01
Nov
money

Stop me if you've heard this one before. Reuters reports that the Rockstar consortium, a joint effort between Apple, Microsoft, Sony, and Blackberry, has sued Google and Android manufacturers Samsung, HTC, LG, ASUStek, Huawei, ZTE, and Pantech over patents formerly held by the now-defunct Nortel Networks. Rockstar won the patents in an auction in 2011 that topped out at $4.5 billion - Google lost the same auction with a $4.4 billion bid.

tyler

East Texas: where tech companies go to bleed money.

The companies were sued in eight separate filings in the eastern district court of Texas, which is now famous for its generally favorable disposition towards plaintiffs in patent suits. Rockstar is suing Google in particular over seven individual patents relating to its search engine software, one of which was filed even before Google was incorporated. The scope of these patents is broad, but they cover core search technologies, including the incorporation of users' profiles and history and serving advertisements based on search results. That's kind of a big deal for Google, which still derives the vast majority of its $50+ billion-a-year revenue from advertising.

The suits against the manufacturers use seven more patents, repeated for each defendant. These are even broader, covering everything from PCB hardware design to network data to graphical user interface elements, but specifically targeting those applications of the patents used in Android. Interestingly, the defendants include some of Microsoft's own licensees for Windows and Windows Phone (Samsung, HTC, Asus) and Apple's business partners in the hardware supply chain (Samsung and LG). The Rockstar consortium and its subsidiaries had previously entered licensing negotiations with the defendants, but could no reach agreements. Rockstar is seeking permanent injunctions in all cases, meaning that potential settlements would probably include huge licensing fees.

To wrap this up: the companies who won a gigantic patent auction wanted a ton of money from every other major player in the search and mobile business. The other companies balked, and now they're going to hit them with a gigantic financial stick provided by the USPTO and the federal court system.

The prognosis for Google and Company isn't good. Most of these patents predate the explosion of the mobile market, and their technical merits are hard to deny. The defendants will likely try to argue to get some or all of the patents invalidated for being too obvious or broad, but it's almost inevitable that at the end of this long, long process of suits and appeals, lots of money will be headed towards the hands of the patent holders. While this case serves as a good example of the problems with the US patent system in general and software patents in particular, it's unlikely that long-awaited patent reform will arrive in time to help the situation.

Source: Reuters

Further reading: FOSS Patents

Jeremiah Rice
Jeremiah is a US-based blogger who bought a Nexus One the day it came out and never looked back. In his spare time he watches Star Trek, cooks eggs, and completely fails to write novels.
  • Michael Montanez

    So Sony, who makes Android handsets, is part of the sueing team against google? wow......

    • jonathan3579

      I've been trying to wrap my head around this since I read about it last night.

      • gtg465x

        The jizz on a griddle comment?

        • Jadephyre

          No, his comment was here before mine, I think he meant trying to wrap his head around the fact that a manufacturer of Android handsets is suing Google, in this case Sony ;)

    • Jadephyre

      The credit they've won in the Android Developer Community in the last two years is going to fizz out faster than jizz on a griddle due to this, mark my words.

      • Nevi_me

        When the dust settles, Sony will have lost its reputation as a new result of their affiliation. They might as well kiss their mobile ambitions goodbye. Somehow I don't see them striking it with Windows Phone, Jolla or others.

        • Jadephyre

          I agree on this. Sony is kind of on a loosing side since their TVs are too expensive and don't offer substantially better value than other competitors. Heck, I can buy a Samsung TV with WiFi for as little as €350 in 32inch (I have a small apartment, don't need bigger) try and get that from Sony and you'll be mildly disappointed.
          Anyway, this isn't good for them, period

      • Mike Reid

        Sony has "made a lot of noise" about dev/open source friendliness, but the end result has been very disappointing.

    • Chris

      I know Android is an open source platform, but couldn't Google essentially prevent Sony from ever using the Play Store on their devices?

      • Jadephyre

        Yup, there's a certification process involved, you may have heard about it a while back from CyanogenMod who are going through this at the moment to be able to deliver CM for the new Oppo device and to include the normal separate Gapps package. If Google says nay to Sony, they've had it, end of line.

        • RajivSK

          Absolutely out of the question. Google can only deny Sony the use of their services if there is legitimate reasons for that. Being sued by them is obviously not one of them. That's like suing Microsoft and being denied the use of windows..

          • Adrian Meredith

            not necessarily, being part of the open handset alliance could well have included agreements not to sue each other

          • RajivSK

            Yes, in that case, they can. I should have phrased it differently.

          • Chris

            Comparing Windows to Android in terms of licensing is like comparing a football to a tennis ball. They both can be played with, but serve two completely different purposes with completely two different set of rules.

            I'm sure there is somewhere that would consider all of this a 'conflict of interest'.

  • quasibaka

    How is Sony on the other side of the action ?

    • VAVA Mk2

      The rest of the consortium likely drug them into this. Sony likely got into the consortium as protection from patent suits like this one. I bet they are surprised. If they want Google gracing their phones with Google services, they had better make a statement soon.

  • ih8legal

    This is enough to make me cry.

  • http://www.dsaif.com/ Saif

    If Sony is doing this, they'll be out of OHA.

    • aiden9

      Sony was one out of seven companies who were a part of "Rockstar Bidco" in the auction. I severely doubt they had much say in the case.

  • Fabio

    LOL, Sony

  • Jason V

    Talk about biting the hand that feeds you (mobile-wise). Way to go sony.

    • Mark

      You assume that Sony knew the reason when they were part of the consortium. Far more likely they did this to protect THEMSELVES from patent protection.

      But then this is Sony, they a Japanese, and dumb-ass Americans will hate them be default, yet openly encourage Microsoft and Apple in the same breath.,

      • Chris

        Your response started out credible, but then you let your hatred out and now I see you're just arrogant.

      • Forget_you

        why will americans hate them by default? oh they won't your just talking out your ass you idiot.

    • WalkinOnBottles

      "the Rockstar consortium, a joint effort between Apple, Microsoft, Sony, and Blackberry, has sued Google and Android manufacturers Samsung, HTC, LG, ASUStek, Huawei, ZTE, and Pantech over patents formerly held by the now-defunct Nortel Networks."

      Talk about focusing on one company. Pretty sure Sony Mobile is quite confused themselves over the situation but the Sony members (note: I didn't state Sony Mobile members) on the consortium are strictly focused on protecting assets rather than Sony Mobile as a whole.

      Of course, they've done more for the Android community than HTC, Huawei, ZTE, and Pantech have, but that doesn't matter because y'all are quick to jump to conclusions.

  • Dustin Dwayne Wann

    Let's just show them, and not buy Microsoft, Apple or Sony products for awhile.

    • Frettfreak

      easier said than done. Xbox One, PS4 and Windows... i dont buy anything apple ever and have not just because i dont like their company. Seriously contemplating making the switch to linux on my desktops though

      • Dustin Dwayne Wann

        Agreed. I plan on getting a PS4, sadly I'll be supporting them. I like Apple, because there updates for osx only cost $20, and you can install it on all of your Mac computers. Not over $100 for an upgrade for one computer.

        • afazel

          You could always get a Steam box instead of a PS4

          • cy_n_ic

            ^ Lulz

        • http://about.me/jovanphilip Jovan Philip

          Linux is free. Unless you're doing serious media creation or something that specifically requires an Apple product, it isn't worth it bro. This is coming from someone who actively uses all three of them in an every day scenario.

          • Dustin Dwayne Wann

            Oh no, I don't own apple products. Just use them at church for our media, so I'm the one that keeps them updated. When I get around to getting a computer, it'll be running Linux for sure.

    • Jason

      Google is not innocent here either. They've been suing other companies for years, hiding behind similar patent-troll companies.

      This isn’t David vs Goliath. This is Goliath vs Goliath. Picking a side is silly. They’re mega-companies who want your dollars. Nothing more.

  • http://dabuxian.com/ Dabu

    American law is really silly, isn't it.

  • naysayer

    Please stop citing FOSSPatents. You can't assess the danger for Android based on a guy who will always claim that it's game over for Android.

    • Frettfreak

      thats what i was thinking. that guy HATES android for some reason. I have had that same thought for a while!

    • http://about.me/jovanphilip Jovan Philip

      He's paid by Apple to hate Android. The US needs serious patent reform before this guy will go away. I'm willing to bet that if his bread and butter were taken away he'd jump ship.

    • http://www.rebelwithoutaclue.com/ Rebel without a Clue

      Wow, never heard of the guy and googled him. I read a small piece of his blog on this issue. And only 1 sentence is enough to know he's getting buttfucked by Apple and likes it.

      Quote:"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."

      Seriously, the consortium wanted to clear the market preventing patent abuse? lol

  • Wellington

    Microsoft, Apple giving more reasons to hate them

  • http://www.jaxidian.org/update teh Jax

    So if Google purchased Blackberry, would they automatically be part of the consortium them, granting them immunity to such a lawsuit?

    • RajivSK

      Interesting.. The rest of the consortium would of course go out of their way to prevent any such takeover.

      • Akmal Zharif

        who would throw money as much as google do? apple? i dont think so

  • https://plus.google.com/106261148188435264925/about Aaron Echols

    So, why are patents, from a company that no longer exists, allowed to be used at all? If a company goes under, their patents should go with them. Bar none.

    • Jadephyre

      Agreed. Patents should not be a tradeable commodity when the company that filed them no longer exists.
      Well, in all honesty I don't even think that patents should exist, but that's neither here nor there.

      • kirk

        You guys just don't get it. Let me clear this up, for you. The real purpose of patents is so that companies can just have an idea and patent it, or buy it from someone else that had an idea, and then use government power to make enormous amounts of money without doing any work. Well no work besides calling up the lawyers and saying "sick 'em".

        For example, If this were the furniture industry. One company would have patented the chair, and nobody else would be allowed to make a "sitting apparatus" without paying royalties. The patent holder wouldn't even need to go to the trouble of making or selling chairs themselves.

        //the real reason patent laws were enacted-- according to US courts

        • Jadephyre

          I know why patents exist, i've been around for a while on this dirty rock to know. I just think that they shouldn't exist, at all, period.

        • https://plus.google.com/106261148188435264925/about Aaron Echols

          I get patents, and I'm fine with patents. But they should be localized only to a company. Once that company dies off, it's free game. They shouldn't be allowed to sell them, etc.

          • deadpenguins

            I agree with you, but in that event other companies would just write up identical patents and take the idea for free, no? At least this way there's some transfer of money rather than blatant stealing.... The whole system just feels dirty and riddled with problems. Law and politics. Le Sigh.

    • Dave Haynie

      Maybe they should. But patents are literally considered intellectual property -- something you can buy and sell. That's actually inherent in the system, in fact (I spend part of my time working in patents). Only the inventors of a patent can be listed on that application, and once granted, they own it. In most cases, the patent the product of work for hire -- my company paid my salary in exchange for all my work-related good ideas. So a patent is immediately assigned to your company once granted. And it can be licensed, sold, bought, etc. just like any other IP (FPGA cores, software, music, etc).

      A big part of the problem with patents (and in fact, so many other things in modern life) is that the system very poorly reflects the reason patents exist. There's no inherent need for patents. Rather, I could be sure that most of what I'm doing in technology remains as secret as possible for as long as possible, at least making it very expensive for someone else to copy my work. Or, without patents, maybe copyright would be stronger. But whatever -- the original intent of the patent is to PUBLISH the complete workings of an invention, in return for a very temporary monopoly on that invention. And realistically, back in the 1700s, seventeen years wasn't a long time to wait, based on the rate of growth of technology. You get a full set of plans, essentially, as a matter of public record. The point of issuing patents was entirely to PROMOTE the growth of new technology, by making it much easier to "stand on the shoulders of giants".

      Today, of course, patents are issues for 20 years from the date of submission (utility patents anyway).. that could be three or four generations of a product. And if it take you 5 years to get it accepted, your patent could surface just as that market it taking off, clobbering everyone. Particularly given what's supposed to be a fundamental requirement: a patent should cover something that's not "obvious to one skilled in the art". This is particularly troublesome for older software patents, as the US PTO didn't even have software engineers in the office -- anyone qualified to just that whole "skilled in the art" thing -- for over a decade after they started granting software patents.

      The other big problem with software patents more than anything is that the PTO generally lets you fudge disclosure. When I patent a design based on some kind of hardware, mechanical or electrical, I have to provide very detailed drawings or schematics or whatever. If I don't, the patent can be an easy target -- if it doesn't reveal enough of the invention, it can be struck down just on that condition. In theory, anyway. Early software patents had to produce source code, and that source code would go in as a listing or a CD as part of the patent portfolio. Naturally, software companies didn't like that at all, making their source code available as a matter of public record. And since they have lots of money and good lobbyists, this is no longer the case -- no software is included anymore, usually just flow charts. Software patents usually cover the system design, not the detailed operation of the software.

      The problem with that is easy to see: you can patent an invention, a very specific way of doing something, and of course make the claim that doing the same thing the same way is infringing, even in different technology. But when what you're doing isn't that clear, it's pretty obvious that all kinds of room is left for lawyers to battle over what actually constitutes infringement. But once granted, a patent is assumed to have been properly vetted -- so the courts tend to favor the patent holder. And worse still, juries don't begin to understand how vague software patents can be.

      But big companies, they know. And in fact, they work that, much in the way that other technologies get optimized. Even back in the 1980s, for example, IBM had found their patent licensing division was a profit center. And IBM only ever charged for "three or more" patents, using standard licensing .. didn't matter how much you used, they wanted $N% per unit, subject to negotiation and cross-licensing. IBM had figured out how to hack the patent system... they didn't file patents based on innovative work. They filed patents based on very skilled patent lawyers sifting through everything IBM did and writing patents on that. Did you know IBM invented cut and paste between multiple text buffers? And in 1984? Most people would guess much earlier, particularly folks doing that very thing back in the 70s. But the PTO is so busy, they pretty much only consult prior patents. I know about the IBM thing... I even visited their gigantic patent offices in Boca Raton, FL... larger than the engineering offices of the billion dollar computer company I was working for at the time. I'd be amazed if every large company didn't have similar lawyers working the system and patenting anything they can push through the system.

  • nnn

    in short, apple and microsoft know they are losers

  • Seanzky

    Trolls tend to rear their ugly heads on Halloween.

  • Phill_S

    The one I feel sorry for most is HTC. They paid off Apple to never get sued and now a year later a consortium including Apple have bought up a patent portfolio for the sole goal to patent troll Google and friends, inc HTC.

    Given their financial problems there is a good chance this could send them into bankruptcy.

    I also think Google is going to make a huge fight of this. There will be a big counter suit with their patent library from the purchase of Moto (which most thought was a defensive move for this moment) and they have the deep pockets to take it the distance.

    • Dominic Powell

      This needs to stop. the POTUS needs to step up and put patent reform on the table. This is garbage. Companies that go out of business like Nortel Networks patents should be free and distributed with no further patent infringement suits possible using said patents.

      Furhter Technology patents should last 1 - 2 years at MOST. the state of change is so rapid, its not the pharmaceutical industry where it takes 10 - 20 years to develop a successful drug. I could literally dream up some piece of shit arbitrary obvious thing in my bed.

      • kirk

        Actually the congress needs to put patent reform on the table, they would be legislative branch of government. But yeah, it needs to be on the table either way.

        Whether they do or not, depends on who is buying them their offices. The good news (sarcastic "good news") is every smart company knows to pay off (or "contribute" if you prefer euphemisms) both sides of the isle. Just like AIG, they just can't lose that way.

        Which means? there won't be patent reform.

  • dwayne

    If its about the search engine I often wonder why they don't include yahoo. They do much of the same thing Google does in search.

    I know I can answer my own question but I wonder in such situations how they or anyone is allowed to pick and choose who they want to sue for infringing patents while letting others slide.

    • Tarun Pemmaraju

      Because Y! Search = Bing?

    • EH101

      Generally speaking, a company will sue one infringing person/company in a popular court to keep costs down and, in the case of winning, set a legal precedent. Once precedent is set, it is extremely hard for defendants to get it overruled. (Judges don't overrule precedent very often)

      So after precedent is set, the company will tell all others "pay us this much or we'll sue" and usually the others will pay because judges and juries have a habit of over-compensating the plaintiff, as in the case of Apple vs Samsung, where the jury set the amount of damages in order to punish Samsung when they were explicitly told the amount should be only what is owed and not a form of punishment.

  • TechGuy

    Let's hope the rest of the world follows the example of New Zealand who are banning software patents.

  • TechGuy
  • Frettfreak

    So google needs to tell sony to find another OS. plain and simple. Wish HTC asus and Samsung would tell MS to piss off and stop making windows phones and Samsung needs to tell apple to find someone else to make their chips. Lots of lost money for all parties but desperate times call for desperate measures.

    • Jadephyre

      Well, since Android is open source, Sony could still use it.
      The only thing Google could do would be to deny them the use of the PlayStore through their certification program. No PlayStore also means no GMail and other apps normally included with Android handsets.

      • Frettfreak

        thats as good as killing it for them. Who wants an android phone with no google services... not me. Thats why i dont like the kindle fires either.

        • Jadephyre

          I know, that's the beauty of it.
          But hey, Sony could start using that hackjob Ubuntu xD

        • VAVA Mk2

          I use Android because I love Google's services. No Google, no purchase.

  • Mark

    I think I know what the A stands for in the "good old US of A".

    Congratulations, the whole world is laughing at your dumb-ass laws that allow companies to buy patents and then use those bought patents in courts.

  • Patrik Carlsson

    Only in America...

  • Andy Stetson

    makes me think all winblows phones are going to be Nokia and Sony in the future, with Samsung, HTC and Asus dropping support for them.

  • Shitiz Garg

    It took me a few minutes to realise we're not talking about the game development studio Rockstar here.

  • Obbamaa

    Where's Putin? I'm sure he can settle this without needed to go to court.

  • MrNinjaPanda

    I guess that means there won't be a Sony Nexus phone any time soon.

  • Justin Quang

    Guys. Send this over to Obama and see what he's gonna do about it since he yaps about patent trolling. And I hope Google and co are doing this as well.

  • Stoner

    Apple, Microsoft und BlackBerry. So the biggest 3 loser come together:-) Honestly I don't know what is apple's problem with Android. Apple is still making money like hell with overpriced devices. But then apple can not expect to play any greater roll in regards of market share. Both is simply not possible, and has nothing to do with Android. An iphone5c is just a joke, and will not help to sell in boom regions like india or china. A 6 year old kid could have estimate this before.

    • sguyx

      problem with android? Have you checked market shares lately? iOS is going slower and slower (where they should be, lol) and Android is top. Samsung is the biggest manufacturer, grows fast while ipads sells badly and Apple is loosing possible customers...

      • VAVA Mk2

        Maybe if Apple spent less time in court and more time coming up with something fresh and original (iOS 7 was a giant rip off of everyone else with crappy icons), then maybe they would not be in this mess. Microsoft, Apple, and RIM are all in this mess now because they all failed to innovate and stay fresh and current with their offerings (although I will admit Windows Phone at least has tried to be different and moden). Maybe they will stop sitting on their asses and try harder.

  • Testraindrop

    Now its time for Rockstar (Games) to sue this consortium for using their name and therefor bringing a bad image with it.

  • amir80

    Google offered 4.4 billion $ for these patents. If they pay less that they, they will actually win...

  • http://about.me/jovanphilip Jovan Philip

    Why are patents transferable in the first place? They should be non-transferable and made public domain once the original creators no longer exist/die. In an ideal world they should not exist at all, but that's just wishful thinking on my part.

    • Björn Lundén

      If I were to speculate, I think the idea is that an inventor patents something privately. Then he/she decides to start a business based on the invention. He/she might then want to transfer the patent right to the newly started company to simplify things.

      Of course, this is now grossly misused.

  • kamiller42

    Please come back Groklaw.

  • RichF

    I wonder if HTC can get its claims dismissed based on apple's involvement and the companies' cross-licensing settlement from their previous tiff.

  • DEstructo

    Just FYI the website you linked to "fosspatents" is run by Florian Mueller who is a well known anti-Google shill. He was paid by Oracle to trash Google and pretend it was objective analysis during the java lawsuit against android.

    • Dean Politis

      Anything from Florian Mueller should be disregarded.

  • Dean Politis

    If I recall correctly, didn't this consortium say that they only bought Nortel's patents to prevent them from being sued not to go after any companies. It sounds like they wanted to attack Google.

  • Brad Kalinoski

    When will car companies start doing this.

    • Jason

      Car companies have been suing each other for decades. Did you not know that?

      • VAVA Mk2

        Number one industry with the most patents

  • Forget_you

    Sony should get their name taken out of this law suit somehow since they make android handsets. if they are ok with this I will make sure sony is never purchased by me or anyone I know. Including their tvs, blueray players, tablets, phones, etc..It may not matter to them but I will do my part not to support them. This isn't just google they are going after is basically all oem's who produce android handsets. This is about as anticompetitive as it gets and shows how screwed up our patent system is that it can be abused like this. This will hurt any innovation not encourage or save it. and most of all end up limiting choices for consumers if companies are handicapped from these lawsuits and bs patents that get purchased.

  • sguyx

    "only in usa"

  • goldensnakes

    Part of me feels like Sony is bitter over its failing business.. It makes no sense why they would participate in all that..Considering they started turning around being pro-Android with updates and no bootloader locked phones. Than magically exited the market. I understand the main reason was to make them profitable again.But it still looks shady. I dont understand why the courts don't see this as a form of business bullying. They specially buy patents and than start a patent suit. The main reason was to sue. I understand patent protection against other was the main reason but when something like this happens you have to question it.

  • async2013

    i can seriously see Google completely moving out of the US soon followed by a myriad of other companies and saying a big FU to the corrupt American legal system

  • Akmal Zharif

    im getting bored of this patent war.... it slows down innovation

  • crlo

    Jeremiah.
    Please feel free to elaborate on your education, skills and experience in the realm of patent law. Please use your expertise and connections to elaborate on how "The prognosis for Google and Company isn't good". Finally, please comment on how the patents in suit are valid. You yourself describe them as "broad", and as you will know, "broad" patents rarely survive close scrutiny intact.
    Thanks.