Cable companies target Rockstar over FRAND obligations
Rockstar Consortium, the patent assertion entity (PAE) backed by companies including Apple and Microsoft, has been hit by another patent lawsuit, this time launched by a group of cable companies.
Charter Communications, WideOpenWest Finance and Suddenlink Communications among other cable television and telecommunications companies, filed the case at the US District Court for the District of Delaware on January 17.
Rockstar formed in 2011 after acquiring patents from defunct Canadian telecommunications company Nortel for $4.5 billion. It claims to own or control more than 4,000 patents.
It recently asserted its patents against Google and seven Android smartphone makers in October 2013, and in December 2013 sued Time Warner via its subsidiary Constellation Technologies.
According to the January 17 complaint, shortly after acquiring the Nortel patents, Rockstar accused Charter et al of infringing large swaths of the portfolio, though did not provide a comprehensive list of which patents were infringed.
“Rockstar was quick to explain that those named patents were provided by way of example, and that each plaintiff should ‘keep in mind that the [named] patents are part of a much larger portfolio,’” the complaint said.
Rockstar’s portfolio contains patents that are standard to the telecommunications industry, Charter said, which it is obligated to license to the industry on fair, reasonable and non-discriminatory (FRAND) terms. According to the complaint, Rockstar agreed to honour Nortel’s commitment to licensing certain patents on a royalty-free basis upon acquiring the portfolio.
However, Charter said that Rockstar had refused to enter into licensing negotiations with itself or its vendors, unless they executed non-disclosure agreements “that are designed to defeat [the] defendants’ obligations to license these patents on [FRAND] terms.”
Charter also accused Rockstar of civil conspiracy, and referred to reports that suggest the PAE plans to sell a large portion of its patent portfolio to non-practising entity Spherix while holding on to the “key patents” involved in lawsuits against Google and other companies.
The plan to sell off standard essential patents to other entities with an active plan to maintain a portion of the revenue stream constitutes an active agreement to seek royalty rates in excess of FRAND in violation of law, the plaintiffs argued.
“These agreements also further Rockstar’s scheme to distort the competitive marketplace through unfair competition,” they added.
Charter et al have asked the court to declare Rockstar’s FRAND patent licensing obligations, and order that Rockstar starts offering FRAND licences to cable companies. It asked the court to find that Rockstar has misused its patents, and that it is liable for entering into an illegal conspiracy.
Neither Rockstar nor Charter responded to WIPR’s requests for comment.
