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File photo of James Skippen, CEO of Wi-LAN Inc.

Jonathan Hayward/jonathan hayward/The Globe and Mail

Wi-LAN Inc. is reporting a drop in both revenue and profits in the third-quarter, citing the timing of licensing payments as a major reason for the decrease.

The Ottawa-based patent licensing firm says net income in the three months ended Sept. 30 was $2.2-million (U.S.) or two cents per share, down from $7.3-million or six cents per share in the same year-earlier period.

Revenue fell to $21.3-million from $27.8-million, although it exceeded the company's guidance of $19.9-million.

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Wi-LAN said the year-over-year decrease in revenue was mainly because of the timing of fixed payment amounts in agreements signed in early 2011.

Operating expenses were also higher in the most recent period, up $500,000 to $7.7-million from $7.2-million.

The company cited an increase in compensation costs as a result of increased staffing levels and amortization expense related to patent acquisitions completed during fiscal 2011.

Litigation expenses amounted to $7.1-million compared with $1.2-million for the same period last year, said Wi-LAN, which acquires and licenses patents and often has to defend those patents in court.

Wi-LAN has a portfolio of more than 3,000 issued or pending patents. It has licensed intellectual property to more than 260 companies worldwide that manufacture or sell communication and consumer electronics products.

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