Spherix Acquires 100 Rockstar Patents

Spherix Incorporated (NASDAQ: SPEX), a Tysons Corner, Virginia intellectual property monetization company, recently announced that it has entered into a series of agreements with Rockstar Consortium (US) LP in which Spherix Incorporated acquired over 100 patents and patent applications.  The newly acquired patents cover among other things, numerous aspects of access, switching, routing, optical and voice communication network devices.

In addition to the 100 patents/application acquired will complement the Rockstar patents previously acquired by Spherix and will further support Rockstar’s current licensing efforts. Rockstar will also share usage information with Spherix for the transferred patents, and will assist Spherix in working with the patents’ inventors, to assist Spherix’s commercialization efforts.

This is likely a signal of more patent infringement lawsuits yet to come in the growing patent battle by proxy between Google (NASDAQ: GOOG), Samsung, HTC (TPE: 2498) and the companies behind Rockstar, which is a group created by Apple Inc. (NASDAQ: AAPL), Microsoft Corp. (NASDAQ: MSFT), BlackBerry Ltd.(NASDAQ: BBRY), Ericsson AB and Sony Corp. (NYSE: SNE) to acquire patents from Nortel Networks Corp. in 2011.


In November 2013, Florian Mueller of FOSS Patents reported that Rockstar sued over Android as the likely result of failed licensing negotiations. He wrote:

“Apparently the Rockstar Consortium’s efforts to subsequently negotiate patent license deals with Google and the wider Android ecosystem have been unsuccessful because at least eight Rockstar lawsuits were filed in the Eastern District of Texas: separate actions against Google, Samsung, Huawei, ZTE, LG, HTC, Pantech, and ASUSTeK. I don’t know what happened in those negotiations, but maybe Google was a sore loser and tried to defy logic. The simple logic here is, in my view, that if you bid $4.4 billion for a patent portfolio (just not enough to win the auction), you can hardly dispute later that the patent portfolio in question is a treasure trove. And if you want to license a treasure trove, it costs you more than licensing something of little value such as some Motorola patents covering pre-World-War-II-style interlaced video and minor WiFi features.”

Indeed, Google paid $12 billion to acquire Motorola’s patent portfolio and most, including myself, believe that they grossly overpaid. The patent portfolio worth acquiring was the Nortel portfolio. Burnt by so horribly managing the Nortel deal Google paid nearly 3 times the Nortel patent portfolio valuation for an inferior portfolio. Still, after not getting the Nortel portfolio Google had to do something. Google didn’t innovate and needed to acquire some patent portfolio to help insulate them as they entered the smartphone marketplace. If only they had acquired the Nortel portfolio!

In any event, here is what the respective CEOs had to say about this particular 100 patent transaction.

Anthony Hayes, Spherix CEO, stated “This addition of over 100 patents and applications from Rockstar solidifies our relationship with Rockstar and transforms Spherix into one of the most IP rich public companies today.  Based on our analysis arising from our discussions with Rockstar, we believe the portfolio acquired of over 100 patents and patent applications are found in technology used daily by consumers and businesses, as they cover the way traffic, video and voice are carried over public and private networks.  As a company we can not stress enough the value of these assets and the opportunity it presents for all our shareholders and team.”

John Veschi, CEO of Rockstar stated, “We believe this is a very valuable patent portfolio, containing both industry standard patents and patents found in product implementations of various Internet service and network device vendors throughout the world.  To assist in the effective commercialization of the over 4,000 patents owned by Rockstar, we are excited to be working with Spherix on this transaction while we continue to directly commercialize the balance of our portfolio.”


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