LG Electronics Accelerates Patent Monetization: Sells 46 US Standard Patents to vivo, Expanding its Presence in the Chinese Market

LG Electronics Accelerates Patent Monetization: Sells 46 US Standard Patents to vivo, Expanding its Presence in the Chinese MarketIT Home, November 27 According to TheElec, information from the United States Patent and Trademark Office (USPTO) shows that LG Electronics sold 46 US standard patents to vivo early last month. These patents primarily relate to standard codec technology required for video signal compression

LG Electronics Accelerates Patent Monetization: Sells 46 US Standard Patents to vivo, Expanding its Presence in the Chinese Market

IT Home, November 27 According to TheElec, information from the United States Patent and Trademark Office (USPTO) shows that LG Electronics sold 46 US standard patents to vivo early last month. These patents primarily relate to standard codec technology required for video signal compression. Codecs are core technologies for compressing and decompressing digital video and audio; their efficiency directly impacts video and audio quality and transmission speed. This transaction represents another significant step in LG Electronics' ongoing patent monetization strategy and highlights the growing influence of Chinese mobile phone manufacturers in the global market.

This is not the first time LG Electronics has sold patents. Reports indicate that between November 2023 and April 2024, LG Electronics sold 55 US standard patents to OPPO; in January 2024, it sold another 14 US standard patents to TCLKing, a subsidiary of TCL Corporation. In addition to US patents, LG Electronics also transferred 31 related Korean patents to OPPO and TCL respectively. These transactions demonstrate LG Electronics' proactive approach to converting its patent technology into tangible economic benefits, choosing to license some patents to prominent Chinese mobile phone manufacturers.

The 46 US standard patents sold to vivo primarily focus on video signal compression, crucial for enhancing the mobile user experience. High-performance codecs directly impact video clarity, smoothness, and file size. In the age of mobile internet, the widespread adoption of high-definition video has led to a continuously increasing demand for efficient codec technology, giving LG Electronics, with its relevant patents, a significant competitive advantage. By selling these patents, LG Electronics not only generated direct economic returns but also helped vivo and other Chinese manufacturers enhance their product competitiveness, creating a win-win situation.

LG Electronics' patent monetization strategy did not begin recently. In April 2021, LG Electronics officially exited the mobile phone business, marking the end of its competitive journey in that sector. However, the substantial patent resources accumulated during its mobile phone operations have been revitalized. LG Electronics reportedly holds approximately 24,000 standard patents covering key communication technologies such as 4G, 5G, and Wi-Fi. These patent assets represent years of investment and accumulation in R&D, now gradually generating ongoing revenue through licensing or sales.

Besides patent sales, LG Electronics actively explores patent licensing business models. In the first quarter of 2022, LG Electronics signed patent licensing agreements with Apple and another company, generating licensing fees of 890 billion KRW (approximately 4.621 billion RMB). This substantial income demonstrated the value of LG Electronics' patent technology and provided strong support for its future patent monetization strategy. However, since then, LG Electronics seems to have failed to reach similar-scale agreements, which may have prompted it to increase patent sales to achieve more stable revenue growth.

The sale of 46 US standard patents to vivo further confirms the continued advancement of LG Electronics' patent monetization strategy. Amidst increasing global economic downward pressure, converting patent assets into cash flow alleviates financial pressure and provides funding for future development. Simultaneously, LG Electronics' choice to license patents to Chinese mobile phone manufacturers reflects its emphasis on and confidence in the Chinese market. As one of the world's largest mobile phone markets, China holds immense potential market demand and development opportunities. Collaboration with Chinese manufacturers allows LG Electronics to further expand its global market share and enhance its brand influence.

LG Electronics' patent monetization strategy is not only a crucial component of its own business transformation but also has a profound impact on the overall patent technology market. With the rapid advancement of mobile communication technologies, possessing core patent technologies is crucial for enhancing a company's competitiveness. LG Electronics' case provides a reference for other technology companies and encourages them to place greater emphasis on technological R&D and intellectual property protection. In the future, with the continuous development of emerging technologies such as 5G and artificial intelligence, patent technology will play an increasingly important role, and companies with more high-quality patents will hold a more advantageous position in market competition.

In conclusion, LG Electronics' sale of 46 US standard patents to vivo is a crucial step in its ongoing patent monetization strategy and its active development of the Chinese market. This transaction not only brought significant economic benefits to LG Electronics but also strengthened its cooperation with Chinese mobile phone manufacturers and, to a certain extent, promoted the healthy development of the entire patent technology market. LG Electronics' future patent monetization strategy warrants continued industry attention. The balance it strikes between patent licensing and sales, and its adjustments to different market strategies, will influence its future financial performance and market position.