Apple-backed Rockstar Consortium to shed 4,000 patents, end lawsuits in $900M deal

Posted:
in General Discussion edited December 2014
Rockstar Consortium --?the patent holding firm created by Apple, BlackBerry, Ericsson, Microsoft, and Sony to purchase thousands of foundational telecom patents from now-defunct Nortel -- looks set to wind down operations after the partners agreed to sell much of Rockstar's patent portfolio to IP risk mitigation company RPX.

Rockstar Consortium Logo


The sale will see RPX pay some $900 million for more than 4,000 patents, according to the Wall Street Journal. It will include "the bulk" of Rockstar's portfolio, though it remains unclear which patents will be held back and how they will be disposed of.

As part of the agreement, Rockstar will also end all ongoing litigation, including suits against South Korean firms Samsung and LG, Taiwan's HTC, and China's Huawei.

RPX is a publicly-traded patent consortium that purchases and licenses patents on behalf of its members --?which include Google and Cisco, among others -- who can then leverage the portfolio to defend themselves against infringement allegations. RPX has pledged not to use the cache for offensive action.

"This is the biggest syndicate of its kind and its formation proves that companies can actually collaborate in...cooperative licensing at scale," RPX CEO John Amster said in a statement to the Journal.

Rockstar's partners paid $4.5 billion for over 6,000 Nortel patents in 2011, divvying up 2,000 of the most important patents among themselves and leaving Rockstar to work out licensing deals for the remainder. The patents assigned directly to the partners are not included in the sale to RPX.
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Comments

  • Reply 1 of 39

    Total nonsense.

  • Reply 2 of 39

    Agreed.  It's time for some major reforms in patent law.

  • Reply 3 of 39
    So if RPX is purchasing them, are they essentially a patent troll company? I don't get the benefit of them purchasing the bulk of these patents. Are they purchasing them to police others and manage the licensing of said patents? Can someone explain to me their pledge of "not using the cache for offensive action"... I mean... for them to spend 900 million on this and it just sit there doesn't seem right. I shake my head at all this... I'm a pretty smart guy, but I don't understand a lot of the passing back and forth of these patents for the ungodly amount of money just to sit on it. I assume in the end its all about litigation protection? Meanwhile, I would really enjoy a few grand to furnish my new apartment. lol.
  • Reply 4 of 39
    Ugh!
  • Reply 5 of 39
    normmnormm Posts: 534member
    It seems like a great thing that tech companies can cooperate to try to defend themselves from uncertainty and risk from patents without waiting for government action. But Apple would probably benefit more than any other big tech company from simply getting rid of patents altogether, since they're already pretty good at using secrecy to get a big first mover advantage. You'd have to legislate "no new patents" after some date, though, and just live with the old ones until they expire: it wouldn't be fair to simply declare trillions of dollars of existing patent assets as worthless, and that would cause too much resistance to the change. Not sure what to do about pharmaceutical patents.
  • Reply 6 of 39
    jungmarkjungmark Posts: 6,633member
    I don't get it. Why spend 4.5 billion if you sell the majority for 900mm?
  • Reply 7 of 39
    jungmark wrote: »
    I don't get it. Why spend 4.5 billion if you sell the majority for 900mm?

    Maybe the ones they are keeping are worth > $3.6 billion.
  • Reply 8 of 39
    Quote:
    Originally Posted by jungmark View Post



    I don't get it. Why spend 4.5 billion if you sell the majority for 900mm?

     

    From the article:

     

    "Rockstar's partners paid $4.5 billion for over 6,000 Nortel patents in 2011, divvying up 2,000 of the most important patents among themselves and leaving Rockstar to work out licensing deals for the remainder."

     

    I don't think they're losing any money/value from this deal. They got what they were most interested in and are recovering money from the ones they don't need.

  • Reply 9 of 39
    irnchrizirnchriz Posts: 1,573member
    So if RPX is purchasing them, are they essentially a patent troll company? I don't get the benefit of them purchasing the bulk of these patents. Are they purchasing them to police others and manage the licensing of said patents? Can someone explain to me their pledge of "not using the cache for offensive action"... I mean... for them to spend 900 million on this and it just sit there doesn't seem right. I shake my head at all this... I'm a pretty smart guy, but I don't understand a lot of the passing back and forth of these patents for the ungodly amount of money just to sit on it. I assume in the end its all about litigation protection? Meanwhile, I would really enjoy a few grand to furnish my new apartment. lol.

    It protects the interests of its members by holding and managing these patents to defend against trolls.
  • Reply 10 of 39
    gatorguygatorguy Posts: 19,816member
    So if RPX is purchasing them, are they essentially a patent troll company? I don't get the benefit of them purchasing the bulk of these patents.

    RPX is certainly no patent troll. They're one of the few patent aggregators pledging to never offensively assert a single one of the patents they control. This is a good thing.
    http://www.rpxcorp.com/
  • Reply 11 of 39
    Quote:

    Originally Posted by Gatorguy View Post





    RPX is certainly no patent troll. They're one of the few patent aggregators pledging to never offensively assert a single one of the patents they control. This is a good thing.

    http://www.rpxcorp.com/

     

    Then they are wimps. If you own a patent and someone is infringing, then you have every right both legally and morally to go after them for royalties.

     

    What you don't have a right to do is typical patent troll activities like filing lawsuits without first trying to negotiate in good faith, filing lawsuits without properly identifying which products infringe which patents (and providing a detailed analysis of how they infringe), sending demand letters hoping to get quick payouts without ever going to court and so on.

     

    What does RPX do if a member company assigns patents to RPX in exchange for access to the entire portfolio, then saw a non-member company start using those patents without permission? Are they really going to stand by and let someone use their IP for free?

     

    If so, then what's the benefit of even joining RPX? Just find out what patents they hold and start using them for FREE, since RPX won't ever go after you for using them.

  • Reply 12 of 39
    gatorguygatorguy Posts: 19,816member


    If so, then what's the benefit of even joining RPX? Just find out what patents they hold and start using them for FREE, since RPX won't ever go after you for using them.

    Correct. They won't go after you for using one of them according to their website. Having the right to litigate a patent certainly doesn't make it an obligation to do so does it?

    I gave you a link earlier if you had any interest in understanding their business plan and the benefits of joining. Recognize any of the names on this list? They seem to feel it's worthwhile.
    http://www.rpxcorp.com/rpx-membership/rpx-client-network/
  • Reply 13 of 39
    malaxmalax Posts: 1,598member

    Interesting.  They are basically doubling in size as a result of this single transaction:

     

    http://www.rpxcorp.com/rpx-services/rpx-sell-your-patent/

     

    "RPX is one of the leading buyers in the patent market. Since 2008, we have invested more than $890 million to acquire more than 4,900 US and international patent assets..."

     

    "Transaction Size: Our transactions to date have ranged from acquisitions of individual patents to acquisitions of portfolios consisting of dozens of patents. Valuations have ranged from tens of thousands to tens of millions of dollars."

  • Reply 14 of 39
    malaxmalax Posts: 1,598member
    Quote:

    Originally Posted by EricTheHalfBee View Post

     

    If so, then what's the benefit of even joining RPX? Just find out what patents they hold and start using them for FREE, since RPX won't ever go after you for using them.


     

    Excellent question.  Here's part of their answer:


    Quote:



    Not all high-threat assets are available or can be acquired on the open market, but even when a patent is in litigation, RPX can have a positive impact. Our trusted role in the market allows us to negotiate with NPEs on behalf of our clients (individual defendants can rarely negotiate favorable terms unilaterally), acquire rights to the litigated patent, and achieve an early and cost-effective dismissal for RPX members in the lawsuit.


     


    As of June 30, 2014, RPX had successfully negotiated more than 575 litigation dismissals from 74 litigations.



     

    It does appear that patent they acquire are essentially in the public domain (at least as a practical matter).

  • Reply 15 of 39
    Quote:

    Originally Posted by Gatorguy View Post





    Correct. They won't go after you for using one of them according to their website. Having the right to litigate a patent certainly doesn't make it an obligation to do so does it?



    I gave you a link earlier if you had any interest in understanding their business plan and the benefits of joining. Recognize any of the names on this list? They seem to feel it's worthwhile.

    http://www.rpxcorp.com/rpx-membership/rpx-client-network/

     

    I read up on their business model on their website. It still doesn't answer my question.

     

    Why pay a subscription fee (which is their business model and method of earning revenues) to RPX to get access to their patents when you could just use them for FREE? Why pay for something that you can apparently use without fear of litigation?

  • Reply 16 of 39
    chris_cachris_ca Posts: 2,543member
    Quote:



    Originally Posted by jungmark View Post



    I don't get it. Why spend 4.5 billion if you sell the majority for 900mm?

    Perhaps the patents they are selling, the Rockstar companies get to keep a license for (no fees)?

    If RPX wishes to license them elsewhere, they can but Apple, Sony, MS, et al.  are free & clear to use them.

  • Reply 17 of 39
    gqbgqb Posts: 1,934member
    The reading comprehension level on this forum is astounding.
  • Reply 18 of 39
    Originally Posted by GQB View Post

    The reading comprehension level on this forum is astounding.



    So why not tell who’s wrong what’s wrong.

  • Reply 19 of 39
    Quote:

    Originally Posted by Tallest Skil View Post

     
    Originally Posted by GQB View Post

    The reading comprehension level on this forum is astounding.



    So why not tell who’s wrong what’s wrong.


    Isn't it fairly obvious?!

  • Reply 20 of 39
    droidftwdroidftw Posts: 1,009member
    Quote:
    Originally Posted by Tallest Skil View Post

     
    Quote:
    Originally Posted by GQB View Post



    The reading comprehension level on this forum is astounding.

     

    So why not tell who’s wrong what’s wrong.


     

    The irony is almost too much!  <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

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