When Jim Skippen became chief executive officer at Wi-LAN Inc. nearly a year ago, he had little time to settle into the corner office at the tiny, struggling tech company. Within a week, he was on a plane to Helsinki to seek an audience with the world's largest cellphone maker, Nokia Corp.
His mission wasn't to sell them truckloads of gadgets. Instead, he was there to persuade Nokia brass it was in their best interest to take out a licence to use Ottawa-based Wi-LAN's portfolio of wireless technology patents, which broadly apply to products including laptops and cellphones.
Mr. Skippen, a technology lawyer by training, said he was determined to get a licensing deal quickly, preferably with a big name like Nokia. "I was hopeful we could have some early successes just because that would help us in so many other ways. It would help us raise money, it would help us attract people, it would help us get profile," he said.
Within five months Mr. Skippen had signed a $49.2-million licensing deal with Nokia, impressing both investors and industry watchers. It also cemented Wi-LAN's transformation from a developer of wireless technology into a company solely focused on licensing its patents to other companies.
Mr. Skippen, who cut his teeth at two of the country's largest law firms, had his "ah-ha" moment regarding the business potential of patent licensing for small companies about seven years ago.
He was working at another Ottawa company, Mosaid Technologies Inc., when he realized it could make substantially more money from licensing its memory-chip technology than actually making and selling products. The company eventually made the shift, but in the meantime, Mr. Skippen had taken on the challenge of turning around Wi-LAN.
"A year ago, this company was very close to insolvency. It was suffering. I remember telling my wife it was quite possible in six months I could be presiding over a bankruptcy."
But Mr. Skippen was attracted by the decision Wi-LAN's board of directors and management had already made to transform the company into a "pure play" patent licensing business. The concept was based on the law as it applies to inventions. Inventors are given a monopoly for 20 years after filing for a patent if they create something unique and significant. When the 20 years is up, the invention may be used by everyone.
While large companies such as Texas Instruments Inc. and International Business Machines Corp. have been enforcing patents on their technology for years, the idea of a little company focusing exclusively on patent licensing was a "gutsy" undertaking, Mr. Skippen said. In a business that is prone to dramatic legal battles, a small company that expects to enforce patents has to be able to manage complex litigation, and make large companies take it seriously, Mr. Skippen said.
"Thirty or 40 years ago small inventors couldn't get any money for their patents, because to prosecute a patent lawsuit could cost $10-million and could take years and years. Big companies could use your invention and basically say, "Why should we pay you?" Mr. Skippen said.
Wi-LAN showed its muscle with the Nokia deal, and is "very focused" on pursuing other licence negotiations for its patents. It believes more than 160 companies are infringing on its patents, and has notified 125 of them that it believes they need to take out licences. Such talks are taking place around the world including Japan and elsewhere in Asia, where a Wi-LAN team is headed tomorrow.
Well aware of the limited shelf life of its existing patents, Wi-LAN has also bulked up its senior management team and is busy looking for new ones to buy. Last month, Wi-LAN hired four new senior managers including Andrew Parolin, vice-president of business development and a front-line screener for the many opportunities being pitched to the company by patent brokers, investment bankers and inventors, along with those ferreted out by its own staff.
Mr. Parolin might then take an idea to chief technology officer Jung Yee, who can analyze the science behind the patent, or to the market research team to figure out what it might be worth. "Buying patents is much more difficult than it looks, because it's very hard to know everything about it, there's a lot of digging to do," Mr. Skippen said.
Recent acquisitions include publicly traded Tri-Vision International Ltd., which owns the rights to the V-chip, a product that enables parents to block programming and is required in TVs and DVD players in the United States.
Wi-LAN will also indirectly acquire patents from other companies and inventors. For example, it will take patents as compensation for licensing its technology, or provide financing to inventors and take the patent rights as repayment.
In the future, Wi-LAN could also help other companies manage their own licensing programs. Before joining the company, Mr. Skippen did just that as a consultant for Certicom Corp. This week, Certicom made news when it filed suit against Sony Corp. over the alleged use of its technology in Sony products including DVD players and PlayStation 3 game systems.
Some observers have dismissed companies such as Wi-LAN as "patent trolls" that make their living from lawsuits instead of their own discoveries, but Mr. Skippen said his business encourages small inventors. "If you were a big guy 30 years ago you were pretty much invulnerable. Now all of a sudden you've got guys like us saying 'Look, you owe us a fair amount for these patents,' and what can you do? Well, one thing you can do is call us patent trolls and complain about it. But what we're asking for is not egregious, it's fair value."
Jim Skippen
Age: 45
Personal life: Lives in Ottawa with his wife of 16 years, Pam, a teacher and full-time mom. They have two children: Mitchell, 13 and Megan, 12.
Hobbies: Mr. Skippen has one of the biggest private guitar collections around, and likes to jam to rock music with his son. One of the jewels of his collection is a Gibson Les Paul that is signed by Les Paul, the renowned jazz musician and inventor of the solid-body electric guitar.
Personal projects: Mr. Skippen and his wife recently renovated their home in Ottawa's Glebe neighbourhood, and the house was chosen as the filming location for the Movie Network's recently aired feature Like Mother, Like Daughter.