Universal Display’s €87 million BASF purchase underlines continued interest in big-money patent deals

US company Universal Display Corporation (UDC) has acquired a patent portfolio relating to organic light-emitting diode (OLED) technology from Germany’s BASF for €87 million (approximately US$96 million). The deal shows that even in today’s tough climate, there is still appetite for high-value patent purchases if the right conditions exist.

Under the terms of the deal announced on 28th June, UDC will acquire more than 500 issued and pending patents comprising 86 patent families with coverage across multiple jurisdictions. The assets in the portfolio have an average remaining lifespan of 10 years and largely cover phosphorescent materials and related technologies.

Interestingly, the press release put out by the two companies suggests that BASF “ceased its OLED research activities at the end of 2015 after a careful strategic examination”, while UDC’s procurement of the portfolio is slated to accelerate its development and delivery of an all-phosphorescent emissive stack. “We believe that this acquisition will help further these research efforts, principally in the development of commercial blue emissive systems,” Steven V Abramson, CEO at UDC, is quoted as saying.

In other words, this patent transaction is very much seen as a win-win by both of the involved parties. For its part, UDC gets to speed up its R&D efforts by bringing in relevant intellectual property from a highly respected source; while BASF is able to divest itself of potentially costly assets that are no longer applicable to its forward business plans.

Of course, there are a variety of other strategic goals that can be achieved with large-scale patent transactions. One pertinent example is Xiaomi’s acquisition of 1,500 Microsoft patents, which is perhaps the largest patent-driven deal that has been announced so far this year. Under the terms of this deal, Xiaomi agreed to include certain Microsoft programmes on its mobile devices, furthering the US company’s objective of increasing the distribution of its software in emerging markets. Xiaomi – in desperate need for IP protection as it looks to expand into new markets – got a hefty bundle of patents in return. Again, it looks like a big win-win for both parties.

With the impact of legislative reforms, the inter partes review regime and a stream of what is arguably patentee-unfriendly jurisprudence in the United States, you could be forgiven for thinking that eight-plus figure patent deals were a thing of the past. But the UDC-BASF and Xiaomi-Microsoft purchases prove that there is still steam in the idea of big-ticket patent transactions – as long as there are sellers and buyers out there that feel that such deals are the best route for them to realise their strategic objectives.

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