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Google Violated Patents and Must Pay Royalty on Adwords Revenue

     
12:15 pm on Jan 29, 2014 (gmt 0)

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Vringo is a tiny company that purchased some patents from Lycos, an old search engine, in 2011 and then used those patents to sue Google. In December 2012, Vringo won $30 million in a jury trial, but that was far less than the hundreds of millions it was seeking.

Today, Vringo got the payout it was looking for: a 1.36 percent running royalty on US-based revenue from AdWords, Google's flagship program. US District Judge Raymond Jackson had already ruled last week (PDF) that the AdWords program, which was tweaked by Google after the Vringo verdict, wasn't "colorably different" from the old infringing program. He gave Google and Vringo one last session to hammer out a royalty rate, and when they couldn't, he went ahead and set it (PDF)—at almost exactly the rate Vringo was seeking.

News URL: [pcworld.com...]
Court Order PDF: [ia700702.us.archive.org...]
1:16 pm on Jan 29, 2014 (gmt 0)

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What is it that makes me pleased to hear this?
7:19 pm on Jan 29, 2014 (gmt 0)

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What is it that makes me pleased to hear this?


Why should you be pleased that people get sued over their thoughts?

Most software patents are crap because most software solutions are obvious.

People that write things like JPEG and MPEG compression are doing something that's truly utilitarian and not obvious, those deserve a patent. But most of it simply doesn't pass the test and the patent office and courts don't know any better and they just let this stuff choke the industry.

It stifles innovation as people are trying to litigate thoughts which is what programming really is, mentally solving problems. Once you've patented enough thoughts every line of code you drop is infringing on something and the whole industry grinds to a halt.

Having been on the wrong end of some frivolous patent litigation, I can tell you that the time, money and resources this nonsense sucks out of a company can almost kill a small organization. It can easily be fatal.
7:29 pm on Jan 29, 2014 (gmt 0)

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I wish that patents only belonged to people who actually used them. Those "firms" that just own patents to sue those that infringe are wrong and shouldn't be allowed.
Eventually no one will be able to make anything because all the ideas will be patented with no plan to actually use them.
Sad.
7:45 pm on Jan 29, 2014 (gmt 0)

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Potentially, this could be a massive award.
The losers are not Google, but Google's advertisers; costs will rise.
7:57 pm on Jan 29, 2014 (gmt 0)

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And/Or publishers who will their revenue share shrink.
8:13 pm on Jan 29, 2014 (gmt 0)

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Some patents are just ridiculous.

I was watching a documentary the other day. One self-made billionaire showed a touchscreen tablet he made in the 1983. When the reporter asked if he patented it, the guy replied - "No, I don't believe in patents. I think patents make other people disincentivize in coming up with new things."

Now imagine if the first guy who created a fire from a spark patented it. Or the mason who used a keystone in an arc... Fuel your imagination with that idea and picture where we (humans) would be standing now.
8:56 pm on Jan 29, 2014 (gmt 0)

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Google can use a tiny sliver of the taxes it doesn't pay for this bill. At a recurring 1.36% of revenue it's significantly less than the Google tax on many businesses.

Since Google uses an auction model it's going to come out of their pockets and not those of advertisers unless they start tacking a 1.36% surcharge onto Adwords bills.

Still, sounds like another frivolous lawsuit and crazy award.
9:03 pm on Jan 29, 2014 (gmt 0)

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The patent industry is getting quite big. Especially companies like Google, Apple, Samsung, who purchase companies solely for their patents, and have an array of patents all against each other.
"If you sue me for this, then I will sue you for that".
12:09 am on Jan 30, 2014 (gmt 0)

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Google knows how to raise prices. They just ad a new "feature" that raises what we pay. They will create some new feature that is turned on by default that most people won't notice that charges more.

Of course they have already done a ton of this. The fact that my ad shows up a 2nd time when the user searches for something else is wrong. If I'm selling a service and somebody does a search for my term and it is not what they want and they do a 2nd search that is more specific and I am not bidding on that term because that is not what I do Google will show my ad again. Also when they changed broad to pretty much mean they can show my ad for things kind of related to my broad term was wrong as well. I know how to fix this but Google made a lot of money while people were figuring it out. They took away the ability to change bids on tablets which made them more money because some people used to exclude tablets. When they added first page bid they raised prices as well. Pretty much everything they do is to charge us more money.
6:59 am on Jan 30, 2014 (gmt 0)

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@whatson, its become very big already. Look up "cross-licensing", "patent thicket" and "submarine patent". Apart from the royalties made, there is also the huge cost of reduced competition, having fewer innovative start-ups because they are locked out, etc.

@incrediBILL, there is a better case for patents where someone does something inventive, but even there (especially with software) there are lots of reasons not to allow patents as well.
7:52 am on Jan 30, 2014 (gmt 0)

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Why should you be pleased that people get sued over their thoughts?

Did I say that?

Bear in mind that most of what Google has done since the original search engine took off has involved buying out patents and closing small companies.
2:44 pm on Jan 30, 2014 (gmt 0)

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Bear in mind that most of what Google has done since the original search engine took off has involved buying out patents and closing small companies.

While I agree with what you say, taxing Google will not remedy the problem that small companies face. Google's market share is so large in the advertising space that the cost of paying these imposed royalties will be passed down to users. This will make it even more difficult for small companies by making advertising more expensive. The only way to deal with Google, in my opinion, is to forcibly reduce their market share so that the checks and balances of competition return to the marketplace.
4:02 pm on Jan 30, 2014 (gmt 0)

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The losers are not Google, but Google's advertisers; costs will rise.


Not so fast as Bing and others are just waiting to take those advertisers at lower rates so if Google does something stupid and makes advertising not viable for many than other sites will quickly snap up their collateral damage.

The ad revenue ecosystem is what fuels Google so if anything ever impacts this, it's going to be a chain reaction that will unravel a great giant in record time.

Believe it or not, people will go where the ads go because as annoying as ads are, they are legitimate content that people look for when making purchases. People want to know about new products, gadgets, discounts, it's how the system works by exploiting the fundamental hunter and gatherer instincts in our DNA.
8:41 am on Jan 31, 2014 (gmt 0)

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Believe it or not, people will go where the ads go ...

Must be something wrong with my DNA. I watch TV on catch up so that I don't need to suffer the adverts. ;)