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Curious case of Blackberry 38,000 patents! Part I

When we hear the word Blackberry we immediately think of the BB famous keyboard phones. That blackberry is DEAD!!! The new blackberry since 2013 is a pure software company leading the cybersecurity, iot, and connected cars (EV + ICE) revolution. Many at this point are probably raising eyebrows in disbelief, that's exactly the type of reaction I get from about 8 out of 10 people. This is fault of the company for not being aggressive on consumer front in advertising but I can also see why they shied away from it. BB is a B2B company and so they have been aggressively partnering with 100s of companies to embed their SW into semiconductor, ADAS, and other iot chips/devices(cars, drones, etc 265 design wins in last 2 years).

The new BB has 38,000 patents (here), leader in Zero Trust Cybersecurity (here), and leader in embedded iot software (here).

The 38,000 patents (gold of today)
Now lets get back to the correct number of patents. There has been lot of speculation and confusion in the media about number of patents owned by Blackberry. Many at one point thought it was only 18,000 patents, then only 30,000 patents, but the TRUE number is staggering 38,000 patents. I have put together some sources on where i got the number from below. First the CEO confirming in Q4 FY21 earning (here) to an analyst asking for the correct number. And then just in 2020(during covid shutdown) they managed to get 2,000 more patents. Like this article (here) suggest the number is closer to 40,000 patents as of TODAY.

Trip Chowdhry, Global Equities Research: Second question I had was regarding the intellectual property portfolio you have. The last time I counted it was more than 30,000 patents.

John Chen: 38,000 to be exact.

Next few weeks are critical as they plan on selling off the patent portfolio(20k patents) related to messaging, devices, wireless, etc since they no longer make hardware phones. JC the ceo said by end of November or before the ER on Dec 21st the company will either announce the patent deal or walk away. He has been negotiating the deal since last Christmas and now he's tired of pushing it out. If the deal goes through it will be minimum 1 Billion added to BB cash pile of $800m This will be huge for the SP as all the revenue from patent licensing is pulled up front for investment in growth.

Paul Treiber, RBC Capital Markets Oh, hi, John. The first question on the patent sale, I know you can’t say much just given you’re in the middle of negotiations, but your statement you mentioned that the negotiations are going well but then you also indicated that if it doesn’t close you have other options. Just could you bridge between those two statements because they’re are actually quite far apart from a tone perspective?

John Chen That’s good, that’s a good one, I’m glad you caught it. Yes, it is going well, I fully expect to finish this, this quarter, but I’m tired of waiting. I know a lot of our investors are too. I’m not blaming anything on anybody, and maybe we have too many lawyers assigned to this. Sorry lawyers, but the key is it’s a complex and big portfolio. It’s rightfully so that they have done a lot of due diligence, and those things are now completed by the way. All the due diligence has been completed. And then, we have a lot of time spent on definitive agreement negotiations. By and large, with the exception of one or two items, we’re done with that. And then, we have the purchase agreement. And so for me, it’s been since last Christmas. It’s coming up to next Christmas, so I basically draw the line in the sand and say, I can’t just stop Licensing. The business needs to either move in one direction or the other. And then, there are other interested parties who are calling. We are not entertaining them, because as you recall, during a period of time not long ago in the past, we were in an exclusive discussion with these people. So, I can’t really entertain a third party. So, my only point is, if you want to put a weighing percentage, I put 80:20, I put 80% we get it done this quarter. Does that help?

Also confirmed by Steve Rai (BB CFO) in this interview(here) that JC plans on announcing by ER one way or the other.

I'm long and strong blackberry!! I believe this is mispriced and suppressed company worth minimum 10x value today. This is not an investment advice, Please do your own DD before investing and please visit BB investor relations for more info.

Stay ZEN my friends!!

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