Categories: Capital Markets, Chips

Qualcomm bid for BlackBerry could be tied to Certicom patents

Qualcomm bid for BlackBerry could be tied to Certicom patents

Qualcomm has emerged as a reported 11th-hour bidder for BlackBerry, which has abandoned its plan to go private in a $4.7 billion deal with Fairfax Financial. Qualcomm is reportedly considering a bid in partnership with Cerberus Capital Management and two of BlackBerry’s founders, Mike Lazaridis and Doug Fregin. The cryptography technology patented by BlackBerry subsidiary Certicom could be very valuable to Qualcomm.

Certicom provides the core technology for one of the National Security Agency’s standards for secure government communications. Recently, the company has launched an asset management system tailored to the needs of chipmakers like Qualcomm. Certicom offers chip companies secure capture and reporting of multi-point yield data, secure key injection and anti-counterfeit protection. Security is increasingly important to the companies that design mobile chipsets, especially companies like Qualcomm that outsource the chip fabrication.

Certicom says that it has more than 350 patents pending worldwide covering key aspects of elliptic curve cryptography (ECC). ECC refers to a set of algorithms generally understood to be the emerging gold standard of public key cryptography. The NSA says ECC offers greater security and more efficiency than current public key cryptology techniques, RSA and Diffie-Hellman.

BlackBerry bought Certicom and all its patents in 2009 for just $106 million, a tiny fraction of the amount Qualcomm and its partners would need to pay in order to buy BlackBerry now. But the Certicom patents are arguably worth a lot more in today’s environment than they were worth four years ago. And by adapting its security solutions to the needs of semiconductor companies, Certicom has created an asset that would be a strategic fit for Qualcomm.

BlackBerry’s device business is probably less interesting to Qualcomm, although the chipmaker does have a history in device manufacturing. In 2000 Qualcomm sold its mobile phone manufacturing business to Japan’s Kyocera for an undisclosed amount.

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