This could be the biggest case of patent profiteering in the history of IT
Rockstar Consortium, the group which acquired more than 6,000 patents developed by bankrupt Canadian telecoms giant Nortel, has launched a number of patent lawsuits against Google, Samsung, HTC, Huawei, Asustek, LG Electronics, ZTE and Pantech.
The consortium is jointly owned by Microsoft, Apple, Blackberry (formerly RIM), Ericsson and Sony, and was previously known as Rockstar Bidco.
The legal action is seen as a strategic move against companies developing devices for the Android OS. It serves as a perfect example of a practice known as ‘patent profiteering’ or ‘trolling’ – businesses buying patents to use them against the competition, in order to derail products and collect licensing fees.
World War Mobile
In 2011, Rockstar’s five members united to acquire Nortel’s war chest, which included important 4G/LTE patents, for $4.5 billion. The amount offered by the group at the auction couldn’t be matched by Google, which raised its bid from the initial $900 million all the way to $4.4 billion.
After losing this battle, Google acquired Motorola Mobility, along with its 17,000 current and 7,500 pending patents, for $12.5 billion.
Nortel, the telecommunications equipment manufacturer with over 100 years of history, was once Canada’s most valuable company. At its peak, it had over 90,000 employees, and was worth nearly $300 billion.
However, despite its impressive size and a long list of accomplishments, Nortel wasn’t able to survive the Dot-Com crash. By 2002, the company’s stock price dropped by more than 99 percent, and when it finally went down in 2009, it took a wide swathe of Canadian investors and pension funds with it.
According to Reuters, Google is accused of wilfully and deliberately infringing seven patents belonging to Rockstar, some of which go to the core of its mobile search and advertising business. The oldest patent in the case dates from 1997, a year before Google was incorporated. The consortium is asking for the amount of damages to be determined by the court.
“Despite losing in its attempt to acquire the patents-in-suit at auction, Google has infringed and continues to infringe the patents-in-suit,” states the complaint filed in the district court for Eastern Texas.
The lawsuits against remaining six companies rely on a different set of seven patents, describing user interface features, networking and messaging, and are aimed at a very broad range of devices.
Meanwhile, Google has just released Android version 4.4, codenamed KitKat.
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