updated 02:31 pm EDT, Fri August 15, 2014
Previous rulings favoring Vringo nullified, revenue percentage payout killed
A long-standing court battle between Vringo's I/P Engine and Google is grinding to a halt in the Mountain View-base ad agency's favor. The US Court of Appeals for the Federal Circuit declared two patents of Vringo's invalid, nullifying a jury verdict that found the search engine giant and others liable for a total $30 million in damages plus a percentage of Google Adwords profits. The ruling is the latest in a string of verdicts calling into question the overall validity of software functionality patents over that of the code itself.
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.
First filed in 2011, the lawsuit also included AOL, IAC Search & Media, and Gannett, and Target Corporation. Of the $30 million fine, Google would have paid $15.8 million, AOL $7.9 million, IAC Search & Media $6.6 million, and Gannet $4,322. Vringo had been hoping for at least $696 million in compensation from the judgment.
The patents in question had been developed by former Lycos Chief Technology Officers Andrew Lang and Donald Kosak. Vringo alleged that Google and others were using the patents to serve advertisements to users, resulting in over $38 billion a year for the search giant.
The ruling wasn't unanimous. The three-panel judge ruled 2-1 in Google's favor, with discussion amongst the judges as to the relevancy and necessity of software functionality patents. Decrying software patents, Judge Haldane Robert Mayer said in the ruling that "unnecessary litigation, and nearly two weeks of trial and imposition on citizen jurors, could have been avoided" if software wasn't patentable.
Google IP litigation chief Catherine Lacavera said of the ruling that "we always believed strongly in our case, and we are pleased with this decision." Vringo is evaluating its options after the defeat.