Context: The most significant M&A transaction in the patent licensing business to date was last year’s $160 million acquisition of patent pool administrator MPEG LA by Dolby’s Via Licensing, forming Via LA (May 2, 2023 press release).
What’s new: Today, Dolby announced an agreement to acquire GE Licensing (June 6, 2024 press release by Dolby). “The transaction will include a portfolio of over 5,000 patents, including […] in standard essential video compression. GE Aerospace will retain its portfolio of IP related to its core aerospace and defense technologies, as well as the trademark portfolio for the GE brand.”
Direct impact: The deal “is expected to close by the end of fiscal year 2024, subject to regulatory approval and other customary closing conditions.” Given that standard-essential patents (SEPs) cannot compete with each other (double patenting is not allowed and implementers need a license to all patents reading on a standard), the SEP-related part of the deal does not put implementers in a worse place, though there could be room for a vertical foreclosure theory concerning the patent pool business. As far as non-SEPs are concerned, there would be an issue only if otherwise competing technologies were consolidated under the same ownership, which is unlikely here.
Wider ramifications: At this point there is no reason to believe that Dolby’s deals reflect a general trend toward consolidation in the patent licensing business.
Dolby and GE are long-standing partners in the patent licensing space. In particular, both are among the owners and licensors of the Access Advance pool administration firm.
It appears that GE was looking for a strategic exit from a patent licensing business in fields of technology that are no longer key to the company’s product divisions.