Apple and Microsoft-Owned Rockstar Muddies ‘Patent Troll’ Waters with Google Suit

| The Back Page

Patent holding company Rockstar has raised a ruckus by launching a major patent-infringement suit against Google and several Android OEMs, targeting—if you can believe this—search-related advertising. That's a big deal because it's targeting Google's corporate heart and soul, but it casts Apple—one of the owners of Rockstar—in the role of a patent troll, something that Apple itself has railed against.

Patent Troll?

This is not a black and white issue, by any stretch of the imagination, so let's look at the issues. The first thing is that Rockstar is the holding company formed from Rockstar Bidco—a consortium created by Apple, Microsoft, BlackBerry (then called Research In Motion (RIM)), Ericsson, and Sony—to bid on a massive treasure trove of patents being auctioned by defunct communications and networking giant Nortel.

Google also bid on those patents, and the face off between Google and Rockstar was quickly recognized as a proxy was for the broader smartphone market. The patents were always expected to fetch a pretty penny because of the smartphone patent wars that were well under way at the time, and in the end they did just that.

Rockstar Bidco ended up winning the auction with a final bid of US$4.5 billion. Google stopped its bidding at $4.4 billion, after having bid various nerdtacular figures like $∏ ($3.14159 billion), Brun’s constant ($1,902,160,540), and the Meissel-Mertens constant ($2,614,972,128). Knee-slappers, right?

That Was Then

That was more than two years ago, and it wasn't long after losing that bid that Google plowed $12.5 billion into buying Motorola Mobility. That was widely interpreted as a defensive move for Google, but the reality—as pointed out by John Gruber—is that Google put Motorola's patent trove to work pretty quickly.

Google—under Moto's name—launched a barrage of patent infringement lawsuits and regulatory claims against Apple and Microsoft (unrelated to each other) in venues throughout the world. Most of those have so far come to naught, making the purchase of Motorola a questionable one in my mind.

This Is Now

Today, it's Apple and Microsoft launching the infringement suit against Google and Android as a whole. According to Ars Technica, Google, Samsung, Asustek, HTC, Huawei, LG Electronics, Pantech, and ZTE were targeted with a family of seven patents, some of which deal with search-related advertising.

On the one hand, Android's success was built entirely on the back of Apple's innovations with iOS. As Steve Jobs said, Android is a "stolen product." I agree with that characterization, but some Android OEMs are worse. Samsung's deliberate efforts to copy Apple's patented innovations is foul, especially for those areas where Google steered clear of those innovations (think the "rubberband" patent).

Also stink-worthy is the fact that Google tried to use some of Motorola's standards-essential patents in its attacks on Apple. It was able to do so because "Motorola" asked for licensing terms that were deliberately onerous and outside of Moto's FRAND commitments. This was designed to get Apple to refuse to take that license so that Google/Motorola could sue for infringement. Samsung did the same thing.

To NPE or Not to NPE

In the middle of all this is the ongoing patent wars being waged by non-practicing entities (a.k.a. NPEs or patent trolls). These are companies that don't make anything, but instead buy patents and look for companies to sue.

Patent trolls have been vilified, and rightly so. Take Lodsys, the king of the patent trolls. This firm sues tiny companies for dollar amounts that are large enough to add up, but small enough to discourage a legal defense. The company is extra loathsome in that it runs away when companies do fight back because it doesn't want to risk losing a fight that could invalidate its patents.

The cost of doing business being exacted by patent trolls has gotten the attention of Congress, the Department of Justice, and the Federal Trade Commission (FTC)—everyone sees NPEs as the bad guys.

And that's the problem. Rockstar is an NPE, though an NPE owned by practicing entities (Apple, Microsoft, BlackBerry, etc.). Rockstar is independent from those companies, but at the end of the day it's an NPE owned by Apple and Microsoft.

And at the start of the next day, that means that Apple is part of the problem. To repeat what I said at the top, it's not black and white. Apple is clearly not an NPE, and Apple has historically used its non-SEPs to defend the enormous amount of innovating the company has spent billions of dollars inventing.

To date, Apple has been the victim of patent trolls, something that commentators and fans alike have often stressed. Now, Apple is merely another company using the rules of a broken system to strike at Android.

Good Guys and Bad Guys

OK, I don't really believe that last sentence. Lots of folks have wanted to paint Google as a victim, but Google is itself part of this same problem, and Android is the farthest thing in the world from an innocent bystander.

Google isn't the good guy here, but neither can Apple lay claim to that mantle. In fact, there are no good guys in this fight, and that's the part that sucks. It's hard to root for Apple in this fight when it is party to the same tactics that has rightly earned such condemnation when it comes to patent trolls.

About the best thing that can be said is that at least Rockstar is picking on a company its own size (as noted by John Gruber). It's not like Rockstar is suing little Android developers for $5,000 a pop hoping they won't fight back. Should that happen...

But Can Rockstar Win?

The question, of course, is whether or not Rockstar can win. There's a reason Nortel's patents went for so much, and these particular patents are a big part of it. The people I've talked to said that if the patent withstands a validity challenge, something characterized as a big "if," Google's very search business could be at risk.

Some further reading on this topic:

Image made with help from Shutterstock.

Comments

Lee Dronick

  The people I’ve talked to said that if the patent withstands a validity challenge, something characterized as a big “if,” Google’s very search business could be at risk.

They are too big to curtail, a deal would probably be worked out.

 

jameskatt

I LOVE this lawsuit.

Google has gone on for a long time copying Apple’s inventions with Android.  But it could not be sued directly for such violations since Android makes very little money for Google.  If Apple won a direct lawsuit against Google, the win wouldn’t even pay for Apple’s legal bill.

By creating Rockstar, Apple is now able to threaten Google’s core search business - which makes 95% of its income.  Google can’t sue Rockstar back because Rockstar has no profits. 

This Lawsuit will finally bring Google to its senses and into reality.  No more joking. This is all business.

All Apple wants is for competitors to create their own inventions, not to copy Apple’s inventions. Copying is not competing.

This Lawsuit will force Google to license the patents involved and agree to not copy Apple. And this will then lead to a lasting peace between Apple and Google.

Apple and Microsoft have such an agreement.  Microsoft agreed to not copy Apple and to come up with its own designs.  And they have lived in peace since then - even if they compete in the same markets. 

skipaq

As much as I loath Google’s business centered on selling their customers info; I have mixed feelings about this suit. Parent trolls are just as distasteful, if not more so. What this looks like is Apple, Microsoft and others striking back by proxy using a patent holding company. Hopefully, an effort was made to license these patents on reasonable terms.

Terrin

I do not view Rockstar as a patent troll at all. Rockstar is owned and holds patents by practicing entities. Companies that actually build stuff, and use the patented technology it holds. Moreover, many of Apple’s patents that it holds personally were acquired through other companies like Fingerworks. All Apple and its partners are doing here is creating another company to manage a subset of its patents. The benefit is obvious. If a company like Google refuses to take a license, the company cannot engage in common stall tactics to delay a resolution to the matter by filing counterclaims. This has been Google and friends tactics since the whole smartphone war has begun. Look at the Samsung case. A jury has found Samsung guilty of infringement well over a year ago for a case that was going on much longer, and Apple still has not seen a dime.

Further, when the Nortel patents went up on the auction block, everybody bidding knew why the price was so high. The patents were thought to be valuable. The companies making the purchase expect to make back some of the money from companies infringing the patents.

Moreover, Rockstar is not picking on little guys. It is going after companies like Motorola and Google. If memory serves me correctly. Motorola sued Apple first. After Google purchased Motorola it escalated the fight by seeking injunctions on SEPs and royalty rates that were far from reasonable. Google also had Motorola attack Microsoft again seeking non-frand rates and injunctions over standard essential patents. It simply is unreasonable to think that a company like Google, who is a baby in the technology world, would think it can create an operating system that does not violate patents held by Apple and Microsoft, companies that have been building operating systems since the inception of the modern computer age.

In my mind a patent troll is a non practicing company that holds patents and sits quietly in the dark with them. It waits silently as a company releases a product that arguably infringes on some intentionally vaguely worded patent. The troll lets the product become successful in the market and then jumps out of the wood work demanding a toll under the threat of an injunction. Rockstar so far does not fit this MO. Nortel was a practicing entity and sought licenses for its patents. The purchasers are practicing entities and want a license for the patents.

Bosco (Brad Hutchings)

+10 points for not quoting the Dümlaüt. Dollars to donuts… whatever he says on this, he will already or eventually have a clear conflict of interest that will inform his expressed opinions.

John Dingler, artist

Hi Bryan,
The reason why Rockstar members formed a corporate union, some with their otherwise enemies, is because this corporate union’s enemy is the pseudo-free software maker, Google, and the extreme copyist of IPs, Samsung. These, along with Moto, fired the first salvo to start the combat with Apple and Microsoft, the most significant allies in this World War that is spreading. For the latter two corporations not to fight back would be a surrender to infringers. That they refuse to capitulate in the IP landscape does not make them into NPE at all; In the context of this legal fight, It makes them into law-abiding citizen who stand up to bullies.

mybanana212

I suggest you avoid purchasing products from all of the companies listed;  The consormium itself is a NPE or Non-Practicing Entity.  They are closer to a sort of overhead-creating organization.

In any situation, it seems that most of these attorneys have a lot of college loans and the only way to pay them back quickly is to make a name for themselves by suing Google;  It will be interesting to see individual attorneys names on the suit; along with the practices they are at.

In any situation, Android was inspired by The HipTop SideKick.  A few former VPs at T-mobile left the company to produce a linux-based version of the Java-Based Sidekick, because Linux was more complete.

Ultimately, a prototype was designed, and created; the HTC Dream was the first hardware specification.  It was based on hardware and chips, as well as a spec design, that royalties were paid for when the chips were purchased.

Rockstar has very little to stand on,  However, if Rockstar’s patents are related to smartphones (they likely aren’t; most smartphones were based on Nokia Series60; and Nortel never manufactured phones), Rockstar should instead go after the chip designers in the phones for royalties related to hardware.  This may include Infineon, Intel, and Qualcomm.

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