AlcaLu Joins the Patent Chase

BASKING RIDGE, N.J. -- Alcatel-Lucent is turning its attentions once again to the patent licensing business and claims it is on track to meet its initial target of €100 million (US$135 million) in annual revenues per year.

CEO Michel Combes told journalists and analysts at the vendor's 2013 Tech Symposium on Thursday that the company was "late in coming to the game" compared with rivals such as Ericsson AB.

"There's a strong, solid portfolio of patents within Alcatel-Lucent," he said. "It's fair to say that it probably has not been a strong area of focus and monetization in the past. That doesn't jeopardize the quality of our patents," added the CEO, who is looking at various ways of improving the company's financial position as part of his Shift Plan strategy. (See Alcatel-Lucent to Raise $2.7B and Alcatel-Lucent Builds Future Around IP.)

He said Alcatel-Lucent had previously tried to license patents through an external partnership, but with limited success. It has now set up its own team of patent experts to "make sure we try to extract value." (See AlcaLu CEO 'Not Selling the Family Silver'.)

He said the company raised €28 million ($38 million) from patents in the third quarter, tracking to hit the vendor's €100 million target. He noted that Ericsson was raising as much as €800 million ($1.08 billion) a year from its patents, although much of this came from CPE and device technologies.

But Combes said the new strategy would require a different culture in AlcaLu research teams. "They need to think a little about how to monetize" while developing new technologies, he said.

During the AT&T monopoly period, Bell Labs invented and gave away game-changers such as the transistor, the laser, cellular network technology, and the charged couple device. Many of these were later used by competitors against the company.

Combes said Alcatel-Lucent won't be giving away the farm this time. "If you want to monetize... you want to keep some for yourself to have a competitive advantage," he said.

— Robert Clark, contributing editor, special to Light Reading

Disclosure: Robert Clark traveled to Basking Ridge as a guest of Alcatel-Lucent.

MarkC73 11/18/2013 | 2:21:13 AM
Re: $135 million a year from patent licenses Or perhaps to word it another way, if they can't make $135 million off their patents, they better go back to the drawing board.
DOShea 11/17/2013 | 5:01:45 PM
Re: $135 million a year from patent licenses Agree that this is a recurring saga for Alcatel-Lucent, and there has always been some debate whether they can really get as much as other companies with fewer device-related patents than others. But, it also sounds like Combes is trying to get patent monetization a little more ingrained in the corporate culture, which is definitely a good thing.
[email protected] 11/15/2013 | 5:56:44 AM
$135 million a year from patent licenses $135 million a year from patent licenses... I wonder how conservative a target that is? And what the cost of getting that revenue is? How much of the anticipated revenues will come from having to take expensive legal action against alleged infringers?

It also seems like small change compared with the rest of what needs to be done but I guess every little helps.

And this is about the third or fourth time I have heard of a patent licensing push since Alcatel and Lucent merged -- let's see if this new approach can succeed where others have failed.
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