RockStar (Apple) sells patents to RPX; how to turn 4.5 billion into 0.9 billion

The Wall Street Journal notes that Rockstar will sell about 4000 patents, once purchased for 4.5 billion, to RPX, for the price of $900 million (0.9 billion).  Within the article



“Peace is breaking out,” said John Amster, the chief executive of RPX. “I think people have started to realize that licensing, not litigation, is the best way to make use of patents, and this deal is a significant acknowledgment of that reality.”




from a post by Matt Day


The Rockstar Consortium, an Apple-led group formed in 2011 to buy Nortel Networks’ patents, will sell the bulk of those to RPX, a patent clearinghouse that acquires the rights to intellectual property to license to its members. RPX plans in turn to license those patents to a group of more than 30 companies, including Cisco and Google.
Rockstar, which in addition to Apple includes Microsoft, BlackBerry and Sony, spent $4.5 billion for the 6,000 patents auctioned by bankrupt Canadian telecom giant Nortel. Rockstar transferred about 2,000 of those patents to individual consortium companies, and spent the years since then licensing the remaining set to the wider tech world and taking to court those who allegedly used the technology without properly paying for it.
That hefty price tag Rockstar originally paid kept the patents out of Google’s hands, and also beat a bid by RPX. (Google memorably offered pi and other mathematical constants in its own attempt to buy the patents)

But the temperature around smartphone litigation has cooled in the past year or so, reflecting a growing realization that forking over reasonably fair fees is cheaper than spending years in court. Apple and Google reached a deal to end their smartphone patent court fight in May. Rockstar, for its part, settled suits with Google and Cisco last month.