Google Inc (NASDAQ:GOOG) lost a big case to patent troll Vringo. United States district judge Raymond Jackson recently awarded Vringo 1.39 percent of running royalties from Google’s AdWords revenue after finding the search giant guilty of using protected intellectual properties.
Google loses patent case
This was the hefty payout the patent troll was seeking. Three years ago, Vringo bought two patents which involved the placing and ranking of advertisements for Lycos. This was used to sue Google Inc (NASDAQ:GOOG). In the latter part of 2012, a jury found Google Inc (NASDAQ:GOOG) guilty of patent infringement. They ordered the tech giant (and their advertisers) to pay the patent troll $30 million. The jury also decided Google should pay up an ongoing royalty but the judge would make the final decision on that.
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VentureBeat explained, “Google modified AdWords following the Vringo verdict, but Jackson last week determined that the new system “clearly replicates the infringing elements of old AdWords.” After Google and Vringo failed to agree on a royalty rate, Jackson set it himself at 1.3585 percent, which is effectively the rate Vringo had requested.”
What the ruling means
Google Inc (NASDAQ:GOOG) will most likely appeal the decision. However if the decision still stands, the tech giant will still have to pay up a lot of money within the next few years.
It’s still uncertain just how much money AdWords revenue earns over time. According to Ars Technica, rough calculations range from $15 billion to $18 billion in the United States. Since Google’s liability expands from late 2012 to 2016, this will allow Vringo to collect $200 million to $250 million a year.
Interestingly enough, Vringo used to place their focus on video ringtones. Since it wasn’t as nearly as successful, the company then purchased two patents and set up an I/P Engine as a patent troll.