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So it turns out those rumours in 2007 that Mosaid Technologies Inc. and Wi-LAN Inc. getting together to form a patent licensing power weren't so goofy after all.

The two companies, now embroiled in a hostile takeover battle, have talked about a deal twice in the past four years, with both sides playing the role of instigator.

In 2007, it was Mosaid looking to do the deal, approaching WiLAN about a "strategic merger," Wi-LAN said this week in a regulatory filing on its hostile takeover bid for Mosaid.

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At the time, rumours leaked into the market that a deal might be happening, but were met with some skepticism. But the filing reveals the talks were serious.

"Discussions, meetings and the exchange of draft documents regarding a possible transaction with Mosaid continued over the course of early 2007, and a number of terms to such a transaction were proposed by both parties," Wi-LAN said.

In 2009, Wi-LAN was the aggressor.

In February and March of that year, executives from Wi-LAN reached out to Mosaid to try to rekindle talks. Wi-LAN even laid out an offer that would have valued Mosaid at a 27 per cent premium to its recent trading price. (That would have valued the company in the $12.50 range, roughly).

The talks floundered because Mosaid wanted a standstill agreement, and Wi-LAN wouldn't agree, presumably because it was already thinking about a hostile bid if a friendly one couldn't get done.

At the end of 2010, Wi-LAN started buying up shares of Mosaid in the open market, giving it a toehold in the event it made a hostile play. That's something that wouldn't have been possible with a standstill agreement in place.

WiLAN chief executive officer Jim Skippen made one last play for a friendly deal. He had his bankers from Canaccord Genuity Corp. approach Mosaid's CEO, John Lindgren, twice at a conference in Boston. "On each such occasion, Mr. Lindgren declined to meet with Mr. Skippen," Wi-LAN said.

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Mosaid looks pretty good for holding out, given that the current bid is for $37, close to triple the price talk in 2007.

Shareholders, and Mosaid's board, are looking for even more. Mosaid has hired GMP Securities and Barclays Capital to find a better alternative.

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