Companies go for patent protection in MIPS deal

How do you protect yourself against patent trolls? Make sure the patents never wind up in their hands. That’s the strategy behind a consortium formed to buy up the portfolio of patents on processor design built up by MIPS Technologies, now that the company has been broken up and its core designs sold to Imagination Technologies.

ARM is among the companies that have formed Bridge Crossing, a consortium linked to Allied Security Trust, the organization that is buying the rights to the MIPS patent portfolio. The portfolio includes 580 patents and patent applications covering microprocessor design, system-on-chip design and other related technology fields. The consortium will pay $350m in cash to acquire rights to the portfolio, of which ARM will contribute $167.5 million. The consortium said will make licenses to the patent portfolio available to companies not within the consortium.

“ARM is a leading participant in this consortium which presents an opportunity for companies to neutralize any potential infringement risk from these patents in the further development of advanced embedded technology,” said Warren East, CEO, ARM. “Litigation is expensive and time-consuming and, in this case, a collective approach with other major industry players was the best way to remove that risk.”

This transaction, which is subject to MIPS shareholder approval, and customary closing conditions, is expected to close in the first quarter of 2013. ARM’s contribution of $167.5 million will be funded out of existing cash reserves.