In another sign of the continuing end of hostilities between the world’s smartphone manufacturers, Rockstar Consortium, Inc. has announced the sale of 4,000 patents to RPX Corp. The portfolio was originally obtained by Rockstar in a bidding war that took place during 2011 between Rockstar and Google to obtain the intellectual property from Nortel Networks. Rockstar is a consortium made up of Apple, Microsoft, Blackberry, Ericsson and Sony. RPX licenses patents to companies that join their syndicate, including Google and Cisco Systems.
When Rockstar obtained the Nortel patent portfolio, they paid about $4.5 billion to get 6,000 patents. 4,000 of the patents were held in common by Rockstar while the remaining 2,000 patents were divvied up between the companies that made up the consortium. RPX ended up paying only $900 million for the portfolio in the sale announced this week.
Rockstar was created as a way for the companies that joined together to reach licensing deals with other technology companies, under threat of patent litigation. Last year Rockstar started the courtroom phase of their business strategy with several lawsuits filed, including actions against Google and Cisco. The suits against those companies were settled last month for an undisclosed amount, although Cisco has reported to investors that it recorded a pretax charge of $188 million to settle.
Rockstar’s CEO John Veschi indicated in 2013 that “given the price that parties were willing to pay for these patents, talks to license them would be much easier.” With Rockstar’s hopes not panning out as planned, the company turned to the sale to RPX as an exit strategy.
As part of the deal, RPX will be dropping the remaining lawsuits filed by Rockstar against companies like Samsung, LG, HTC, and Huawei.
According to a Microsoft statement from Erich Anderson, deputy general counsel, the company joined Rockstar “to ensure that both Microsoft and our industry would have broad access to the Nortel patent portfolio, and we’re pleased to have accomplished that goal through this sale.” Ericsson has also issued a statement indicating their approval of the sale. Other members of the Rockstar consortium have not issued any comment.
Chief executive John Amster of RPX thinks the sale indicates the industry has moved to a new stage where “people have started to realize that licensing, not litigation, is the best way to make use of patents.”
Although the sale of the portfolio to a company that uses patents for defensive purposes only, there is still a downside. The 2,000 patents that were divvied up between the companies were generally viewed as the more valuable patents and those still remain in the hands of those companies and could be used in non-defensive ways.
source: Wall Street Journal
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