Another lawyer gets rich. Why we hate patent disputes

Let’s face it; the only constant winners in legal actions are the lawyers. Thanks to the endless wrangles over telecoms-related patents and alleged infringements, there are a lot of rich lawyers out there now. And they’re about to get richer.

Rockstar, the consortium that bought the collection of more than 6,000 Nortel patents for $4.5bn, last week filed numerous patent lawsuits against the companies it outbid in the patent auction back in 2011. According to Reuters, Rockstar is filing for patent infringement in the US District Court in Texas.

The Rockstar group is jointly owned by Apple, Microsoft, BlackBerry, Ericsson and Sony. The companies who lost out in the auction, and who are now being sued, include Google, Samsung, HTC, Huawei and Intel.

Google is apparently accused of infringing seven patents that cover technology that helps match Internet search terms with relevant advertising. In other words, pretty much its core business model.

“Despite losing in its attempt to acquire the patents-in-suit at auction, Google has infringed and continues to infringe,” the Rockstar lawsuit claims. The consortium is seeking increased damages against Google, as it claims Google’s patent infringement is ‘willful’.

The action could be seen as the non-Android community protecting itself against the growing commercial threat of the Google eco-system (except that Sony makes Android phones…). Either that, or the Rockstar companies just don’t like Google, simple as that, and the other companies are getting caught in the crossfire.

Google bid $900 million bid for Nortel’s patents when the former vendor went bankrupt in 2009, and was forced to raise it to $4.4 billion, but to no avail. Google, of course, went on to drop $12.5 billion to buy out Motorola Mobility and its valuable library of patents.

In all honesty, the best the lawyers acting for Rockstar can hope for is a ruling that results in a temporary ban on selling certain products (as has happened previously in the long-running telecoms patent war). Any ruling will then get appealed and band will be overturned, followed by counter-action by the defendants. Meanwhile, a couple of cents will be added to price of smartphones to pay for the whole mess. And so it goes on.

‘Ker-ching’, goes the legal money-making machine. ‘Suckers’, snigger the massed ranks of lawyers, as they trouser their fat fees.

Meanwhile, though still in the world of patents, Nokia announced today that Samsung has extended a patent license agreement between Nokia and Samsung for five years. The agreement would have expired at the end of 2013. The amount of compensation to be paid by Samsung will be settled in a binding arbitration, expected to be concluded during 2015. Nokia will retain its patent portfolio after it sells its Devices and Services business to Microsoft.

“This extension and agreement to arbitrate represent a hallmark of constructive resolution of licensing disputes, and are expected to save significant transaction costs for both parties”, said Paul Melin, Chief Intellectual Property Officer of Nokia.

Well, at least that’s two companies that are sick and tired of wasting legal fees.