents for about $4.5 billion by a consortium that includes Microsoft Corp., Apple Inc. and Research In Motion Ltd. also demonstrates the importance of size to compete for patents.

Ottawa-based Wi-Lan has over 790 issued and pending patents covering wireless, wireline, and V-Chip technologies, which allows users of digital television receivers to filter out programs they consider inappropriate. By buying Mosaid, its cross-town rival, Wi-Lan would acquire a much larger patent portfolio of 2,822 patents and applications covering semiconductor and telecommunications technologies.

"Combining the patent portfolios will provide a more efficient and rapid path to establishing a larger and more valuable aggregate portfolio given the combined management team's expertise and increased business scale," Wi-Lan said in a statement.

It will also allow the combined entity to access capital to grow the business and fund litigation to enforce its patents, if necessary, Wi-Lan said. "I am a big proponent that bigger is better in this industry," Jim Skippen, Wi-Lan's chief executive and former Mosaid executive, said in a telephone interview.

He joined Wi-Lan in 2006 from Mosaid where he held positions, including senior vice-president, patent licensing and general counsel.A Mosaid spokesman said the company will respond to Wi-Lan's announcement in "due course." Mosaid is scheduled to report its fiscal first-quarter results next Thursday.

Wi-Lan's offer represents about a 25% premium to Mosaid's 10-day volume weighted average stock price. In Toronto Wednesday, Mosaid closed up 0.48% at C$31.65. Wi-Lan ended the session up 2.90% at C$7.09.