A Google complaint against Apple-backed patent consortium Rockstar will stay in a California court rather than be moved to Texas where Rockstar already has patent lawsuits against Google's Android partners, the California court ordered Thursday.
Backed by Microsoft, Apple, BlackBerry, Ericsson and Sony, Rockstar acquired Nortel Networks' patents for US$4.5 billion after outbidding Google in 2011.
Rockstar, which created a subsidiary called MobileStar Technologies in Plano, Texas a day ahead of filing its lawsuits, has wanted the California action by Google to be dismissed or transferred to the Texas court, which is generally seen as being more friendly to holders of patents.
The circumstances suggest that the MobileStar subsidiary was set up as "sham entity" for the sole purpose of avoiding jurisdiction in other fora, District Judge Claudia Wilken of the California court wrote in her order. Rockstar claims a principal place of business in Plano, Texas but most of its key management is in Canada where Nortel was headquartered, she wrote.
After Rockstar filed the suits in Texas in October against Samsung Electronics, HTC and five other companies, Google asked the U.S. District Court for the Northern District of California to rule that it does not directly or indirectly infringe seven patents of Rockstar. In the Texas court, Rockstar charged the seven Google partner companies of infringing some or all of the seven patents.
The lawsuits filed by Rockstar in the U.S. District Court for the Eastern District of Texas, Marshall Division, have placed a cloud on the Android platform, threatened Google's business and relationships with its customers and partners and its sales of Nexus-branded Android devices, and created a "justiciable" controversy between Google and Rockstar, Google said in the complaint.
"Because Google, the accused infringer, resides in California, much of the evidence is here. Some of the evidence may be in Canada or other states; however, that does not make Texas the more convenient forum," District Judge Wilken wrote in her order.
Judge Wilken also drew a link between the dispute and Apple. "Google demonstrates a direct link between Apple's unique business interests, separate and apart from mere profitmaking," Wilken wrote. Rockstar's litigation strategy of suing Google's customers "is consistent with Apple's particular business interests," she wrote.
The Rockstar suits in Texas may be transferred and consolidated in the California court, or they might be stayed in Texas and be reopened upon completion of the California suit, which likely will resolve some of the infringement issues in the Texas court, Judge Wilken wrote.