The Internet of Things (IoT) may be the most significant technological concept to promise dramatic change in how we work and live, and it’s having a huge impact on the patent licensing industry.
As projected by a McKinsey & Company study, by 2025, the IoT’s potential economic impact could reach as much as $11.1 trillion – or 11 percent of the world economy. That suggests a lot of IoT-related patent activity, and accordingly, the number of patents within the IoT industry has been growing exponentially. According to IP Capital Group, the number of patents related to the IoT more than tripled between 2014-2016.
As the number of patent technologies grows, licensing out these patents to others who want to use patented technology – what’s called patent monetization – has become an industry in itself. One of the leaders in the patent licensing field is Canada’s WiLAN, a company that has 9,000 patents spread across 60 portfolios and has made it their business to both invest in and license out patents, while also helping others monetize their patented technologies.
Over the years, WiLAN has operated under the driving principle that where there is innovation, there will be patents and technologies to invest in. It’s no surprise, then, that in April this year, the company announced a bold new diversification strategy that will see WiLAN rebrand itself to Quarterhill Inc. and aggressively invest in the burgeoning Industrial Internet of Things (IIoT).
Understanding the significant growth potential within the IoT, and specifically within the IIoT, WiLAN’s rebranding to Quarterhill comes with a new focus on acquiring technology companies in the IIoT that have strong management teams, solid financial performance and the potential to drive innovation within the industry, both today and over the long-term. The acquired companies will become wholly-owned subsidiaries of Quarterhill. The patent licensing business will retain the WiLAN name.
For a company that has been active in the patent field for years, the IIoT represents a natural fit for growth and a move that will play into WiLAN’s expertise in patented technologies.
That’s something WiLAN’s Executive Chairman, James Skippen noted, saying “The knowledge and experience we have gained as a leader in the patent licensing industry are directly applicable to identifying promising technology businesses with a focus on the IoT segment.”
Skippen’s quote also clarifies an important point when it comes to WiLAN’s diversification strategy – in rebranding to Quarterhill and tapping at an early-stage into the growth offered by the IIoT, the company will not be leaving the patent monetization industry. WiLAN will remain just as active in proactively defending patent licenses and intelligently investing in patent portfolios that promise financial returns.
And WiLAN is not timidly moving into the IIoT space.
The same day the company announced its diversification strategy, WiLAN announced the acquisition of its first IIoT company, namely Saskatoon-based International Road Dynamics (IRD), whose intelligent transportation system technologies are sold around the world and which WiLAN acquired for C$63.5 million.
IRD develops intelligent tools that collect traffic data, monitor vehicle emissions and manage highway toll and weigh stations. Founded in 1980, the company’s fiscal 2016 revenues reached an impressive C$65.4 million. In addition to a successful business model, IRD’s portfolio of over 80 pending and current patents made it a particularly attractive proposition for WiLAN.
On May 4, less than a month after announcing the acquisition of IRD, WiLAN announced that it had acquired a second IIoT player, VIZIYA Corporation. VIZIYA is a company that creates a range of IoT based asset management tools that help many of its Fortune 1000 customers optimize their asset performance. Both acquired companies generate a good portion of their revenue from recurring sources and both show great growth potential in their respective areas of the expanding IIoT market.