Apple And Microsoft Behind Patent Troll Armed With Thousands Of Nortel Patents

from the just-great... dept

You may recall last summer that Apple, Microsoft, EMC, RIM, Ericsson and Sony all teamed up to buy Nortel’s patents for $4.5 billion. They beat out a team of Google and Intel who bid a bit less. While there was some antitrust scrutiny over the deal, it was dropped and the purchase went through. Apparently, the new owners picked off a bunch of patents to transfer to themselves… and then all (minus EMC, who, one hopes, was horrified by the plans) decided to support a massive new patent troll armed with the remaining 4,000 patents. The company is called Rockstar Consortium, and it’s run by the folks who used to run Nortel’s patent licensing program anyway — but now employs people whose job it is to just find other companies to threaten:

But Widdowson is a specialist. He’s one of 10 reverse-engineers working full time for a stealthy company funded by some of the biggest names in technology: Apple, Microsoft, Research In Motion, Sony, and Ericsson. Called the Rockstar Consortium, the 32-person outfit has a single-minded mission: It examines successful products, like routers and smartphones, and it tries to find proof that these products infringe on a portfolio of over 4,000 technology patents once owned by one of the world’s largest telecommunications companies.

When a Rockstar engineer uncovers evidence of infringement, the company documents it, contacts the manufacturer, and demands licensing fees for the patents in question. The demand is backed by the implicit threat of a patent lawsuit in federal court. Eight of the company’s staff are lawyers. In the last two months, Rockstar has started negotiations with as many as 100 potential licensees. And with control of a patent portfolio covering core wireless communications technologies such as LTE (Long Term Evolution) and 3G, there is literally no end in sight.

The article admits that Nortel got most of these patents because it wanted them for “defensive” reasons. And now look at how they’re being used. Remember that the next time you hear a company promise to only use its patents defensively. There’s also a ridiculous quote from Rockstar’s CEO, John Veschi:

“A lot of people are still surprised to see the quality and the diversity of the IP that was in Nortel,” he says. “And the fundamental question comes back: ‘How the hell did you guys go bankrupt? Why weren’t you Google? Why weren’t you Facebook? Why weren’t you all these things, because you guys actually had the ideas for these business models before they did?’”

The real answer, of course, is because patents are meaningless. Ideas are worth nothing by themselves. Ideas only matter if you execute, and anyone who’s ever actually executed on an idea will tell you that the original idea almost is never reflected in the final product. The process of going from idea to actual product is a process by which you learn that what matters is not what you thought mattered. And yet, for reasons that make no sense to anyone who has ever actually built a product, creating monopolies around the ideas only serves to create a massive tollbooth towards actual innovation. And that’s what we have here — and it’s funded by Apple and Microsoft.

Once again, we see that these two large companies are using the patent system not to innovate, but to stop up and coming competitors from innovating. The patent system isn’t being used to encourage innovation but to protect incumbents from an open market.

Oh, and worst of all, the reason that the antitrust effort was dropped was because Apple and Microsoft promised to license the key patents under “reasonable terms.” But… Rockstar is not subject to that agreement.

But the new company — Rockstar Consortium — isn’t bound by the promises that its member companies made, according to Veschi. “We are separate,” he says. “That does not apply to us.”

That seems quite problematic, and perhaps worthwhile for the government to reopen its investigation…

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Companies: apple, emc, ericsson, google, intel, microsoft, nortel, rim, rockstar consortium, sony

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Comments on “Apple And Microsoft Behind Patent Troll Armed With Thousands Of Nortel Patents”

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74 Comments
Anonymous Coward says:

Re: Poor Engineers

From the article:

Former coworkers might have found this a little strange, but it turned out that Widdowson liked the work he was doing. The mesh of the legal and technical work was a new challenge for him, but there was another reason he stuck with it. He felt like he was helping his former Nortel colleagues who were hurting because of the bankruptcy.

So any sympathy is misplaced.

Zakida Paul says:

I have sworn off Apple, MS will be much harder

The only Apple product I have and will ever have is my iPod Classic. They are pretty easy to avoid but M$ is impossible to avoid. I have been wanting to make a complete switch to Ubuntu for years but I love playing Football Manager and Netflix so much that I have to keep my dual boot set up.

anon says:

What a shame!!

Google managed to create an os that people want to use they created phones that are outselling the supposedly amazing apple and the failure that is windows phone. I think Google made a mistake in not getting the patents when they were up for offer. they could have stopped Apple and MS from ever bothering them again. Now they will have no option but to pay whoever billions of dollars just because they might have used a few lines of code they did not create themselves. Well, with the power google has i suspect they have a few retaliations they could choose from and we should see them in the not too distant future. But seriously is someone asleep at the wheel here , this is going to end in an almighty mess if it is not sorted out soon.

ltlw0lf (profile) says:

He's one of 10 reverse-engineers

Freelance nautical robbery is referred to as piracy, while “for hire” nautical robbery is privateering.

Both could theoretically get you executed. Privateering was a little less risky so long as you didn’t take out the ships of the country you were hired by or countries that weren’t at war with that country. William Kidd was hanged for taking out English ships.

The same could be true for freelance assassins vs state assassins, freelance gun runners and the Department of Homeland Security, etc. I like it though…now I can go into my boss and demand a pay raise because I am a freelance reverse-engineer.

Reverse-engineering is still very much a gray area in the law…it usually is legal unless you violate the law, and there is a minefield of laws that could be violated.

tdj says:

Poor Engineers

This is exactly what Apple is attempting to do to Kodak. Apple had a “temporary” legal victory on 5/21/12 with the ITC, but I honestly believe, this will be a patent battle that Apple will loose. It was already concluded by the USOP that Apple, RIMM, Samsung (who is now paying licensing fees to Kodak) and many other phone makers that use digital cameras infringed on at least one of the patents that Kodak is suing over back in 2010. Apples evil plan to stop Kodaks Chapter 11 reorganization by selling 1100 of its patents will not work. Looks like the giants philosophy is “We’ll Just tie it up in court”!

I believe Apple plans a backdoor/basement deal to acquire the 1100+ Kodak patents for almost nothing. Apple actually has the nerve to say that the patent in question is theirs….lmao!

Worthless Maggots!!!!

Anonymous Coward says:

Re: Re: Poor Engineers

Wait, whoa! When did IBM turn into saints? Are you sure your memory isn’t a little short?

Any sufficiently large corporation, given financial incentive, will eventually act in an evil manner to protect its potential gains. This is why corporations should not be considered people. As we do with war crimes, individuals should be held responsible for their actions, rather than hand-waving that they’re responsible to some giant, nebulous, and unaware category of people called “shareholders” (or in the case of war crimes, “my country”).

orbitalinsertion (profile) says:

He’s one of 10 reverse-engineers working full time for a stealthy company funded by some of the biggest names in technology… It examines successful products, like routers and smartphones…

So the “thou shalt not reverse engineer, etc.,” clauses these corporations are all so fond of are not binding upon themselves and unworthy of being respected. Once again, they are above the law and their own sets of rules. Oh well, they didn’t obey those rules when they were young, either.

John Fenderson (profile) says:

He's one of 10 reverse-engineers

Which come to think of it aren’t their “reverse-engineers” actually breaking the law with what they are doing?

Reverse engineering is a practice that has been upheld as legal numerous times in the courts. It is not illegal, and is a common and accepted practice in the industry.

They could conceivably, however, run afoul of the DMCA’s anti-circumvention rule.

GMacGuffin says:

Rockstar not bound by reasonable license?...

…the reason that the antitrust effort was dropped was because Apple and Microsoft promised to license the key patents under “reasonable terms.” But… Rockstar is not subject to that agreement.

This is either complete hogwash, of fully disingenuous, contract-law speaking. Usually a contract will say that it flows to agents; if not, the law will generally hold the principal liable for agents’ acts; and mostly, the law don’t like folks trying to do an end-run around the clear intent of an agreement.

Seems MS & Co. would have a hard time legally proving “we agreed to reasonable licencing terms, but those working for us on the very subject of the agreement are not bound by its terms.” Bull…

DogBreath says:

Re:

Well, the secret interpretation of: “To Promote the Progress of Science and the Useful Arts” is now :”To Crush the Little Guy and Increase the Income of Patent Trolls and the Bank Accounts they keep”.

Please don’t tell anyone about this, after all it IS a secret interpretation and we can’t let just any of the off the street riffraff know about it. Oh… I’m on the internet… live??? Then, in the immortal word of Emily Litela: “Nevermind“.

DannyB (profile) says:

What a shame!!

> I think Google made a mistake in not getting the
> patents when they were up for offer.

If these are the patents I’m thinking of, Google DID try to get them. Google made a huge bid. Google wanted to use them defensively against the bad guys who were already using patents against various Google partners.

Because these patents would have represented a useful defense against patent aggressors, the bad guys got together and collectively outbid Google. That is how the bad guys (eg, Apple, Microsoft, etc) got these patents.

John Fenderson (profile) says:

How is this legal?

Why does this troll get to do it, but normal people can’t (at least not legally)?

First, an important bit of nitpickiness — if something is contractually prohibited, such as in a EULA, that does not make it an illegal action. It makes it a contract violation, which is a civil, not criminal matter. The majority of the time, EULA’s aren’t really enforced. The cost/benefit of actually suing someone for breaking them is not often favorable. From a company’s point of view, the value of the EULA is more to shield themselves from legal action more than to provide a means of taking legal action against others.

Beyond that, EULA’s are incredibly easy to get around. For example, they do not bind anyone not party to the transaction. If I pick the thing up secondhand or get it as a gift, the EULA does not apply to me.

Anonymous Coward says:

That seems quite problematic, and perhaps worthwhile for the government to reopen its investigation…

Now why would they do that? With startups strangled by absurd patent thickets, business will keep going overseas. Then they’ll be able to keep getting votes by grandstanding about China stealing jobs. Plus, since the economy will stay bad, they’ll be able to keep passing off their power grabs as “jobs bills”.
Politics is like medicine. There’s more money in keeping patients sick than there is in making them healthy.

Anonymous Coward says:

Turn his own quotes around...

So, this Rockstar Consortium – they could become Facebook or Google now because they own the patents right?

I mean, if having the patents is what it takes to become the business model they describe, then we should see all these patent trolls becoming the companies that they claim have infringed on their business models and innovations.

ltlw0lf (profile) says:

Re:

That’s when Hogwart’s patents expire?

Wikipedia Entry on Shadowrun

I am going from years’ old memory on this but I played Shadowrun back in the late 80s and early 90s, and the story goes that on the end of the Mayan Long Count, December 20th, 2012, latent and forgotten capabilities of Magic in the human genome all-the-sudden turn back on in a large group of humans. Thus, in 7 months, if the world portrayed in the game is the same as this world, we all get some form of magic back. And dragons return. And people turn into Orcs, Trolls, Goblins, and we start having Elves and Dwarves as children, and everything. It was a modern urban fantasy. Fun game too.

ltlw0lf (profile) says:

He's one of 10 reverse-engineers

Isn’t that how all laws work?

True. True.

What I meant is that so long as you don’t decrypt someone’s ROT13 encoded copyrighted media (DMCA) or violate some trademark or patent, or stuff like that, you’re ok. Clean-room reverse-engineering is the best, but there is also other just as legal though more grey methods of reverse-engineering.

ltlw0lf (profile) says:

He's one of 10 reverse-engineers

How can this possibly be legal? You are deliberately compromising the security of software to derive “infringement” of patents you didn’t devise.

I kinda gathered from reading the summary and the article that they didn’t compromise the security in as much as they bought the product, learned how to use it from the tech manuals, and used a logic probe to figure out what it actually did, and then sat down with the lawyers and figured out which of their patents it violated.

It is really sad, and a waste of good engineers, but something tells me that these guys probably weren’t good engineers to begin with. I might be wrong, I often am, but as an engineer, sitting down all the time and talking to lawyers and not creating or working on products or making other people’s lives worthwhile or better isn’t my idea of a worthwhile engineering pursuit.

John Fenderson (profile) says:

He's one of 10 reverse-engineers

It is really sad, and a waste of good engineers, but something tells me that these guys probably weren’t good engineers to begin with.

This.

Most engineers want to do actual engineering, not this sort of thing. An engineer who does this for a living is one who can’t get a real engineering job. There are some reasons why a competent engineer might not be able to land a real job, but it seems much more likely that they just aren’t very good engineers.

ltlw0lf (profile) says:

Re:

iirc the Year of Chaos was 2011

Your definitely bringing me back. I seem to remember there being a huge quake that broke up a bunch of states, and there was a Northern California (which became the California Free State) and Southern California (which parts became Azteca,) with Northern California having a President, and Southern California being a wasteland with no center of power. At the time I was playing, I lived in Northern California, so most of the games took place there in the California Free State.

I don’t remember Snake Plissken as part of the game though.

Anonymous Coward says:

Re:

Or perhaps you’ve made the fundamental error of mis-defining ‘Science” and “Useful Arts”…

If you’re science is building a market where you are the only competitor and Useful Arts are convincing people to continue buying an inferior product instead of something better just because was made first.

Setting parameters properly makes all the difference…

Thomas (profile) says:

Just goes to show..

that patents are there only to stop innovation. It is all but impossible to design, build, or program anything these days due to patents, and lots of patents conflict in different countries. patents benefit only lawyers and the businesses that hold them. The big businesses simply have so much fighting each other! They absolutely want to block all new players to the game. It’s sort of like a monopoly – if you aren’t here now you can’t join the party.

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