Patent war escalates: Apple and Microsoft-owned company sues Google and most big Android OEMs

November 1, 2013
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The intensity and scale of the global patent war just went up a notch. Yesterday, a company that is co-owned, among others, by Apple and Microsoft filed lawsuits against Google and seven of the largest Android manufacturers.

Rockstar Bidco

The company is called Rockstar, and was established as a consortium in 2011, to bid on the trove of technology patents left behind by the bankrupt Canadian technology company Nortel.

Back then, Apple, Microsoft, RIM (now BlackBerry), Ericsson, and Sony teamed up to bid for almost 6,000 of Nortel’s patents, many covering mobile technology. The so-called Rockstar Bidco consortium eventually won the auction, with a bid of $4.5 billion. The other big competitor in the auction was Google, who bid $4.4 billion before giving up. Later, Google bought Motorola for $12.5 billion, and its own treasure trove of patents was reportedly one of the main reasons behind the acquisition.

Rockstar was widely expected to attempt to monetize the 6,000 patents it bought from Nortel, and this week the company made its first move by filing lawsuits against Google, Asustek, HTC, Huawei, LG Electronics, Pantech, Samsung, and ZTE. The suits were filed in the Eastern District of Texas, a district that is well known for favoring plaintiffs in patent cases.

Patent trolling through a proxy

The complaint against Google involves six patents related to serving ads in a search engine describing “an advertisement machine which provides advertisements to a user searching for desired information within a data network”. The technology isn’t related to mobile, but it’s a frontal attack to Google’s bread and butter business, AdWords. The oldest patent precedes Google’s founding, being awarded in 1997, while the newest was awarded in 2011.

Rockstar attacked the group of Android manufacturers with a batch of seven diverse patents, including ones that pertain to navigation through electronic interfaces or to an integrated message center.

The stakeholders of Rockstar claim that the consortium acts independently. And, because Rockstar doesn’t have any operations of its own, Google, and other companies in its sights, can’t retaliate with a countersuit, like Samsung did with Apple.

Because Rockstar is a distinct entity, it can even sue companies that its owners have patent agreements with – for instance, Apple and HTC signed a 10-year patent licensing deal, but that didn’t shelter the Taiwanese company from Rockstar’s suit. Sony, as a stakeholder in Rockstar and a major Google Android partner, is also in an interesting position.

Patent lawsuits can take years to finalize, and it’s not clear yet if the patents that Rockstar yields as a weapon against Google and Android OEMs are essential to their business. In other words, there’s a long way to go before these lawsuits have any tangible effects. However, the fact that Rockstar has finally commenced its attack should be worrying for consumers, who have absolutely nothing to gain from it.

 

 

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