Bonum Certa Men Certa

The 20% Rule: Patent Trolling Suffers Double-Digit Declines and Patent Troll Technicolor is Collapsing

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Summary: Significant demise or total catastrophe for the modus operandi (method) of going after companies with a pile of patents and threats of litigation

Published not too long ago was a sort of eulogy for patent trolls ("Number of New Patent Cases in the US Fell 25% Last Year, Thanks in Part to the Demise of Software Patent Trolls"). They're not doing too well. Some of the biggest ones even collapse or resort to massive layoffs. Not that these people ever produced anything anyway, other than threatening legal letters...



Today we deal with Technicolor (covered here before [1, 2, 3, 4, 5]; it was close to Novell). Benjamin Henrion told me "lots of their boxes runs GPL code without publishing sources." That's a serious licence violation which highlights Technicolor's hypocrisy.

Anyway, Europe's lesser known patent troll ("licensing") firm Technicolor is also dying or at least struggling, based on one of its fans, IAM 'magazine'. To quote this Sunday's report from IAM's editor:

Technicolor CEO Frederic Rose has probably not had the best of weekends. On Thursday, the Paris-based entertainment technology company issued a warning that EBITDA (earnings before interest, tax, depreciation and amortisation) for financial year 2016 is likely to come in at €565 million – significantly less than the €600 million to €635 million that had been anticipated at the end of the third quarter. The shortfall has been caused almost entirely by lower sales than expected of set top boxes in the company’s Connected Home division. On Friday the markets reacted with a sell-off: the company’s share price fell by close to 20%.

However, the news was not entirely bleak. While Technicolor as a whole has failed to deliver the results it was supposed to, its technology licensing operation had a spectacular year producing EBITDA of €190 million – a record amount and a truly noteworthy achievement given a slump in income from the MPEG LA patent pool. In Q4 alone, the patent licensing business – under the stewardship of chief IP officer Arvin Patel – generated revenues of more than $70 million, thanks in part to the conclusion of a series of new deals. That’s quite a performance, albeit one that was trailed at the end of Technicolor’s first half.


We recently saw claims that the EPO was operating loss of €145,000,000 -- a claim we were never able to verify because we lack accounting expertise. But either way, if our interpretation of the above is correct, as "the company’s share price fell by close to 20%" we can expect a similar decline in employment (same in Intellectual Ventures, which fired 20% of its staff a couple of years ago). Technicolor is said to employ over 10,000 people (according to Wikipedia anyway), but having reinvented itself as somewhat of a troll, the company does not deserve to exist anymore. It's a parasite and a burden on society, not just in Europe.

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