Opel and its Patents

IP finance ... where money issues meet intellectual property rights: Continued OPEL IP Confusion

This blog has already already reported on the possible separation of Opel from General Motors and the IP ramifications.

The latest news - reported in yesterday's edition of the Financial Times Deutschland - is that one of the bidders for the company has pulled out from the bidding process because it could not agree with GM on access to the patent rights. The FT Deutschland states that Chinese automobile company BAIC could not bridge their differences with GM.

This reminds me of the sale of Rover's patents a few years ago to the Chinese Shanghai Automotive Company. The later sale of the assets to another Chinese company Nanjing then unleashed a dispute in the press about who had the patent rights.

Just to add to the confusion - the trade mark ROVER was apparently sold separately to Tata motors, as reported here.

So where does this leave Opel? The German government are desparately trying to find a buyer to keep as much production in Germany as possible. However, the moral of this story seems to be that the rights to the intellectual property may be the most important assets that the company has (or rather does not have, as they are owned by GM). Ultimately any deal that happens is going to need to take into account not just the saving of jobs in an election year in Germany, but also the access to the IP to allow Opel to continue to make cars.

Continued OPEL IP Confusion

As reported previously on this blog, there was quite some confusion about whether Opel, the largest employer in the German state of Rhineland-Palatinate, owns some key patent rights – and this confusion remains.

This weekend several papers reported on the (Euro 100 million) investment plans of Magna International Inc. and the Russian Sberbank regarding General Motors’s Opel unit, with an additional Euro 400 million to be offered in the form of a no-interest loan backed by collateral.

Among all the open issues (financing, employment and pension issues, competition law aspects, etc.) it remains unclear whether Opel owns key patents or whether it has only the right to access them. This makes of course a huge difference. If General Motors continues to own the patents, Opel’s access rights could be withdrawn at any time. In addition, Opel would have to pay licence fees – and these reportedly almost reached 1 billion US$ in the past few years.

Such licence fees would constitute another crucial burden for Magna (or any other potential investor) – however the question of patent ownership proves that difficult that not even Alfred Hagebusch, the German government's trustee appointed to run Opel following GM's application for protection from its creditors, seems to have an answer to it; the memorandum of understanding signed by Magna and GM is silent on the issue of patent fees.

2005 Opel transferred all patent rights to GM subsidiary GTO - but GM reserves the rights to key technologies, such as for fuel cells or hybrid cars. Whatever the answer - GM and Opel will try their best to avoid letting their rights fall into the hands of the competition... For more background and news on this click here and here.