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Charter Sues Apple-Backed Group Over Patent Royalties

Charter Communications Inc. (CHTR), the fourth-largest U.S. cable company, sued an organization backed by Apple Inc. (AAPL) and Microsoft Corp. (MSFT) to force the group to license patents acquired from Nortel Networks Inc. on fair terms.

Rockstar Consortium US LP, based in Plano, Texas, controls 4,000 patents, some covering industry standards for networking gear, Charter said in a complaint filed today in federal court in Wilmington, Delaware. Technology companies formed Rockstar to buy bankrupt Nortel’s patents in 2011.

“Rockstar has misused and attempted to obtain exorbitant royalties from licensing the patents it purchased,” Stamford, Connecticut-based Charter said in the complaint.

The lawsuit seeks a jury trial, unspecified damages, an order that Charter doesn’t infringe 12 patents and a finding that Rockstar is liable for patent misuse and entering “an illegal conspiracy,” according to court papers.

Rockstar officials didn’t immediately return voice-mail and e-mail messages seeking comment on the lawsuit.

A co-defendant in the lawsuit, Spherix Inc., which has bought some patents from Rockstar, today called on Charter to enter into negotiations for licensing certain patents owned by Spherix and the consortium.

“We find Charter’s action without merit and misleading,” Spherix Chief Executive Officer Anthony Hayes said in a statement. Spherix “has never turned down a fair licensing fee,” he said.

Rockstar, which also includes BlackBerry Ltd., Ericsson AB and Sony Corp. (6758), spent $4.5 billion on the portfolio of patents and applications from Nortel, once North America’s largest phone-equipment maker.

The case is Charter Communications Inc. v. Rockstar Consortium US LP, 14-cv-00055, U.S. District Court, District of Delaware (Wilmington).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware at pmilford@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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