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Nokia sells off 500 patents to video ringtone company Vringo for $22 million

Nokia sells off 500 patents to video ringtone company Vringo for $22 million

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A few weeks after posting a $1 billion operating loss in Q2, Nokia has managed to secure an influx of cash by selling 500 of its patents to Vringo for $22 million.

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Nokia Q2 2012
Nokia Q2 2012

A few weeks after posting a $1 billion operating loss in Q2, Nokia has managed to secure an influx of cash by selling 500 of its patents to Vringo for $22 million. The patents primarily relate to cellular and telecommunication infrastructure, with Nokia receiving cash as well as "certain ongoing rights in revenues generated" from the patents it sold. According to the Wall Street Journal, most of these patents were granted in the late 1990s and early 2000s, with a number of them relating to "third generation and fourth generation" wireless technology.

Vringo describes itself as a company "engaged in the innovation, development and monetization of mobile technologies and intellectual property"; its most visible consumer-facing products are "Facetones" and video ringtones. As for Nokia, the company had previously indicated that it would look to sell some of its vast patent portfolio "at the right price" — but this is a relatively small amount of cash, especially in the face of the losses the company has posted recently.

Still, the prevailing opinion among financial analysts is that Nokia is worth little more than the value of the cash and patents it still has — its patent portfolio was recently estimated at between 0.5 and 1.0 Euro per share. Nokia's clearly looking to extract more value from its patents as it continues to struggle; Reuters reported back in July that Nokia had booked a €400 million prepayment from a patent licensing deal, with analysts and patent experts theorizing that Microsoft or Apple were the likely licensees. Compared to that, this new deal is rather small, but it seems $22 million was the "right price" for this group of patents.