The Ontario Securities Commission has blocked an attempt by Wi-LAN (TSX:WIN), to kill a poison pill defence set up by Mosaid Technologies Inc. (TSX:MSD) to fend off any hostile takeover bid.

The regulator ruled late Wednesday that Mosaid’s shareholder rights plan can stay in effect until Nov. 1 after the Ottawa-based patent licensing company said an unidentified private equity firm is considering a takeover offer that is “meaningfully superior” to a bid by Wi-LAN.

Mosaid repeated its call to shareholders in a statement Thursday morning to not tender to the Wi-LAN offer, which values the company at $480 million, as it works to find a richer alternative.

“By tendering to Wi-LAN’s inadequate bid, shareholders may foreclose an opportunity to benefit from a possible value-enhancing alternative,” the company said.

In an affidavit Wednesday, Neil Selfe, an investment banker hired by Mosaid to help find a rival offer, says the unnamed bidder needs four to six weeks to review the company, negotiate a deal and settle financing before making an offer.

“The potential bidder is a substantial private equity firm with an international presence, over $5 billion of capital under management and noted previous success investing in Canadian public companies in competitive situations,” Selfe said in the affidavit to the OSC hearing Wednesday.

BMO Capital Markets analyst Brian Piccioni, who has a $49 price target on Mosaid, called the news “potentially positive” in a brief note to clients.

Under its hostile bid, which expires Friday, Wi-LAN has offered $38 per Mosaid share.

Mosaid shares were up four cents at $40.50 in morning trading on the Toronto Stock Exchange on Thursday, while Wi-LAN shares were down 22 cents at $6.12.

Companies fighting off unwanted takeovers usually seek so-called white knight bidders, either to get a higher price for shareholders or to entice a sweeter offer from the hostile bidder.

Investment banks and others hired by target companies will often try to drum up interest and help get the highest price possible in the market.

Technology patents have become valuable assets in the telecom and wireless technology business.

In its ruling Wednesday, the OSC said it was “satisfied that the shareholder rights plan is still serving a purpose by providing an opportunity for continuing the auction process, which may enhance shareholder value.”

The OSC order said the commissioners found no evidence to suggest that Wi-LAN’s offer was coercive or unfair, but it also noted that Mosaid shareholders voted to renew the poison pill on Sept. 22 after Wi-LAN announced its offer.

A shareholder rights plan usually makes it prohibitively more expensive for an unwanted bidder to succeed in a hostile takeover because it floods the market with new shares or imposes other conditions.

Companies like Mosaid and Wi-LAN generate revenue by licensing technology rights to large telecom and computer chip makers, which have recently demonstrated that they’re willing to pay hundreds of millions or even billions for patents.

Google Inc. paid a 63% premium for Motorola Mobility, mainly to get its hands on its 17,000 patents, while a group including Research in Motion, (TSX:RIM), Microsoft Corp., and Apple Inc. spent $4.5-billion in June to buy 6,000 patents owned by Nortel Networks.