Almost two and a half years ago, Google lost the Nortel patents auction to a consortium of six industry leaders (Apple, BlackBerry, EMC, Ericsson, Microsoft, Sony) who just wanted to clear the market before anyone would abuse Nortel's patents, particularly its 4G/LTE patents, the way Google's Motorola Mobility still tries to abuse its standard-essential patents. The price for preventing abuse was $4.5 billion, several times what analysts expected before the auction. Google had won a "stalking-horse" bid, which was not the real game, with a $900 million bid. It famously bid pi billion dollars and other multiples of mathematical constants, showing a strange sense of humor with shareholders' money. Its highest bid, as is now documented in a publicly-accessible court filing, was $4.4 billion -- then it dropped out, Rockstar won, and Google later, in panic mode, wasted $12.5 billion on the acquisition of Motorola Mobility, over whose patents Google currently has precisely zero (you know, the number that looks like the letter O) enforceable injunctions in place against its rivals on a worldwide basis and whose video codec and WiFi patents entitle it to less than $2 million a year in royalties from Microsoft.
Fast forward to Halloween 2013. Apparently the Rockstar Consortium's efforts to subsequently negotiate patent license deals with Google and the wider Android ecosystem have been unsuccessful because at least eight Rockstar lawsuits were filed in the Eastern District of Texas: separate actions against Google, Samsung, Huawei, ZTE, LG, HTC, Pantech, and ASUSTeK. I don't know what happened in those negotiations, but maybe Google was a sore loser and tried to defy logic. The simple logic here is, in my view, that if you bid $4.4 billion for a patent portfolio (just not enough to win the auction), you can hardly dispute later that the patent portfolio in question is a treasure trove. And if you want to license a treasure trove, it costs you more than licensing something of little value such as some Motorola patents covering pre-World-War-II-style interlaced video and minor WiFi features. You can't just bid $4.4 billion -- thereby validating the portfolio in the commercially most meaningful way -- and later refuse to pay a significant amount for a license. This is, figuratively speaking, a case of venire contra factum proprium. No jury, whether in East Texas or elsewhere, is going to buy that.
No one can assert thousands of patents at the same time. Rockstar has now made its initial picks, and it presumably thought very carefully about which patents would likely give it leverage in litigation. It has apparently taken its time and tried hard to resolve the issue through licensing rather than litigation. But litigation turned out inevitable, and it surely prepared for that scenario, too. That's the nature of patent licensing.
There are two categories of lawsuits. A lawsuit against Google's core business -- its search engine -- involves different patents (all from the same family of associative search engine patents, which goes back to the time before Google was even founded!) than the seven lawsuits against certain Google hardware partners. Google has been proud of its own search engine patents, including the patent without which Google might not even exist today (the PageRank patent) or at least not be a monopolist. It now has to respect the work Nortel did in this area and which Google built on. It will have to pay up because Congress is not going to bail it out. The Rockstar Consortium is a co-plaintiff in all eight cases (Google and the OEM cases). Against Google, it is joined by its subsidiary NetStar Technologies, and by another subsidiary, MobileStar Technologies, against the device makers.
Defendants will presumably try to move these cases out of the Eastern District of Texas to other districts. It would be more efficient to keep at least the device maker cases in Texas since it's all about the same patents, but I can understand that defendants have different preferences. In Rockstar's case, resources are not going to be an issue. If necessary, it can pursue these cases in eight different districts in parallel, or bring even more lawsuits if others don't get the message from the Halloween lawsuits and continue to refuse to pay up.
I'll now publish the complaint against Google, followed by a list of the patents asserted against Google, and then the Samsung lawsuit (the lawsuits against the other device makers appear to be consistent), also followed by a list of the patents-in-suit.
Patents-in-suit against Google
U.S. Patent No. 6,098,065 on an "associative search engine"
U.S. Patent No. 7,236,969 on an "associative search engine"
U.S. Patent No. 7,469,245 on an "associative search engine"
U.S. Patent No. 7,672,970 on an "associative search engine"
U.S. Patent No. 7,895,178 on an "associative search engine"
U.S. Patent No. 7,895,183 on an "associative search engine"
U.S. Patent No. 7,933,883 on an "associative search engine"
Patents-in-suit against Google's hardware partners (Samsung, Huawei, ZTE, LG, HTC, Pantech, ASUSTeK)
U.S. Patent No. 5,838,551 on an "electronic package carrying an electronic component and assembly of mother board and electronic package"
U.S.Patent No. 6,037,937 on a "navigation tool for graphical user interface"
U.S. Patent No. 6,128,298 on an "Internet protocol filter"
U.S. Patent No. 6,333,973 on an "integrated message center"
U.S. Patent No. 6,463,131 on a "system and method for notifying a user of an incoming communication event"
U.S. Patent No. 6,765,591 on "managing a virtual private network"
U.S. Patent No. 6,937,572 on "call trace on a packet switched network"
Rockstar and MobileStar are seeking a permanent injunction ove the above patents.
Some of these device makers also build Windows Phone products, but the infringement allegations are limited to "mobile communication devices having a version (or an adaption thereof) of Android operating system", showing once again that Google's intellectual property stategy for Android is a failure that exposes its ecosystem to liability issues. Some of the infringement allegations appear to be Android-specific, possibly resulting in interventions by Google in the device maker lawsuits and suggesting that no one will be able to build Android devices without a license from Rockstar/MobileStar.
22 royalty-bearing Android patent license deals have already been announced. It also appears that Nokia has reached, or is very close to reaching, a tipping point in its dispute with HTC, which will result in another such deal pretty soon -- and not just a Nokia-HTC deal but deals between Nokia and the rest of the Android ecosystem (it's also negotiating with Samsung). And RockStar will strike patent license deals with each and every Android device maker. One Android device maker, Sony, is a member of the consortium -- and patent licensing could increase Sony's competitiveness within the market for Android devices.
By the way, as Intellectual Asset Management (IAM) magazine points out on Twitter, "[a]ccording to the FTC definition, Rockstar should not be regarded as a patent assertion entity (PAE)". Google got more help from U.S. antitrust regulators than any other company in this industry, but there's a limit even to that, and it will now be left to its own devices to sort out this situation. It can sort it out with money. A rather substantial amount of money, I guess.
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