Last year, as everyone familiar with the term "patent auction" is aware, a consortium of Big Tech's heavy hitters (well, except Google) and calling itself Rockstar Bidco paid $4.5 billion for the patent portfolio of Nortel Networks. Where are they now?
Rockstar is still around, but now calling itself the Rockstar Consortium. The company has control of 4,000 of the 6,000 patents and patent applications purchased in the Nortel auction.
32 employees work for Rockstar, some of whom perform reverse engineering - dismantling and examining products in technologies related to the Nortel patents and looking for evidence of infringement. And with a staff that includes several former Nortel employees, such as Rockstar's CEO John Veschi and Nortel's former technical manager, Gillian McColgan, that hasn't been difficult to do.
McColgan told Wired that at pre-bankruptcy Nortel, "A large focus of our patenting efforts...had been trying to identify what our competitors might do, and laying down inventions in those spaces to protect ourselves...We ended up with a large portfolio of patents that are directed toward products and areas of technology that our competitors were working in, where we didn't necessarily have products ourselves."
That strategy helped Nortel build quite a war chest, and Rockstar has contacted as many as 100 potential licensees in the past two months alone.
What makes Rockstar a great deal for its big name co-owners is that the patents it manages don't belong to any one company, and Rockstar itself does not "practice" the patents - so it can take legal action without fear of countersuits. The consortium's members can thus reap the benefits of their patent purchase and make life more difficult for their competitors without becoming a target for more lawsuits themselves.