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Google pays Vringo troll toll

Google is paying the price for its market control
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Google might want to start monitoring its AdWords activity, and remember that it wasn't the first search engine to use the tech.

A U.S. District Judge has found the Californian giant guilty of using protected intellectual property in its advertising platforms, awarding the affected company, Vringo, 1.36 per cent of the royalty on Google's U.S. AdWords revenue.

Vringo, after setting up a shell company named I/P Engine, has been collecting patents to gain back cash it haemorrhaged from its old ringtone business. The company purchased two patents back in 2011 from now-defunct search engine Lycos.

Although Lycos has been dead and buried by the success of Google, both patents involved the ranking and placement of ads in search engine results. Vringo immediately went on the attack and sued Google that same year, resulting in an initial payout of $30 million (£18 million, $34 million) from the California-based firm.

Vringo on patent rampage

Google is likely to appeal against the ruling (PDF), but if the decision stands, it will have to hand over hundreds of millions over the next few years. Though there is no clear idea of how much Google earns from its AdWords platform, Ars Technica arrived at a rough estimate of up to $18 billion (£11 billion, AU$20 billion) per year.

According to the court ruling, Google is liable from 2012 until the patent expires in 2016, which amounts to around $250 million a year for Vringo. It could mean that by 2016, up to $1 billion (£600 million, AU$1.1 billion) will be paid out in royalty fees to the patent troll.

Vringo also named AOL, Gannet, Target and IAC in the lawsuit but did not aim to seek money from them. The patent troll also sued Microsoft back in May 2013, for which it won $1 million (£600,000, AU$1.1 million) and five per cent of whatever Google would pay for its case.

Via: Wired