Activist investor Icahn wants Motorola to monetize its patent portfolio

Motorola Mobility (NYSE:MMI) should explore options for monetizing its vast patent portfolio, according to billionaire activist investor Carl Icahn, adding more ferment to the speculation over wireless and technology patents.

Icahn, who owns 11.36 percent of Motorola's shares and is the company's largest single shareholder, said in a filing with the Securities and Exchange Commission that he met with Motorola this week. In the filing, he noted that Motorola's patent portfolio is "substantially larger" than Nortel Networks' portfolio, which was sold in a bankruptcy auction earlier this month to a consortium of companies for $4.5 billion.

In a series of interviews, Icahn sought to both explain his position and seemingly ratchet up pressure on Motorola to do something to monetize its patent assets. He told the Wall Street Journal that the company is actually worth $13 billion, significantly more than its $7.5 billion market value. He said that Motorola Mobility CEO Sanjay Jha and the board should not be solely focused on the company's operating businesses, handset and set-top boxes.

Icahn told the Journal that one option would be spinning off the handset and set-top box units as an operating company, and licensing the patents to it free. Alternatively, he said, Motorola could sell the patent portfolio and license back to the operating company the patents it needs.

The investor sounded similar themes in an interview with Reuters. "In any event we shouldn't let the tail wag the dog," Icahn said. "The patent portfolio may be the company's most valuable asset."

Motorola said in a statement provided to news outlets that its board and management team continuously review its "strategic direction and opportunities that it believes are in the best interests of the company and all of its shareholders."

Speculation around patents increased this week after wireless technology and licensing firm InterDigital said it may sell off some of its patents or sell the entire company. Both Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL) are reportedly interested in InterDigital. Apple was a major player in the Nortel consortium. 

For more:
- see this WSJ article (sub. req.)
- see this Reuters article
- see this Bloomberg article

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