BlackBerry’s Patent Portfolio Ripe for Picking

BlackBerry’s continuing decline has left it with comparatively little to offer a potential acquirer. There’s a crumbling smartphone business, a too-late-to-market operating system that has failed to capture the imagination of the loyalists that might have pushed the company into turnaround, and a well-regarded messaging service with some 55 million global users that’s under threat from new upstarts like WhatsApp — which already boasts a user base five times as large.

Beyond that? Patents accumulated over a long career of pioneering work in the smartphone space. And it’s likely these that are among BlackBerry’s most valuable assets. Recall that Nortel’s portfolio of more than 6,000 wireless patents sold for $4.5 billion back in 2011 (ironically, to a consortium that included BlackBerry); that same year, Google ponied up $12.5 billion for Motorola Mobility, citing the company’s patent portfolio as part of its rationale for doing so.

So, how much might BlackBerry’s patents be worth? Well, the company currently has 5,236 active U.S. patents and about 3,730 active applications in the wireless communications space. And, according to Chris Marlett, CEO of MDB Capital Group, an IP-focused investment bank, they’re pretty valuable.

Marlett figures that BlackBerry’s IP is worth $2 billion to $3 billion if it were to be acquired by a consortium in some sort of cross-licensing deal. “$2 billion to $3 billion … is easily justified … as there are approximately 9,000 patent assets with probably 100,000 claims that someone could take a shot at you with in a lawsuit,” Marlett told AllThingsD.

But BlackBerry’s IP would be worth significantly more if it’s purchased by a lone company. “If (there’s) a bidding war, I think the number can go as high as $4 billion to $5 billion,” Marlett said.

And while a bidding war is perhaps less likely than it might have been a few years ago, given recent trends in group purchases, it’s not entirely out of the question.

“This is probably the last big and current [wireless] portfolio available,” Marlett said. “I don’t expect any other wireless-focused portfolio this big will come up for sale again anytime soon, so there will be intense interest in this portfolio.”

On the short list of companies likely to be interested in BlackBerry’s IP, the usual suspects: Google, Apple, Samsung and Microsoft. Marlett figures that the first three would want the patent portfolio alone, but he views Microsoft as a wild card that could be interested in something more.

“BlackBerry still has a good enterprise and global footprint,” Marlett said. “Someone like Microsoft could justify paying $4 billion to $5 billion for the business, and $4 billion to $5 billion for the IP, which would yield an $8 billion to $10 billion purchase price.”

Interesting theory. Presumably, Microsoft could also use BlackBerry Messenger and BlackBerry Enterprise Server to improve its enterprise device management and communication offerings. Seems like a long shot, though.