It is commonly said in the field of economics that gold is the only constant in the physical world, at least in terms of value, when times are hard, buy gold to stay safe. If this is the case for traditional industry, then in the R&D focused world of technology, the patent is its closest equivalent. The world of tech is squarely focused on innovation, for its players are well aware that if they fail to keep up with the rest then, for lack of a better term, they become Yahoo!.
Those that succeed however, reap the benefits, or at least those who own the patents do. As is well publicized, Microsoft make a small sum of money from the sale of every Android phone, given that they have a patent for some of the technology behind it, something Samsung unsuccessfully attempted to challenge earlier in the year. This strange situation has led to an unusual practice, mostly unseen outside of the tech world, the patent super-group. Collecting patents from a number of companies, these groups over time gain significant power, and rather undue influence in the wider world.
One of the biggest, and certainly one of the most powerful of these groups is the Rockstar Consortium, a group formed by Apple, Blackberry, Ericsson, Microsoft and Sony in the wake of the Nortel bankruptcy, purchasing 6,000 patents in total. However, in a recent turn, RPX Corporation, a worldwide provider of risk-management services, is to purchase a portfolio of 4,000 patents from Rockstar Consortium, for a total sum of $980,000,000. Upon the purchase being approved, the patents will be made available to all interested parties under non-discriminatory terms.
Erich Andersen, Vice President and Deputy General Consul of Microsoft stated:
“Today’s announcement is good news for our industry as it demonstrates our patent system working to promote innovation. We joined Rockstar to ensure that both Microsoft and our industry would have broad access to the Nortel patent portfolio, and we’re pleased to have accomplished that goal through this sale and our valuable license to the patents being sold.”
The decision to purchase the Nortel patent portfolio through a consortium was originally taken in order to prevent a third-party from having enormous influence over the smartphone market, able to take a massive tithe from all players involved. As such, the decision to offload the portfolio indicates not only a possible thawing of relations between various firms, but the changed state in which the market finds itself. Hopefully the addition of RSX Corporation to the game will ensure competitiveness, allowing firms like Samsung to compete on an even level.
Moreover, it is to be hoped that this will not lead to the kind of situation that the consortium was originally formed to prevent. The smartphone market already houses the potential for one firm to become completely dominant, an arrangement that would only be to the detriment to the end user, for even a worthy monopoly becomes monolithic in time.
What do you think of this deal? Let us know in the comments below.