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stories filed under: "satellites"
Legal Issues

Legal Issues

by Mike Masnick


Filed Under:
bad patents, lunar flyby, patents, physics, satellites

Companies:
boeing, ses americom



Satellite Abandoned Thanks To Patent On Lunar Flybys

from the promoting-the-progress dept

A ton of folks are all submitting different versions of this story this morning (from a variety of sources), but the original appears to be at Space Daily, where it discusses how satellite company SES Americom has to abandon a satellite that had a botched launch due to a ridiculous patent on the concept of a lunar flyby. Basically, what happened is that SES had a problem with a satellite launch, such that the satellite did not reach the proper orbit (it was intended to be a geostationary satellite used by Echostar). SES then figured out that it could get the satellite into a proper orbit by making use of a lunar flyby. That part is just basic physics. But, at that point, SES discovered that Boeing happens to own a patent on doing this sort of lunar flyby, despite the fact that you can't patent physics. As someone notes in the article, Boeing merely used some jargon to make basic physics appear as a "process." If that sounds familiar, you'll note that it's the same thing that many patent holders are doing to turn math into patents using software patents.

So, rather than just doing it and having to deal with patent infringement lawsuit, SES tried to play by the rules (no matter how ridiculous) and asked Boeing to license the patent. Unfortunately, the two companies are engaged in a separate legal matter that has SES suing Boeing for $50 million. Boeing took the opportunity to tell SES it would license the patent only if SES dropped the lawsuit. Apparently, SES figured that the $50 million was worth more than saving the satellite, and will instead try to collect the insurance for the botched launch, abandoning the satellite. This may get more interesting, as apparently a third party is interested in buying the satellite and potentially taking on Boeing (or maybe just licensing the very questionable patent). Also, the insurance company apparently was not aware of these alternatives and may push SES to take one of them. Either way, thanks to a patent on physics (which, last I checked, is not something "made by man") SES has felt the need to abandon a perfectly viable satellite. I'm sure that was exactly how the Founding Fathers expected the patent system to be used. Update: The patent in question is available here.

114 Comments | Leave a Comment..

 
Earnings, IPOs, and the like

Earnings, IPOs, and the like

by Mike Masnick


Filed Under:
ipo, iridium, satellites, second chance

Companies:
iridium



Iridium May Go Public Again

from the buying-stuff-up-for-pennies-on-the-dollar-is-good-business dept

It's really quite fascinating to watch infrastructure bubbles, where investors overspend on infrastructure, only to go bankrupt, and have that infrastructure picked up for pennies on the dollar out of bankruptcy and turned into a useful, profitable asset. We've seen it with all the dark fiber investment in the '90s, and perhaps we're now seeing it with satellite communications as well. Remember Iridium? The huge satellite phone operation spun out of Motorola that was valued at many billions of dollars? It was supposed to replace cellular phones with satellite phones that could work anywhere in the world. Of course, there were a few problems with that plan. First, it was insanely expensive to build out and launch the necessary satellites. Then, the satellite phones themselves were huge, ugly and bulky. Third, it cost a ridiculous amount to actually use the phones. Lastly, and probably most importantly, between the time it took for Motorola to come up with this plan and to actually have something to offer the market, cell towers were spread quite widely around the globe and cellular technology had improved greatly -- basically lessening the need (drastically) for Iridium in the first place.

That caused Iridium to go bankrupt, and for a while the entire project was almost abandoned completely with plans in place to destroy the satellites. At the very last minute, though, a group of investors picked up the entire thing for $25 million (yes, the entire system, which had cost the original company $3.4 billion to build). Not only that, but part of the $25 million buyout was a $72 million contract with the US government. The new Iridium was a lot more focused. Rather than going after the entire mobile phone market, it really narrowly focused on occupations where such phones would be necessary. However, even then, we've still been skeptical that the economics could work out. After all, it's still costly to manage those satellites (which have a limited lifespan and need to be replaced) and reports indicated that the new Iridium really had very few customers.

However, the company now claims it's in pretty good shape, with good revenue and EBITDA, and is even talking about trying to go public once again. I'm sure the roadshow pitch will be quite different than the original Iridium. And, considering the name is still synonymous with one of the biggest failures in business, it will be interesting to see how investors react. Still, it's yet another example of companies buying up expensive assets for pennies on the dollar after an investment bubble, and turning those assets into something useful. Sometimes it's good to be a scavenger, apparently.

10 Comments | Leave a Comment..

 
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