Non-practicing entity Vringo, under the practicing name I/P Engine, won a trial against Google on the strength of Lycos patents back in 2012
, and was awarded $30 million. Google then changed the AdWords program, attempting to circumvent Vringo's patents; but earlier today, US District Judge Raymond Jackson finalized his ruling made last week that the new offering is not "colorably different" than the old program. After a patent-licensing negotiation ordered by the judge failed to produce results, Google must now pay 1.36 percent of its AdWords revenue.
Judge Jackson stated in his ruling that "Defendants' misconduct continues presently, and Defendants have taken no remedial action. In fact, they have redesigned a system that clearly replicates the infringing elements of old AdWords."
Jeffrey Sherwood, Vringo lead attorney said of the ruling that his reaction was "pretty darn positive. 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."
Google's head attorney on the case, Jennifer Polse, noted that the search engine has already appealed the verdict from 2012, and said that the company "believes strongly in our pending appeal in this matter, and we anticipate seeking Federal Circuit review of today's decision as well."
Google is liable for the royalty from November 2012, should it be upheld by the appeals court. The patents expire in 2016. Payments to Vringo by Google are estimated to be approximately $225 million annually.
The trial will have a notable cascading effect. Microsoft was also sued by Vringo over its Bing ad-serving algorithm -- it settled in May for $1 million plus five percent of whatever Google pays.
Vringo versus Google