Intel has signed an agreement with RealNetworks to buy a significant number of its patents and its next generation video codec software. RealNetworks is the creator of innovative applications and services that make it easy for people to connect with and enjoy digital media, and is selling its huge list of patents to Intel for a whopping $120 million. As a part of this agreement, RealNetworks still retains certain rights to continue to use the patents in current and future products.

“Selling these patents to Intel unlocks some of the substantial and unrealized value of RealNetworks assets,” said Thomas Nielsen, RealNetworks President and CEO.

“It represents an extraordinary opportunity for us to generate additional capital to boost investments in new businesses and markets while still protecting our existing business.

RealNetworks is pleased Intel has agreed to acquire our next generation video codec software and team. Intel has a strong reputation as a technology innovator, and we believe they are well positioned to build on the development work and investment we’ve made in this area,” he added.

After this news, RealNetworks’ shares went up 28% at $9.40 pre-market, whereas Intel’s shares edged up 0.3% to $26.98 pre-market.  Intel is also quite optimistic about this alliance, and signed a memorandum of understanding to collaborate on future support and development of the next-generation video software and related products.

“As the technology industry evolves towards an experience-centric model, users are demanding more media and graphics capabilities in their computing devices. The acquisition of these foundational media patents, additional patents and video codec software expands Intel’s diverse and extensive portfolio of intellectual property,” said Renee James, Intel senior vice president and general manager of the Software and Services Group. “We believe this agreement enhances our ability to continue to offer richer experiences and innovative solutions to end users across a wide spectrum of devices, including through Ultrabook devices, smartphones and digital media.”

Intel’s been ramping up efforts to edge its way back into a leadership position in the mobile space in particular, though its developments have seen cross-industry benefits for the chip maker.  Intel also expanded its networking portfolio by buying QLogic Infiniband, which clearly reflects the company’s spree. Check out the complete details of the deal here.