Bloomberg News

Google Seeks to Overturn Vringo’s $30.5 Million Verdict (1)

May 06, 2014

Google Inc., (GOOG:US) owner of the most-used Internet search engine, asked a U.S. appeals court today to throw out a $30.5 million patent-infringement verdict won by licensing company Vringo Inc. (VRNG:US) in 2012.

“There’s been a fundamental failure of evidence,” Google attorney David Perlson of Quinn Emanuel in San Francisco told a three-judge panel of the U.S. Court of Appeals for the Federal Circuit in Washington.

The dispute is over filtering technology to determine placement of advertisements on search results, which Vringo claims is fundamental technology used in Google’s AdWords and AdSense for Search products. While Google wants the verdict thrown out, Vringo said the trial judge erred in limiting the period from which it could collect damages.

During the 30-minute hearing, the judges questioned the complexity of the verdict sheet, in which the jury was asked specific questions about elements to support validity issues. Circuit Judge Evan Wallach said he had “problems with the jury’s findings” when it came to things like whether Vringo had proven evidence of copying.

“Maybe it’s a hash -- the jury made a hash of it,” Circuit Judge Raymond Chen said.

“The jury did a hell of a job,” Vringo lawyer Joseph Re of Knobbe Martens in Irvine, California, told Chen. He said Google had a “complete failure of proof” to invalidate the patents.

The panel gave no indication of how or when it would rule. Decisions in complex cases like this one usually take several months. Vringo fell 9.2 percent to $3.71 at 4 p.m. in New York.

AOL, Target

Vringo, based in New York, won a November 2012 trial against Google and some of its customers over violations of patents that used to belong to Lycos, once one of the most popular search engines on the Internet.

This appeal concerns only the verdict and not subsequent court rulings, including one that Google’s modifications to AdWords didn’t adequately work around the patents. Google has agreed to cover any costs incurred by customers AOL Inc. (AOL:US), Gannett Co., IAC/InterActiveCorp. and Target Corp.

Google, based in Mountain View, California, denies infringing the patents, and is challenging their validity and the value set by the jury. It also is challenging one of the patents at the U.S. Patent and Trademark Office; the agency earlier upheld the validity of both patents during a review, Vringo said in a statement.

Damage Award

Vringo said the only issue the appeals court needs to overturn is the damage award -- the company wants more. While Vringo said it’s entitled to royalties dating to September 2005, the trial judge limited the period to after the suit was filed.

A victory against Google could mean more money from Microsoft Corp., too. Microsoft, the world’s biggest software maker, last year agreed to pay Vringo $1 million, plus 5 percent of whatever Google has to pay for the Lycos patents.

Innovate/Protect Inc. bought eight Lycos patents, including the two at issue in the trial, for $3.2 million in June 2011 and sued Google and its customers three months later. Andrew Lang and Donald Kosak, inventors of the two patents, are former Lycos employees who became executives at Innovate/Protect, according to the complaint.

Ring Tones

Vringo was a company that sold telephone ring tones before it merged with Innovate/Protect, which owned the Lycos patents. It’s since bought other patents, including those from Nokia Oyj being used in litigation against companies including Chinese phone-equipment maker ZTE Corp. and Tyco International Ltd.’s security division.

Target, based in Minneapolis, is the second-largest U.S. discount retailer. IAC, the New York-based Internet company founded by Barry Diller, runs websites including Ask.com and Match.com. McLean, Virginia-based Gannett owns USA Today and other newspapers.

Lycos, a pioneer in search engines that once rivaled Yahoo! Inc. as most popular search site, is now owned by India’s Ybrant Digital Ltd., which bought it for $36 million in 2010.

The case is I/P Engine Inc. v. AOL Inc., 13-1307, U.S. Court of Appeals for the Federal Circuit (Washington). The case is I/P Engine Inc. v. AOL Inc., 11cv512, U.S. District Court for the Eastern District of Virginia (Norfolk).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editors responsible for this story: Romaine Bostick at rbostick@bloomberg.net; Bernard Kohn at bkohn2@bloomberg.net Steve Geimann


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Companies Mentioned

  • GOOG
    (Google Inc)
    • $593.35 USD
    • -2.63
    • -0.44%
  • VRNG
    (Vringo Inc)
    • $3.31 USD
    • 0.01
    • 0.3%
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