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Is Nokia Corporation (ADR) (NOK) Being Smart in Selling Intellectual Property?

Nokia Corporation (ADR) (NYSE:NOK), in an attempt to stay competitive (and solvent) in the tech world, has been shedding jobs, selling off some of its units and downsizing its vibrant research and development arm – the part of the company that has delivered he most robust patent portfolio in the wireless digital industry.

Nokia Corporation (ADR) (NOK), Microsoft Corporation (MSFT)That poartolio is getting a little bit thinner. Nokia Corporation (ADR) (NYSE:NOK) announced Thursday that it has agreed to sell 125 intellectual property patents to Pendrell Corporation, a firm that specializes in intellectual property investment and advice. As part of the deal, Pendrell will create a subsidiary called Helsinki Memory Technologies which will manage the patents and the subsidiary will pass a license to Nokia for each patent, which Nokia can then turn around and sell those licenses.

It is believed that the patents sold revolve around SD cards, flash storage, embedded flash and other memory tech. It is believed that nearly two-thirds of the patents (81 of them) are considered standards-essential patents by the company. Nokia-patented technology is currently being used by 400 worldwide brands in more than 8,000 devices.

Zacks Equity Research wrote in its analysis, “We believe that selling these technological assets will provide a win-win situation for Nokia, as it will profit from Prendell’s expertise in IP strategy and licensing and at the same time reap benefit from its huge investment made in research and development.” These technologies may combine to form a market of about $12 billion by the end of the year, it is estimated.

Nokia Corporation (ADR) (NYSE:NOK)What do you think of this development? Is this a sign of Nokia Corporation (ADR) (NYSE:NOK) turning the corner, or is this just another step from just getting off the bottom? Do you see this being a successful move for the company long-term? Let us know your thoughts in the comments section below.

DISCLOSURE: I own no positions in any stock mentioned.

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