Video ringtone provider Vringo plans to merge with intellectual property firm Innovate/Protect as part of a strategy to cash in on the lucrative patent market.
The combined companies will "be positioned to enhance its opportunities for revenue generation through the monetization" of their joint patent holdings, Vringo said in its announcement today.
Vringo has taken a beating on the stock market since it went public in 2010.
The tie-up with Innovate/Protect will move it away from its struggling software business and likely into the courtroom - Innovate/Protect is currently suing Google, AOL, IAC Search & Media, Gannett and Target for infringing its search engine patents, which it acquired from 1990's search engine heavyweight Lycos. The case is scheduled to go to trial on Oct. 16, 2012.
"We believe that the combination of Innovate/Protect's litigation expertise and patent portfolio combined with our licensing experience and mobile-related patent portfolio will allow the enhanced Vringo to fully realize the potential of our joint intellectual property," Vringo CEO Andrew Perlman said in a statement.
Perlman was just promoted to the chief executive post from his position as Vringo's president, replacing Jonathan Medved, who resigned.
Vringo is bolstering its executive ranks with Innovate/Protect CEO and Chief Technology Officer Andrew Lang, who will serve as president and chief technology officer of the combined company.
Vringo also hired former Nokia senior litigation counsel David Cohen to lead its legal efforts.
Innovate/Protect COO Alexander Berger will shift his post to Vringo, and the company's current CFO Ellen Cohl will keep her present position.
The transaction is subject to approval by Vringo's shareholders and customary closing conditions and is expected to wrap up during the second quarter.
Upon completion, the shareholders of Innovate/Protect will own about 55 percent of the combined company’s common stock, and Vringo's current shareholders will own about 25 percent.