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InterDigital’s acquisition of Technicolor

- How well do their Patent Portfolios combine?

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InterDigital-Technicolor Acquisition – Patent Portfolio Analysis

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InterDigital’s Acquisition of Technicolor’s Patent Licensing Business Technicolor, the French media and entertainment company, is selling its patent licensing business to the

US wireless technology provider InterDigital in a deal worth $475 million. As part of the deal, InterDigital

will acquire most of Technicolor’s patent portfolio (more than 21,000 patents), excluding some mobile

patents, a small number of patents for nascent technologies and some patents associated with patent

pools.

The sale, which is expected to close in mid-2018, includes an upfront payment of $150 million. In addition,

Technicolor will receive 42.5 percent of all future cash receipts from InterDigital’s new licensing activities

in consumer electronics. InterDigital will also grant back a perpetual license to Technicolor for the patents

acquired in the transaction.

Analysis Motivation The above acquisition more than doubles the size of InterDigital’s present patent portfolio. The

expectation is that the deal will greatly increase InterDigital’s technology coverage in mobile devices and

display and video technologies. The combined portfolio will now give InterDigital an entry into the

consumer home electronics market with access to technologies covering set-top boxes and video

streaming devices.

The motivation for doing this analysis was firstly to understand the technology coverage of the patent

portfolios of each of the above transacting companies. A second and more important objective was to

study the portfolio fit between InterDigital and Technicolor. In effect, how well the two portfolios

complemented each other – to deliver the expected growth from the increasingly related areas of mobile

and video technologies.

Analysis Methodology • Individual taxonomies were created for the portfolios of InterDigital and Technicolor to

understand the various technology categories covered by each portfolio.

• The individual portfolios were mapped to their respective taxonomies to give the patent assets

held in each of the sub-categories by the companies.

• The above taxonomies were combined to create a composite taxonomy to determine the

technology coverage of the combined portfolio post-acquisition, and to study the portfolio fit of

the two companies.

• The numbers shown are for patent applications that are currently in force.



http://ir.interdigital.com/file/Index?KeyFile=392406162



Insights • Technology areas covered by each portfolio

InterDigital - The key technology areas addressed by InterDigital’s portfolio include wireless and

related technologies. The top few are listed below.

o Wireless Communication Networks

o Signal Transmission

o Multiplex Communication

o Communication Switches & Relays

Technicolor - The key technology areas addressed by Technicolor’s portfolio are related to video

and video processing as shown below.

o Pictorial Communication (Video)

o Digital Data Processing

o Information Storage

o Image Data Processing

• Patent Quality

Both portfolios have a fair number of high quality patents in their key focus areas, based on

Relecura’s Star Rating – scoring 3 or more out of 5.

• Excellent Portfolio Fit

The two patent portfolios complement each other very well and exhibit an excellent fit.

This is indicated by the portfolio fit table in the following section with a granular comparison of

the patents in each portfolio for the different technology categories. The color coding indicates

the relative strength of each portfolio in the individual sub-categories.

InterDigital’s focus on wireless technologies is evident from its significant patent assets in the

various sub-categories related to this area. Similarly, Technicolor’s portfolio brings with it many

patents addressing technologies related to video, video processing, coding/decoding and displays.

A good portfolio fit with the target company is one of the objectives an acquisition seeks to

achieve. The acquiring company would like to either fill gaps in its portfolio or acquire a company

whose patent portfolio complements their own. This in turn extends the technology coverage of

the overall patent portfolio and offers the possibility of introducing new products and tapping

fresh markets.





InterDigital-Technicolor – Portfolio Fit The number of patent applications in each portfolio is given for the sub-categories coded





InterDigital – Portfolio Taxonomy





Technicolor – Portfolio Taxonomy





Key Technologies InterDigital

Technicolor





Patent Quality InterDigital

Technicolor





Portfolio Taxonomies (Tabular Representation)

InterDigital





Technicolor





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About Relecura

Relecura is a full-stack cognitive cloud platform that provides custom intelligence and reports on patent

portfolios, technologies and companies. It does this by capturing and organizing the knowledge from

various document repositories (patents, scientific literature) and subject matter experts in a flexible and

collaborative manner, into a knowledge-base.

Relecura offers IP analytics tools and a custom enterprise platform to corporations, law firms, IP services

firms, R&D organizations and academic institutions. The enterprise platform integrates the discovery and

analysis of public documents with internal company documents. Relecura also has an API to help create

custom tools for IP and business intelligence. For more details visit www.relecura.com.

Disclaimer

This document is provided for information purposes only and the contents hereof are subject to change

without notice. This document, including the information and analysis and any opinion or

recommendation, is neither legal advice nor intended for investment purposes. This document is not

warranted to be error-free, nor subject to any other warranties or conditions, whether expressed orally

or implied in law, including implied warranties and conditions of merchantability or fitness for a particular

purpose. Relecura Inc. specifically disclaims any liability with respect to this document and no contractual

obligations are formed either directly or indirectly by this document.



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