The search for companies with valuable patents is changing the landscape of mergers and acquisitions in San Diego and indeed across the country. At one time, patents were rarely part of the equation when companies were considering whether an acquisition was a good move, or considering what a potential target might be worth.

No more. Google recently paid $12.5 billion for its acquisition of Motorola Mobility. They paid an extraordinary 63 percent premium for the privilege. Google executives justify paying so high a price based on the cache of patents held by Motorola. Alcatel-Lucent, Kodak, Nokia and Research in Motion all have vast patent holdings in mobile technology and are being looked at closely as potential quarry for, at a minimum licensing deals, all the way up to complete takeovers.

One managing partner of a major patent advisory firm commented that, “The Motorola deal was a seismic event, patents are now driving mergers and acquisitions and that’s driving up valuations.”

Analysts say that the Google deal has brought to light the importance of patents in mobile technology along with hefty prices that major players in mobile technology will pay to keep them out of the clutches of competitors. The feeling among analysts is that as the Web continues its migration to mobile technology and patent suits climb, the value of patents held by mobile technology companies will rise in financial worth.

The summer of 2011 has seen deal making for patents on an absolute tear.

In July, I.B.M. sold Google 1,000 patents after Google lost its bid to buy 6,500 from Nortel Networks. Those patents were sold to a consortium led by two of Google’s most fierce competitors Apple and Microsoft. The consortium bid $4.5 billion.

Some mergers and acquisitions lawyers and analysts wonder, though, if the recent high prices for patents will cause companies to over-value patents that they hold. For the time being, that does not seem to be a danger.

Source: Dealb%k “Quest for Patents Brings New Focus in Tech Deals” Aug. 16, 2011