Patent troll sued by cable companies but Huawei settles

January 23, 2014
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gavelNobody likes patent trolls probably not even other patent trolls and it looks for once as if they are finally getting a taste of their own medicine.¬†Rockstar Consortium is in its own words “an intellectual property (IP) licensing company”, which is a polite way to say patent troll. The company produces nothing and only employs lawyers and accountants to go around suing other companies. This particular patent troll was created¬†by a consortium including Apple, Microsoft,¬†BlackBerry, Ericsson, and Sony. The last name on the list is almost unforgivable as what this particular¬†consortium does it sue Android companies, probably at the direction of Apple and Microsoft. The main weapons in Rockstar’s arsenal are a large number of patents it bought when the¬†Canada-based telecom company¬†Nortel went bankrupt.

Although Rockstar claim¬†to “celebrate the value and power of innovation,” five cable companies are attempting to get it¬†to stop bullying tech companies. They have filed a suit claiming Rockstar refused to discuss licensing terms and is unfairly demanding royalties for unspecified patents. The filing also says that¬†Rockstar tried to force the cable companies into¬†non-disclosure agreements to stop them discussing the details with other companies. The suit is asking the court to punish Rockstar for conspiracy and for misusing patents.

We celebrate the value and power of innovation: the ideas that fuel a better way of doing things.

Rockstar’s victim’s are wide spread and it looks like some are finding ways to settle. At the end of¬†October 2013¬†it sued Google,¬†Samsung, HTC, Huawei and other companies for patent infringements. While the other cases are still continuing it looks like¬†Huawei has found a way to end its attack from Rockstar.¬†

In a motion filed this week both Huawei and Rockstar jointly requested dismissal of the lawsuit. Although the filing did not specify that a settlement had been reached, it is likely that a deal has been done. If a deal has been made and Huawei are comfortable with the terms (meaning they aren’t outrageous) then it could pave the way for other companies to settle. Since Rockstar paid $4.5 billion for the Nortel patents the company is probably looking for lots of money to cover its expenses. But it is unlikely that the consortium will¬†be as accommodating with Google and Samsung. as it has been with Huawei.

Google is accused of infringing seven of Rockstar’s patents all of which are related to technology that helps match search terms to advertising. Since advertising is Google’s main source of income such a lawsuit could be potentially harmful. Google isn’t taking this beating laying down and has counter sued Rockstar saying that the company is¬†unfairly targeting Google’s Android partners and customers.

One bit of good news is that¬†Bloomberg reported in December that the consortium was in talks to sell some of its IP¬†because it hasn’t been able to obtain that many licensing agreements.

What do you think? Should patent trolls be banned or are they an important way of protecting innovation?

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