The company will use the enforcement of its intellectual property rights as one way of raising some much-needed cash. The company has been struggling to pay its debts as fast as possible after filing for Chapter 11 bankruptcy protection in early May.
Already the company has renegotiated some of its debt agreements into more favorable terms, and sold a couple of buildings that it had already been leasing to Google. But the company needs to do more to rid itself of the crippling debt burden, and it intends to look to the enforcement of patents as well as possible divestitures in order to do just that.
In terms of the divestitures or possible spin-offs, the company’s chairman and CEO Dennis McKenna said for example that the OpenGL application programming interface for the development of 2D and 3D graphics applications is considered non-core to SGI and that he is open to selling it. But he also told Computer Business Review that he was surprised by SGI’s reluctance to defend its numerous patents before he joined the company in January this year. As for enforcing its patents since he joined, McKenna said: I have several activities underway already. We have so much intellectual property that is being infringed upon that there could be several venture-capital-backed companies created just to enforce those patent rights.
Asked in which areas SGI has patents that are currently being infringed upon, McKenna said they include software visualization, collaborative decision-making tools, and even flat-panel display technology. Letters went out almost on the day I joined [to some of those allegedly infringing patents], he said. There is a great deal of money that is owed to us by some of these companies, and we’re going to make sure that it is paid.
As reported in a previous story, McKenna said the Chapter 11 process has been positive in the sense that it has at least added visibility into SGI’s financial woes, and how it intends to tackle them. As we have explained what we are doing and what this all means, we have gone from uncertainty to certainty, he said.
SGI filed bankruptcy-protection papers in the US Bankruptcy Court for the Southern District of New York in early May. While the company had not posted an annual profit since 1997, things had come to a head after its third-quarter results came in with a net loss of $43m.
While its Altix shared memory servers based on Intel’s Itanium chip are said to deliver stellar performance, it has failed to regain its momentum after a series of botched acquisitions in the 90s and a difficult transition to Intel from MIPS.
SGI has also faced stiffer competition from PC-based 3D engines and commodity open source clustering technologies. Yet it believes with a new CEO at its helm that its high-performance computing prowess should enable it to get its server, storage, and visualization businesses firing on all cylinders once more.
