For three years, Skyhook has been battling with Google over multiple location-positioning patents. With the acquisition of Skyhook by TruePosition, the opposition to Google will now be a more "well-heeled" opponent with more resources to afford the long litigation timeline and possible issue escalation (international scale).
The point that the article emphasize is it is a matter of if, not a when, that the trial will take place. There has been speculations that TruePosition would be more willing to settle the matter. Yet, that would be illogical because the acquisition of Skyhook is mainly for its IP. For the company to flaunt the matter in a PR release then to settle a case without benefiting from royalties would not make sense. Therefore, to not devalue the portfolio that it just acquired a push for a trial with a push to win is most likely in the cards.
I think it is interesting that TruePosition decided to follow through with the acquisition even though Skyhook is in the middle of the dispute with Google. From my experience in working in mergers and acquisition transactions, when a large dispute is identified in due diligence, it is more likely that the transaction will not take place. The reason being that it would be very risky for the buyer to gamble on the dispute. For if it is a loss the negative PR will label the transaction as one that is not beneficial for the company.
Article on Foss Patents
If a company is in the middle of dispute and another company takes over, does that company take over the disputed case as well? It looks like Google is in patent litigation with tens and hundreds of company. I wonder how much they pay for legal fees. It's reasonable that they sold it off. Maybe they weren't ready to fight Google.
ReplyDeleteI agree with you that an acquisition is not likely to happen when a company is in a litigation battle. However, I think TruePosition must have well-thought about the odds of winning over the lawsuit, otherwise it makes no sense to me they are buying Skyhook.
ReplyDeleteOr maybe that would be the bargaining reason for TruePosition since they need to take over the risk of litigation as well?