Updated: Openwave, ‘Inventors Of The Mobile Internet’, Sells Software Biz To Focus On Patents

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Mobile messaging, in its traditional sense, is on the decline, and the patent world is hot, hot, hot, and today one company that plays in both areas showed where it sees its stronger ties at the moment. Openwave, which calls itself the “inventor of the mobile internet” for the early role it played in developing mobile data technology, today announced it was selling its core software business — messaging and mediation operations — and will instead concentrate on its patent holdings in smart devices, cloud technology and unified messaging.

Marlin Equity Partners is buying the two businesses for an undisclosed sum, and says it will continue to operate and invest in the businesses, which will be called Openwave Messaging and Openwave Mobility. That transaction is expected to close this month.

Openwave, meanwhile, will rebrand as Unwired Planet, “a name that recalls the company’s rich heritage of innovation,” it said. It will focus on intellectual property — specifically in the form of 200 issued U.S. and foreign patents and 75 further patent applications, “many of which are considered foundational to mobile communications.”

For now, the company has said it intends to remain a publicly-traded company. It will give more details on what, exactly, it plans to do with that business during its fiscal 2012 results conference call — the date for that haven’t been set yet but it’s expected to be early May.

I am also due to speak with Mike Mulica, CEO of Openwave, a little bit later today — and will hopefully get some more insight then — but for now a little run-down on some of Openwave’s patent activity to-date:

  • The company signed a big licensing deal with Microsoft last year covering the whole of its patent portfolio. Undisclosed value.
  • Openwave has over time also sold some of its patents to Purple Labs, the mobile Linux specialists, which are now a part of Myriad Group (who were in the news already today, over a deal to buy Synchronica).
  • And it looks like some of those patents eventually ended up with Google and HTC. Others went to a group called Highwinds Software. This licensing deal may have been the reason behind why Android players were not included in Openwave’s lawsuit against Apple and RIM.

Although there is every possibility that Openwave will set itself up as an ongoing concern licensing its patent portfolio, according to the last set of earnings it looks like the company at this point is not yet recording any revenue from those patent holdings. (And it should be noted messaging revenues have been steadily declining.)

Reuters, meanwhile, hints at a possible sale, when it describes the transfer of the messaging/mediation business to Marlin as “part of [Openwave's] plan to sell its portfolio of about 200 patents.”

Could it really be that Openwave is setting itself up for a potential sale of those assets? There are some definite candidates as possible buyers: its licensing partner Microsoft (which just forked out $1 billion for AOL’s patents)? Or perhaps Facebook (another company sizing up the mobile opportunity and also investing in expanding its patent portfolio)? Or even that indirect Purple Labs connection, Google.

Update: some responses from Openwave’s CEO Mike Mulica on the sale and strategy shift:

No news on what will happen: Reuters apparently got the story wrong and there is no word on whether Openwave will be selling those patent. “We have not said yet what we are doing.”

Why the sale? “We came to the conclusion that in order to succeed in those areas we needed to have more focus and investment in those product lines but our company wasn’t in a great position to make those investments. We had in mind our employees and customers.” There are some 440 people working in those divisions and most — no exact number — will be transfers to Marlin as part of the sale.

Patents: He says the company has “been in the process for a little over a year studying what we have from a patent standpoint and understanding the implications.” Focusing on the patents, he says, both “services our shareholders well and stays true to the original innovation and invention profile of the company.”

Apple and RIM: We won’t talk about the actual legal process, but it’s a 15-18 month process and we’re feeling pretty good at how we’re stepping through it.” He added that the lawsuit “was the only action we could take.”

Android: No comment on whether Android is covered or whether Android OEMs, too, may see some legal action from Openwave.