BlackBerry Changes Patent Strategy, Enters Outsourcing Deal With Teletry

BlackBerry has entered into a strategic patent licensing deal with Teletry. As per the agreement, Teletry can sub-license a host of BlackBerry patents to global smartphone manufacturers. The financial terms of the deal have not been disclosed yet.

Teletry deal to help BlackBerry focus on core business

BlackBerry said it chose Kasim Alfalahi and his team at Teletry because of their expertise and track record in licensing important portfolios through long-term relationships. Teletry is part of the Marconi Group. Alfalahi, former head of patent licensing at Ericsson, is part of Marconi’s leadership team.

“We are pleased to be working with one of the pioneers of the modern smartphone who created one of the most valuable patent portfolios in the industry,” Alfalahi said in a press release. “The new licensing program will let Teletry to work with the global smartphone manufacturers and license the innovative technology, the executive said.

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BlackBerry stated that it retains ownership of about 40,000 patents related to operating systems, automotive subsystems, networking infrastructure, cyber-security and wireless communication. The Canadian firm said it will carry out its own licensing program that will not clash with the Teletry’ deal.

Todd Coupland, an analyst at CIBC World Markets told Reuters about the deal, “They’re basically saying ‘I don’t want to build this internal team up at BlackBerry, I want to outsource it.”

Teletry’s deal will allow the Canadian firm to focus on its core business, which is not patent licensing, the analyst added. Coupland noted that the company should focus on winning deals for its QNX operating system in the automotive industry, a key driver of its growth.

Patent licensing still an important segment for BlackBerry

Just last month, BlackBerry entered into a licensing deal with BLU, a phone supplier that caters to the budget market in North America. BLU is the same company that BlackBerry sued last year. However, things have changed for the better as the company is looking to monetize its patent portfolio and use the cash in its software business.

Last month, BlackBerry CEO John Chen stated that over 80 people are still working on patent deals at the company even after they saw several senior members leave recently. One noteworthy name to leave the company is Mark Kokes, who switched from BlackBerry to the health technology company NantWorks LLC, Reuters said, citing unnamed sources.

BlackBerry reported better-than-expected numbers for the most recently completed quarter, driven by a record performance from its software business. Although revenue dropped to $249 million from $352 million in the year-ago quarter, it jumped from $244 million in the previous quarter. The software and services segment recorded revenue of $196 million in the quarter, beating the consensus estimate of $175 million.

With its growing software segment, BlackBerry no longer needs to worry about being a laggard in the smartphone market. It has exited the hardware part of it. Now it looks to its hardware partners to distribute, market and sell BlackBerry-branded Android phones.

On Wednesday, BlackBerry shares closed down 0.67% at $10.33. Year to date, the stock is up almost 50%, while in the last month, it is down almost 11%.