The consortium comprising leading tech majors is the big business equivalent of your average patent troll
In recent years, two themes have dominated technology headlines: glitzy announcements on incremental innovations to gadget design and technology, and in near equal measure, the courtroom drama surrounding these. Business deals, acquisitions and mergers announced with frequent regularity have more to do with patents than economics, with tech majors treating them as ammunition stockpiles that can either deter others from innovating by charging exorbitant licence fees and suing those who fail to do so.
In a fresh salvo this week, Rockstar — a consortium comprising leading technology majors Apple, Microsoft, Research in Motion, Sony and Ericsson — filed a patent infringement suit against Google and seven global hardware makers. These seven hardware firms have one thing in common: they are all part of the extended Android family, which is giving Apple’s iPhones and Windows phones a good run for their money.
For the Rockstar consortium, it’s payback for the cool $ 4.5 billion it paid in exchange for a plethora of patents — mostly from the wireless, 4G/LTE portfolio — owned by beleaguered Canadian telecom major Nortel, outbidding Google. Not to be left behind, Google went ahead and acquired Motorola for it’s wireless profile, a buy that’s yet to reap the desired benefits despite adding vital wireless licences to its kitty.
Rockstar’s youthful name indeed belies its disruptive missive. No mean grouping, Rockstar is the big business equivalent of your average patent troll. Much like trolls, the purpose of the group (which is reportedly staffed with lawyers and engineers) is to investigate tech products for patent infringements and file lawsuits. Rockstar, registered as a company, doesn’t make anything itself and so can’t be sued; a chunk of the Nortel patents it acquired is officially owned by individual companies that are part of the consortium. Tech and IPR commentators have called this the new face of patent trolling, one that has clearly changed the technology patent battle space.
What’s at stake?
At stake in these rounds, are two key groups of patents: firstly, a patent that hits at Google’s core search engine functionalities, and secondly, seven law suits that accuse hardware makers of infringing seven patents related to graphic interfaces, notifications and messages. While the first deals with technology that maps search queries with advertising — the technology that lies at the core of the free search engine’s business model — and tech algorithms that Google built on while creating its massive search capabilities, the latter is evidently an aggressive proxy war against Android.
The ‘mapping’ technology could also impact Google’s revenue model with Android, where it gives away the operating system for free, and much like it does with the search engine, and makes money using advertising. As for the OEMs, if companies have to start paying licensing fees for Android, the open operating system’s USP collapses and the OEMs own margins shrink. This, experts speculate, could also have an impact on Android’s “affordability factor” and could be antithetical to consumer welfare.
Tech pundits have pointed out that the real battle here is about Android, Google’s own ‘rockstar’ operating system which, over a couple of years, has had a disruptive effect in the smartphone market. Apple founder Steve Jobs once famously confessed that he wanted to destroy Android and would “spend all of Apple’s earnings” and his dying breath to win that war. In his biography, he is quoted as saying that he is “willing to go thermonuclear war” to destroy Android as “it is a stolen product”.
Today, over a year after his passing away, Android continues to gobble up more of the smartphone market and eats into Apple’s own revenues.
Last quarter, the OS reportedly crossed the 80 per cent mark when it came to global smartphone shipments. In the devices market, research firms have found that South Korean major Samsung’s Android phones are doing well, increasing its lead in the market, even as Apple has been clocking a decline.
Others in the line of attack are Asus (which manufactures Nexus 7), and ZTE, LG and Huawei that are all major Android phone vendors. Patents against Google’s hardware partners include tech involving a navigation tool, Internet protocol filter, integrated message center, call tracing and managing a virtual private network. In addition to this is a vital patent on “electronic package carrying an electronic component and assembly of motherboard and electronic package”, states a detailed post on FOSSpatents.com, a popular IPR blog that covers software patent news.
Explaining the logic behind the full frontal attack on manufacturers in a post, software patent expert Florian Muller writes that most of the infringement allegations are limited to “mobile communication devices having a version (or an adaption thereof) of Android operating system”.
This, he says, shows that Google’s intellectual property strategy 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 licence from Rockstar.”