Google has been ordered to pay 1.36 percent of AdWords revenue to Vringo, a publicly traded company which sued the search giant over infringement of its patents. Back in 2011, the company bought a couple of patents (numbered 6,314,420 and 6,775,664) from an old search engine called Lycos, transferred them to Innovate/Protect, its patent-holding subsidiary, and used them to sue Google, AOL, and others.
When Vringo dragged Google to court, its investors bet big on the move. Although in November 2012 the company did win $30 million in Jury trial, it was far less than the $493 million they were seeking. But last week, Vringo won a patent ruling entitling it to additional royalties from Google over its modified AdWords product, which was tweaked by Google after the November 2012 verdict.
The dispute centers on the filtering technology that determines placement of ads on search results. Vringo claimed that even after a modification that was meant to be a workaround, the AdWords program still infringes on one of its patents. The US District Judge Raymond Jackson agreed with Vringo, and said that the modified version of AdWords is “nothing more than a colorable variation of the infringing system”. On Tuesday, he announced the royalty rate.
According to Jennifer Polse, Google's lead patent lawyer, the company has already appealed the jury verdict and is planning to appeal the royalty award as well.
Vringo also has a 'Video Ringtone' business but the company is more or less a patent assertion entity. Last year, the company dragged Microsoft to court over ads in its Bing search engine. The software giant opted for settlement, and agreed to pay $1 million plus 5 percent of whatever Google ultimately pays.