11/6/2012 9:41 AM EST
MIPS Technologies, which has been on the block for almost a year, finally found buyers in a complicated deal involving Imagination Technologies and ARM.
NEW YORK -- MIPS Technologies, which had been on the block for almost a year, finally found buyers in a complicated deal involving Imagination Technologies and ARM.
Imagination said Tuesday (Nov. 6) it has agreed to buy MIPS' operating business for $60 million. Under terms of the deal, the U.K. graphics IP vendor will gain 160 engineers and 82 MIPS patents.
The move is viewed as a way for Imagination to beef up its CPU core expertise while defending its graphics lead. It would also position Imagination to competing against ARM, which has been pursuing its integrated CPU-GPU solution strategy.
Separately, ARM said it will lead a consortium buying the rights to the MIPS portfolio of 498 patents. The consortium, called Bridge Crossing LLC, will pay $350 million in cash to purchase the rights to the portfolio, of which ARM will contribute $167.5 million.
Bridge Crossing is an acquisition vehicle for Allied Security Trust (AST), a consortium of companies with a history of buying up patents. The consortium often sells off or licenses those patents. Consortium members include Avaya, HP, IBM, Intel, Motorola, Oracle, Philips, Research in Motion and others.
J. Scott Gardner, a senior analyst at The Linley Group, said “ARM purchased rights to all of the MIPS patents, so they have legal peace.” What remains unclear, however, is whether companies such as Qualcomm, Broadcom and Apple will have to purchase their own licenses for access to the AST portfolio, Gardner added. “As I understand it, the entire purpose of AST is to keep patents from falling into the hands of trolls. I assume that these other companies are part of the AST group and are also safe," he said.
Asked during a conference call, which companies belong to AST and who have access to the MIPS portfolio of 498 patents, Imagination and MIPS executives declined to provide names.
Imagination CEO Hossein Yassaie did say 82 of the patents acquired in the deal cover key aspects of the MIPS architecture. That will help Imagination to move MIPS architecture "go forward," he noted, while protecting royalties coming from current and future MIPS licensees. Once the Imagination-MIPS deal is completed, MIPS royalties will go to Imagination, not to AST, Yassaie said.
For those customers seeking to license MIPS technologies, Yassaie said they will go through Imagination, not the consortium. The 498 MIPS patents bought by ARM-led consortium provide the group with general patent protection rather than access to specific parts of the MIPS architecture, he added.
ARM and others in the consortium are hoping that the deal will reduce the risk of infringing any MIPS patents. The consortium will make available licenses to the patent portfolio to companies outside the consortium, ARM said.
"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," ARM CEO Warren East said in a statement. "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."