Rockstar, a patent consortium owned by Apple (NASDAQ: AAPL), Microsoft (NASDAQ:MSFT), Ericsson (NASDAQ:ERIC), Sony, EMC and BlackBerry (NASDAQ:BBRY), paid $4.5 billion for the 6,000 patents that bankrupt Nortel Networks offered up for auction in 2011. And while the majority of the portfolio's patents have still not expired, there will be a surge in patent expirations starting in 2017, according to a new independent analysis of Rockstar's patents.
The analysis was conducted by legal technology consulting firm Elysium Digital and used the firm's new Legion patent analysis tool. The analysis is significant because Rockstar sued Google (NASDAQ: GOOG) and other Android manufacturers last fall, arguing that their products infringed on patents owned by Rockstar. Rockstar is also involved in litigation with Charter Communications (NASDAQ: CHTR), Cable One, the Arris Group, Cisco Systems and others.
Elysium analyzed a snapshot of the U.S. patents and patent applications that made up the Rockstar patent portfolio as of Feb. 21, 2014. The firm's report focuses on the U.S. patents and applications, and includes analysis of current assignments of patent and application assets, areas of technology covered, and timing of patent expiration dates. Elysium based its analysis on public data, including file histories, reassignment data, and patent text provided by the U.S. Patent and Trademark Office.
According to the report, "there will be a significant increase in [patent] expirations beginning in 2017. Expirations will then peak in the years 2019, 2020, and 2021, with more than 400 patents expiring in each of those calendar years."
That could take some of the power away from the consortium over time as the patents expire and Rockstar potentially loses its ability to sue for patent infringement on hundreds of patents. Patents in the Rockstar Portfolio were first issued starting in 1992, Elysium said, and older patents in the Rockstar Portfolio began to expire in 2009.
As would be expected from Nortel's background as a network equipment vendor, the Rockstar portfolio is heavily weighted toward networking and telecommunications patents. Elysium said there is an emphasis on packet routing, flow control, network configuration, and quality of service systems. The analysis found that 30 percent of the patents related to switching and routing; 19 percent relate to telecommunication network techniques and systems; 11 percent relate to optical communications; and 6 percent relate to cellular and mobile communications.
Elysium found that Rockstar Consortium entities, including Rockstar Bidco and Rockstar Consortium US, owned around 61 percent of the granted patents, while Rockstar stakeholders, or individual companies, own the remaining 39 percent of granted patents. Of the companies, Apple holds the most with 27 percent, while Microsoft and BlackBerry controlled 6 percent each.
- see this Elysium post
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