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Rockstar vs. Google: Software patents as a license for privateering

op:

Rockstar, a consortium of companies formed to collect certain patents put on sale in the dissolution procedure of Nortel, has sued Google and other companies over seven of those patents.

FSFE voiced serious concerns and warned competition regulators against exactly such a scenario in December 2011. Previously, the US Department of Justice had imposed limits on another, similar transaction: The buyers software company Novell's patent portfolio had to accept limits on the things they could do with the those patents. In particular, they were prevented from using them against Free Software.

But when Rockstar bought Nortel's patent, things were different. Whatever promises, if any, the US competition regulators managed to extract from the companies that make up Rockstar - Microsoft, Apple, RIM, Ericsson, and Sony - are clearly ineffective. Rockstar's CEO is even reported as publicly stating that he does not feel bound by any such commitments. The result is an entirely predictable lawsuit where a proxy company is using generic, overbroad patents in order to harm a competitor.

"Patents on software are a dangerous business risk at the best of times," says Carlo Piana, FSFE's General Counsel. "In highly competitive markets like the one for mobile devices, they are essentially a license for privateering."

This case highlights the need for regulators to monitor patent transactions tightly, and analyse their consequences carefully. Lawsuits such as this strangle innovation and impose a private tax on productive companies.