Google’s Android operating system is found in about three-quarters of smartphones, IDC reports, so the related technology involves massive amounts of money. Therefore, any attempt to challenge its relevant patents by rival tech companies has to be taken seriously. That is why a new lawsuit is so important.
Rockstar Consortium, a self-described intellectual property licensing company, has filed lawsuits against Google – as well as Asus, HTC, Huawei, LG Electronics, Pantech, Samsung, and ZTE – each of which is a hardware maker that uses the Android operating system. It may seem a rather routine claim of patent infringement except for a few facts.
Rockstar Consortium is owned by such large companies as Apple, Microsoft, BlackBerry, Ericsson, and Sony. Also, many sector observers see this action targeted against Google and its Android operating system. Google gives away Android OS in exchange for the right to show ads in its search results. The suit – focused on seven patents – claims Google is guilty of patent infringement when it matches search terms to ads.
Google would be significantly hurt if it could not collect related revenue. Also, original equipment manufacturers using the Android OS could end up paying out much more in licensing fees if the lawsuit is successful. For instance, these companies already will pay Microsoft $8.8 billion a year by 2017 in royalties. It is also possible the lawsuit could force Android mobile products from being sold in the United States – which could be a huge financial hit for the companies using the technology as well as Google.
The specific disagreement can be traced to the birth of Rockstar in 2011. Rockstar acquired its patent portfolio from Nortel, during its bankruptcy process, for $4.5 billion. Google lost out on the 4,000 patents because it would not go higher than $4.4 billion in a bid.
Google was definitely interested in acquiring new patents – given that it has since paid $12.5 billion for Motorola’s approximately 17,000 mobile technology patents.
News reports have described the Rockstar Consortium as a “patent troll” or in politer terms a “non-practicing entity” because it was set up to acquire or sell patents – rather than introduce its own products. “And while it [Rockstar] has been quiet for the past couple of years, it seems that it has been spending that time reverse-engineering Android devices with the express intent of finding patent violations,” ZDNet said.
In addition, the lawsuit was filed in East Texas federal court last month. The selected court district is seen as a more friendly location for plaintiffs than some other court districts. The lawsuits may take several years of legal battle before a settlement or a verdict is reached, according to Read Write. The total cash amounts involved could be huge – because of the widespread use of the disputed technology.
"Pretty much anybody out there is infringing," Rockstar CEO John Veschi told Wired last year. "It would be hard for me to envision that there are high-tech companies out there that don't use some of the patents in our portfolio."
ZDNet also reports that this new set of lawsuits could be the all-out war to destroy the Android operating system once-prophesized by Apple founder CEO Steve Jobs.
Meanwhile, the entire tech sector is watching the new lawsuits carefully. Results of the case could impact its future for years to come.
Edited by
Alisen Downey