IP Anatomy of the Acquisition

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Intel – Mobileye, IP Anatomy of the Acquisition

Intel’s Acquisition of Mobileye

In March 2017, Intel announced that it would be acquiring Mobileye NV, a maker of vision systems for
cars that are used in advanced driver assistance systems (ADAS) and autonomous vehicles. Mobileye is
based in Israel. The deal closed in August 2017 and its value was a little over US$ 15 billion.

Mobileye currently makes a single-camera automotive vision system that is effective and inexpensive. It
is also working on advanced automotive vision systems employing more powerful chips and multiple
cameras. It accounts for 70% to 80% of the current market for forward-looking driver assistance cameras.
It is a Tier 2 supplier, supplying to several of the Tier 1 suppliers who in turn provide systems to the various
auto majors. Mobileye’s vision system is currently used by twenty-seven of the large auto manufacturers,
with Toyota being the sole exception.

Intel has been making investments in the Internet of Things (IoT) - given that the market for personal
computers and servers chips has tapered, and the market for smartphone chips is saturating. Automotive
applications form an important and fast-growing segment of the IoT space. Intel believes that the market
for vehicle systems and data services for autonomous driving will be a US$ 70 billion market by 2030.

Intel’s Automated Driving Group (ADG), with its expertise in high-performance computing and
connectivity, has been working on creating automated driving solutions “from the cloud to the car”.
Couple this with Intel’s other investments such as its 15% stake in HERE, the provider of digital maps and
location-based services for semi- and fully autonomous vehicles and IoT applications - and we get an
indication of Intel’s long-term strategy for the automotive sector.

Intel clearly wants to position itself as a provider of end-to-end solutions for self-driving vehicles. The
Mobileye acquisition has the potential to do just that and move Intel to a leadership position in this fast-
growing space.

IP Anatomy of the Acquisition

Given the above background, we decided to take a closer look at the portfolios of both Intel and Mobileye
using the taxonomy analytics generated by Relecura. Of specific interest to us, was the fit between the
patent portfolios of the two companies, as well as understanding the value that Mobileye’s portfolio
delivered in terms of access to key technologies in the autonomous vehicle value-chain.

Carrying on from the above analysis, we applied Relecura’s taxonomy analytics to work through a couple
of typical what-if scenarios. We first tried to determine if there were other companies of a comparable
focus, size, and ambition as Intel, who might have considered an acquisition bid for Mobileye. Similarly,
from the other side of the table, we looked for other companies Intel might have targeted for acquisition,
as an alternative to Mobileye.

The results of the above exercises are outlined in this report. They demonstrate the benefit of using a
taxonomy-based approach to portfolio management. This approach delivers key insights and decision
support to companies in either the scouting or due diligence phases of the acquisition process.

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Intel – Mobileye, IP Anatomy of the Acquisition

Mobileye - Portfolio Taxonomy

We first created a taxonomy of the Mobileye portfolio. A search in Relecura gave us 410 patent documents
for Mobileye, grouped into 152 equivalents. We used Relecura’s Auto Taxonomy module to create a
hierarchical taxonomy of the Mobileye portfolio. This taxonomy is shown in Figure 1. The top-level
categories within the portfolio are image analysis, object recognition and vehicle control systems. A
considerable number of the patents in Mobileye’s portfolio address scene recognition systems for
vehicles. These visual detection systems are crucial for fully- and semi-autonomous vehicles as they
identify obstacles, road lanes/borders and traffic lights/signals during operation.

Figure 1. Mobileye’s portfolio taxonomy showing its significant patent assets in scene recognition systems for
vehicles (see boxed section).

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Intel – Mobileye, IP Anatomy of the Acquisition

Mobileye - Patent Portfolio Fit and Accrued Value

We compared the portfolios of Mobileye and Intel to study how well the two portfolios complemented
each other. An equally important objective was to determine the value that acquiring the Mobileye
portfolio brought to Intel’s existing patent holdings. We started by mapping the portfolios of both
Mobileye and Intel to the taxonomy shown in Figure 1. We then generated the taxonomy analytics
displayed in Table 1. These analytics used the various sub-categories in the portfolio taxonomy of the
acquired company (in this case, Mobileye) as a basis for comparison. In parallel, we mapped just the “high
star rating” patents in each portfolio to the same taxonomy. For this analysis, we set the “high rating”
threshold at a Relecura Star Rating of 2.5 and above. This comparison of the high rated patents is shown
alongside in Table 1.
Table 1. Comparison of the patent equivalents held by Mobileye and Intel in specific technology sub-categories
marked .

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Intel – Mobileye, IP Anatomy of the Acquisition

The comparison in Table 1 shows us that Mobileye has a stronger patent position in certain areas related
image analysis, scene recognition, and vehicle position control using cameras. In contrast, Intel’s patent
holdings address the sub-categories of image analysis for surveillance, proximity recognition, and motion
analysis techniques using segmentation and gradient methods.

From the results of the more focused comparison considering only the high rated patents in each
portfolio, it becomes apparent that most of the value Intel gains from the Mobileye acquisition accrues
from the high rated patents Mobileye holds in scene recognition for vehicles - involving the image analysis
and recognition of traffic signs, vehicle lights, and human and other obstacles.

Mobileye as an Acquisition Target – Other Possible Acquirers

We next analyzed the first of our what-if scenarios to determine which other companies might have
considered an acquisition bid for Mobileye. We started by selecting a small list of semiconductor
companies of a comparable size to Intel who have shown interest in participating in the automotive sector,
based on their on-going business initiatives, acquisitions and partnership history. The companies selected
were Samsung, Qualcomm, Nvidia, and Toshiba.

We mapped each of their portfolios to the taxonomy. We added the portfolios of Intel and the combined
portfolios of (Intel + Mobileye) to round out the comparison. The taxonomy analytics for this comparison
is laid out in Table 2.

Of the selected companies, Samsung, Qualcomm and Toshiba have a fair number of patent assets in most
of the technologies covered by the Mobileye portfolio. This makes them less likely to target Mobileye as
a potential acquisition – at least from an IP-fit perspective. Nvidia, on the other hand, might have greatly
benefited from acquiring a company such as Mobileye since its patent coverage of technologies related
to computer vision for vehicles is very sparse. Given Nvidia’s success in developing chipsets and platforms
to handle the various data processing tasks for autonomous vehicles, acquiring a portfolio such as
Mobileye’s might have enhanced its ability to deliver complete solutions for driver assistance systems and
autonomous vehicles.

It is also clear from Table 2 that the combined portfolio of (Intel + Mobileye) positions Intel as a leader in
technologies relevant to computer vision for vehicles. The patents from Mobileye related to scene
recognition for vehicles (see boxed section in Table 2) is one of the key reasons for this. These patents fill
an existing gap in Intel’s portfolio. They leapfrog Intel over the other companies compared in the table,
by giving it a strong patent position across the various technology categories covering vehicle vision
systems.

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Intel – Mobileye, IP Anatomy of the Acquisition

Table 2. Comparison of patent equivalents held by various semiconductor companies in specific technology sub-
categories marked .

Intel’s Possible Options – Other Similar Acquisition Targets

We finally looked at the flipside of the previous case. We tried to determine if there were other companies
that might have presented a viable alternative to Mobileye, as an acquisition target for Intel. Using the
combination of technologies covered by the Mobileye portfolio, we shortlisted a few companies whose
portfolios have a similar coverage. Not surprisingly, we came up with the names of various OEMs and
suppliers in the automotive sector. These were Delphi, Gentex, Autoliv, Connaught Electronics, and
Continental.

We mapped their portfolios to the taxonomy to compare their patent coverage to that of Mobileye. The
results of this comparison are shown in Table 3. All the companies listed above, apart from Gentex, have
good patent coverage in obstacle detection. Gentex, on the other hand, has a significant set of patents
covering vehicle and traffic light detection, as compared to the other suppliers. However, Mobileye is the
only company with patent coverage in areas such as defining a trajectory using a learning process and
image registration and motion analysis using stereo image pairs. Apart from Mobileye, Delphi is the only
other company with patent coverage in autonomous decision making for vehicles.

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Intel – Mobileye, IP Anatomy of the Acquisition

While there is no company with a portfolio that has the entire range of technologies covered by Mobileye,
the ones that come closest to it in this regard, to suggest themselves as alternative acquisition targets are
Delphi and Continental. Both Delphi and Continental have patents covering object recognition but are
missing coverage in the sub-categories of image analysis. On the plus side, Delphi has coverage in vehicle
control systems that is comparable to Mobileye.

The analytics in Table 3 indicate that overall, Mobileye was probably the best option for Intel as a company
to acquire since it offered the entire range of vehicle vision technologies.
Table 3. Comparison of patent equivalents held by various auto OEMs in comparison to Mobileye for specific
technology sub-categories marked .

Key Takeaways
In this report we have attempted to decode Intel’s rationale for acquiring Mobileye from a patent
perspective, using taxonomies and analytics generated in Relecura. Taxonomies enable us to easily do a
comprehensive teardown and side-by-side comparison of portfolios, to determine pockets of value in
portfolios. We were thus able to pin-point the value Mobileye’s patents bring to Intel’s existing portfolio,
as well as show that the two portfolios exhibited a good fit and complemented each other very well.

The what-if scenarios that we subsequently analyzed serve as examples of what is possible. Specifically,
they demonstrate the benefit of using a similar approach in the due diligence phase of an acquisition, or
even earlier when companies are scouting for potential targets based on the value they can bring in from
their patents and other IP. Doing such an analysis can benefit both large companies that are looking to
acquire smaller ones for strategic reasons, as well as smaller companies looking to be acquired.

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Intel – Mobileye, IP Anatomy of the Acquisition

References
Intel Completes Tender Offer for Mobileye
Why Intel is buying car-vision company Mobileye for $15.3B
What Does Intel's Acquisition Of Mobileye Tell Us About Its Driverless Car Strategy?

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About Relecura
Relecura is a full-stack cognitive cloud platform that provides custom intelligence and reports on patent
portfolios, technologies and companies. It does this by capturing and organizing the knowledge from
various document repositories (patents, scientific literature) and subject matter experts in a flexible and
collaborative manner, into a knowledge-base.

Relecura offers IP analytics tools and a custom enterprise platform to corporations, law firms, IP services
firms, R&D organizations and academic institutions. The enterprise platform integrates the discovery and
analysis of public documents with internal company documents. Relecura also has an API to help create
custom tools for IP and business intelligence. For more details visit www.relecura.com.

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