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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

December 23, 2014 at 12:08 PM

Apple, Microsoft-backed patent group cashes out as legal wrangling cools

The battle over smartphone patents continues to migrate from the courtroom to whatever room licenses are negotiated in.

The Rockstar Consortium, an Apple-led group formed in 2011 to buy Nortel Networks’ patents, will sell the bulk of those to RPX, a patent clearinghouse that acquires the rights to intellectual property to license to its members. RPX plans in turn to license those patents to a group of more than 30 companies, including Cisco and Google.

Rockstar, which in addition to Apple includes Microsoft, BlackBerry and Sony, spent $4.5 billion for the 6,000 patents auctioned by bankrupt Canadian telecom giant Nortel. Rockstar transferred about 2,000 of those patents to individual consortium companies, and spent the years since then licensing the remaining set to the wider tech world and taking to court those who allegedly used the technology without properly paying for it.

That hefty price tag Rockstar originally paid kept the patents out of Google’s hands, and also beat a bid by RPX. (Google memorably offered pi and other mathematical constants in its own attempt to buy the patents)

But the temperature around smartphone litigation has cooled in the past year or so, reflecting a growing realization that forking over reasonably fair fees is cheaper than spending years in court. Apple and Google reached a deal to end their smartphone patent court fight in May. Rockstar, for its part, settled suits with Google and Cisco last month.

In the deal announced on Tuesday, a global consortium “reached a fair value for licensing patent rights in a negotiated business transaction instead of a courtroom,” Cisco General Counsel Mark Chandler said.

Erich Andersen, a deputy general counsel at Microsoft, said the deal is good news for the industry.

“We 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 and our valuable license to the patents being sold,” Andersen said.

Microsoft hasn’t disclosed its stake in Rockstar. IAM magazine dug into the corporate filings, finding Apple led the group, putting in $2.6 billion of the $4.5 billion total. Research In Motion (now BlackBerry) shelled out $770 million, and Ericsson $340 million. That leaves about $900 million in combined investment by Microsoft, Sony and EMC.

Comments | More in Intellectual property | Topics: apple, google, microsoft


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