Last week on October 31st, a nightmare scenario that Google hoped to avoid came to pass. Attorneys for Rockstar Consortium filed suit in the Eastern District of Texas against Google and seven handheld device makers that employ Google’s Android operating system on their devices. The suit alleges infringement of seven patents all titled “Associative Search Engine.” The patents, 6,098,065; 7,236,969; 7,469,245; 7,672,970; 7,895,178; 7,895,183; and 7,933,883, were filed from 1997 to 2007.
Rockstar Consortium was founded in 2011 and is jointly owned by Apple, Microsoft, Blackberry, Sony, and Ericsson. The consortium was founded to bid on the patent portfolio of Canadian telecom company Nortel, which was liquidated at auction in 2011 when the company went bankrupt. At the time, Google attempted to purchase the patents, likely to avoid just such a lawsuit, but their top bid of $4.4 billion was exceeded by Rockstar, which purchased the patents for $4.5 billion.
Google’s failure to land the patents may now be costly for them as well as Android device makers. Rockstar is part of an emerging new trend in the “patent troll” movement where large corporations assign or give their patents to small companies, for the purpose of reverse engineering existing products and for extracting licensing fees and damages from alleged patent infringers.
This model allows a company with few employees–Rockstar has only about two dozen employees, including ten reverse engineering experts–to obtain license fees from potentially hundreds of tech companies. A small consortium like Rockstar has another advantage in a fight against a tech company like Google, they have no products or business of their own. They cannot be counter sued for infringement because they have no business that would infringe. The crux of the situation is that companies like Apple and Microsoft can inject capital into a Rockstar type partnership, which will then purchase patents and use them to attack Apple and Microsoft competitors while leaving Microsoft and Apple above the fray.
The companies backing Rockstar are likely seeking to put a damper on the rabid growth of the Android platform. However, with the talk of legislation to control patent trolls, the Obama administration’s concern over standards essential patents, and the Justice Department’s comments on Rockstar committing to fair terms for standards essential patent licenses, it will be difficult to predict the outcome of this suit. If Rockstar sees success here, this may become the new battlefront between tech companies in the aftermath of the monstrously expensive Apple v. Samsung case.