by Anton Shilov
08/10/2009 | 01:22 PM
Novafora, the company primarily known for its acquisition of Transmeta, has ceased operations this month. As a result, the intellectual property of Transmeta is likely to be available for sale again and the buyer may rather easily design its own low-power microprocessor.
Novafora was formed in 2004 with the aim to develop video processing chips. However, in five years of its existence the company did not launch a single commercial product. Novafora acquired Transmeta for $255.6 million in cash in late 2008 and on the day the transaction was formally closed, Novafora sold part of Transmeta’s patent portfolio to Intellectual Ventures, an intellectual property licensing firm, for an undisclosed sum. The portfolio contains 140 patents as well as and a substantial number of pending patent applications.
Last week Novafora ceased to exist itself, according to several reports on the Internet (1, 2). Earlier it was accused of buying Transmeta at too low price.
The reasons why Novafora, which was controlled by two venture capital firms, decided to take over Transmeta were not completely clear from the start. Novafora was founded in 2004 and none of its products have been released commercially, hence, the timeline to acquire another company might not be the best to say at least. Novafora claims that it wanted to acquire Transmeta in order to get power-saving technologies as well as employees, though, such reasons did not seem to be truly crucial: the company could license the technologies and hire employees without making such a huge investment.
According to media reports, investors decided not to continue funding Novafora. However, even this reason does not seem to be completely correct: Transmeta licensed its intellectual property to other chip designers and Novafora could do the same to make ends meet. However, since Novafora sold certain patents to Intellectual Ventures, its patent portfolio’s value got much lower.
The portfolio Intellectual Ventures got contains relatively young patents; many were issued in the last few years. Transmeta licensed these patents to several of the largest microprocessor companies to generate revenue of approximately $300 million. The company was a pioneer in low-power microprocessor technology, “code morphing” techniques, and very long instruction word design architecture. With the acquisition of the IP, Intellectual Ventures got a patent portfolio to create a new central processing unit. Potentially, a company that will acquire Novafora may also obtain that valuable intellectual property.