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Google, Rockstar Patent Fight Stays in California
Google, Rockstar Patent Fight Stays in California

By Seth Fitzgerald
April 18, 2014 1:00PM

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A U.S. district judge has decided that the Apple-backed Rockstar Consortium's patent lawsuit against Google will stay in California and not move to Texas. The reason: Rockstar played fast and loose with the rules, setting up a "sham" company in Texas to allow Rockstar to move its patent lawsuit against Google to a friendlier jurisdiction.
 

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A U.S. district judge has ruled in favor of Google by deciding that the Apple-backed Rockstar Consortium will have to fight its legal battles in California rather than Texas. Rockstar filed a lawsuit against Google and other Android phone companies last October. Since patent holders have a better track record of winning cases in Texas, Rockstar created a co-plaintiff, MobileStar Technologies in Plano, Texas, so that it could file the lawsuit there.

The seven patents involved in the lawsuit have allegedly been infringed upon by Google’s search and advertising business, which then brings other Android device manufacturers into the mix as they rely on Google’s services.

Last month, the two companies made their arguments regarding the venue dispute. Google lawyer Matthew Warren made the argument that because Apple contributed the most cash to buying the Nortel patents, the lawsuit should take place in Apple’s state, California.

A Strong Link

U.S. District Judge Claudia Wilken ruled almost entirely in Google’s favor because of a link between Rockstar and Apple that she feels cannot be ignored. Apple contributed $2.6 of the $4.5 billion needed to buy the patents and also received more than half of those patents when the sale occurred. As a result, Wilken ruled that the majority of Rockstar is actually controlled by Apple and the lawsuit should be handled as such, even if they are technically separate companies.

The bid to move the case to Texas was justified by Rockstar because its co-plaintiff, MobileStar, claims Texas as its primary business location. However, given the evidence, Wilken views MobileStar as a “sham” company that exists simply to provide Rockstar with a way to have the case moved to a friendlier jurisdiction.

“The circumstances here strongly suggest that Rockstar formed MobileStar as a sham entity for the sole purpose of avoiding jurisdiction in all other fora except MobileStar’s state of incorporation (Delaware) and claimed principal place of business (Texas),” wrote Wilken. “A mere day before it initiated litigation against Google’s customers, Rockstar freshly minted MobileStar, with no California contacts, and assigned the asserted patents to that subsidiary.”

The Real Case

Now that the venue dispute has been settled, the actual patent lawsuit can begin. As with most patent lawsuits that have taken place in the technology industry, many view the patents in question as “standard-essential," which means that the protected ideas are not unique and must be used by other members of the industry.

We caught up with John Allison, Professor of Intellectual Property at the University of Texas, to get his opinion on standard-essential patents and reforming the patent system as a whole. He told us that it is difficult to determine the true breadth of any given patent but that he has supported The Innovation Act, a bill that fights back against so-called patent trolls.

“You can’t determine the breadth of a patent just by looking at its title, the abstract, or even the preamble to a claim. You must study the precise language of the claims to determine what limitations are placed on the initial broad language,” said Allison. “The question is what does 'reform' mean? Such a complex system must be changed only with great care.”

Rockstar, as the plaintiff in the case, could attempt to settle in a variety of ways by either setting up patent licensing deals, requesting a cash settlement, or seeking a sales ban against certain devices.
 

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