Vringo wins patent case against Google

Posted Jan 29, 2014

Vringo, Inc. (NASDAQ:VRNG) is a software development company that develops software for mobile devices. Based in New York, Vringo is publicly traded and has less than 30 employees, according to their financial profiles. Vringo acquired some patents from the old search engine Lycos in 2011.

Vringo used those patents to sue Google and won $30 million in a jury trial in December 2012. This was far less than what they wanted though.  However, U.S. District Judge Raymond Jackson rules that Vringo is entitled to 1.36% of U.S. based revenue from Google’s AdWords.

Judge Jackson said last week in a ruling that AdWords was not “colorably different” after being tweaked by Google following the Vringo verdict.  Judge Jackson gave Google and Vringo one last session to determine a royalty rate. When the two companies could not agree, he set it at 1.36%, which is almost the exact rate that Vringo wanted.

Judge Jackson followed a methodology in a case from East Texas where it was determined that Yahoo! infringed an online advertising patent owned by a “patent troll” called Acacia.

The order from today is set at a royalty rate of 6.5% on a royalty base of 20.9% for an overall rate of 1.3585%. The royalty base is based on the value that the Vringo-owned patents adds to Google’s search system, according to Ars Technica.

Vringo believes that their patents describes Google’s ad filtering system that ranks ads against each other in an auction. “They have a huge inventory of ads, and they have to get it down to the few that are the most relevant to their users. These patents describe a way to do it. And our position is, that’s the way Google does it,” stated Vringo’s lawyer Jeffrey Sherwood.

Google’s lead patent lawyer on this case said that google has already appealed the jury verdict and will appeal the royalty award also. Vringo filed this lawsuit under the name I/P Engine, which is a subsidiary that they created to hold the two patents that were purchased: #6,314,420 and #6,775,664. Interestingly, Microsoft was also sued by Vringo for ads that are displayed on the Bing search engine. Microsoft agreed to pay $1 million and 5% of what Google pays.

[Source: Ars Technica]