Court: Google infringed patents, must pay 1.36 percent of AdWords revenue

http://arstechnica.com/tech-policy/2014/01/court-orders-google-to-pay-1-36-of-adwords-revenue-for-infringing-patents/

by kjhughes • 12 years ago

294 180 12 years ago

Even though there was no evidence of copying—Vringo admitted as much

What a ridiculous system we all operate under. You come up with a mathematical formula for ranking some text on a page (in this case, what ads to show first), and you could now owe $250M/year to some company you've never heard of because they already bought the rights to that formula. It turns my stomach; sorry that I have nothing of more substance to add to this story.

allochthon• 12 years ago

I agree. The basis for the plaintiff's suit no doubt consists of rarefied lawyerese, and the plaintiff has probably added no value to the world. But they get many millions. How has the property law been allowed to tie itself up into this knot?

aquadrop• 12 years ago

Yes, I think they got millions for doing nothing is one of the problems. Probably, you should only have right to defend your patent if you're actually using it. Like that's part of your business. And if you don't use it for couple of years, patent goes to public domain.

graving3• 12 years ago

They(and you), did hear of the company that originally got these patents. Here's the very interesting story behind the patents.

http://techcrunch.com/2012/03/31/why-google-might-be-going-t...

edit: I am rate limited from replying to fpgeeks reply below so I will post my reply here.

First, the author is extremely clear that he invested in Vringo, in fact the whole article is about why he did so., so I am not sure why you talk about it as if it is kind of a revelation. Second, the article is very informative about the history of the patents and is highly relevant. Third,which of my comments are pro Vringo, really? Fourth, can I be suspicious that you're short Vringo stock, or do you get a free pass just because you have an older HN account.

fpgeek• 12 years ago

As magicalist notes below, the author of this story is an investor in Vringo.

Separately, given the allegations in the Ars comment thread:

http://arstechnica.com/tech-policy/2014/01/court-orders-goog...

I'm more than a bit suspicious of a brand-new account that's posting pro-Vringo comments.

chavesn• 12 years ago

You can think to yourself: “ugh, patent trolls are disgusting”. But the protection of intellectual property is what America is built on. Smart people invent things. Then they get to protect the intellectual property on what they invents. Other companies can’t steal[1] that technology.

"Protection of intellectual property is what America is built on?" Hyperbole much?

"Smart people invent things. Then they get to protect [...] what they invents." Oversimplification much?

Not exactly a home-run defense of patents by Mr. Altucher.

[1]: As admitted by the article, there was no "stealing" here anyway.

ableal• 12 years ago

Here's the very interesting story behind the patents.
http://techcrunch.com/2012/03/31/why-google-might-be-going-t...

That link is definitely worth a few minutes. Thanks.

CompleteMoron• 12 years ago

whew i thought they had to pay the $$$ to PUD from Fucked company for the little tiny ads!

bsdetector• 12 years ago

Just because the same thing can be invented independently doesn't mean the system is ridiculous. In fact, it's the very fact that the system relies on to create research competition.

Being the Vringo is the motivation to invent things before the competition does.

andrewflnr• 12 years ago

You seemed to have missed the part where Vringo bought the patents from Lycos, a company google killed on the open market by, in your terms, doing better research.

andrewfong8• 12 years ago

Alternatively, it creates a motivation to not even try in the first place. If you've come up with an idea, there's a good chance someone else has as well. Why work on an invention if there's (1) a very good chance that someone else will get there first and (2) this will force you to toss all your work out the window, even if your implementation is better.

Moreover, the current system creates a perverse incentive to obfuscate your patent. Although all patents are (eventually) published, there's no requirement that they be published in a manner that's useful (no source code) or discoverable (non-standard jargon). The incentive is not always to make the patent well known until after a party has already invested significant resources into an enterprise, at which point the patent can be used for something pretty close to extortion.

andrewfong8• 12 years ago

The lack of an independent invention defense (or some variation of this) is pretty much 80% of what's wrong with patent law in my opinion. A sampling of the issues an independent invention addresses:

* Obviousness. Patents are required to be non-obvious to a "person holding ordinary skill in the art", but obviousness is highly subjective and difficult to assess (especially for a non-technical jury). In contrast, evaluating whether something was independently invented, while not necessarily simple, is a more objective test.

* Utility. One of the rationales behind the patent system is that we want to encourage inventors to share their ideas with the world instead of just keeping them secret for as long as possible. While the patent system requires publication of the invention, it doesn't require publication in a manner that's particularly useful. If you could only assert patents against people actually using them, then you would have a strong incentive to make them useful (e.g. source code).

* Supply and Demand. The current system grants a flat 20 years to each patented invention, regardless of how difficult or expensive it was to invent. Recognizing independent invention creates the opportunity for a more flexible system. Inventions that are hard to reproduce independently are more valuable to society and should enjoy a longer term than easier ones.

The obvious problem with all of the above of course is how feasible it is to assess whether something was invented "independently". I've addressed that to some degree in this blog post (http://www.techdirt.com/articles/20121011/14171220681/yes-in...), but I admit it's a hard problem.

EDIT: Typos

eru• 12 years ago

I mostly agree. Though, you'd get some interesting reverse engineering related problems.

Ie look at the patent, come up with a problem that would make this patent obvious, lock some engineers in a sealed room with the problem, and wait for something like the patent to fall out. Was that independent invention, then?

cperciva• 12 years ago

evaluating whether something was independently invented, while not necessarily simple, is a more a objective test

Only if you take a very generous interpretation of "independent". For an reinvention to be truly independent, the reinventor would not only need to not have read about the original invention, but also to have not read about anything inspired by the original invention, and not talked to anyone who read about anything inspired by the original invention, etc.

Hermel• 12 years ago

A much simpler solution would be adjusting the expiration of IT-patents. The patents in this case are from 1996 and expiring in 2016. If the term for IT patents was reduced to 10 years, we would have many fewer problems.

lifeisstillgood2• 12 years ago

Cigarette companies don't get those kind of super-sized judgements against them, gun manufacturers don't. Why the hell should Google?

My favourite part is just how good the Microsoft lawyers are - "we will pay 5% of whatever Google pays" is an incredibly good deal and shafts Google quite nicely at the same time.

And anyway, isn't this really obvious - to anyone? I have scanned the patents referenced and frankly I don't see any algorithm that is not "return information relevant to the search term presented, and mark the users profile if they liked it"

No implementation details, which frankly seems to be the whole difference in software vs hardware.

Edit: my calculation ignored US only

reader50002• 12 years ago

This is the core problem. The probability of two independent "inventors" (i.e., software engineers) discovering a similar solution is very high.

Before software engineering, the probability of this happening may very well have been low enough to where nobody cared.

But if you're writing code, you are relying on and creating thousands of "inventions" a day. To "claim" one of those inventions so that nobody else can use it is absurd.

The law just doesn't get that yet, which is weird, because big tech companies have been getting burned by it for decades now. I guess they just figure the benefits>costs for them, and when peons get screwed, who cares?

zanny2• 12 years ago

I'd argue you'd get more economic benefit abolishing patents entirely (not just the software ones, I mean the ones on reproducing someone elses car or gas furnace). You pay a cost in a loss of investment valuation towards invention because it is less economically beneficial if you can't have a monopoly on your patented good, but you benefit economically by letting new inventions reach natural price equilibrium immediately, and the spread of new inventions would propagate more inventions, even without a major profit motive - you still benefit being "first out the door" on a new idea. Which we see all the time in software, and then run into this problem where first out the door has already made a bunch but is now suing me for trying to do something even remotely in the same problem domain because I see demand there, but I won't be able to meet it because I'm artificially locked out of that market.

That applies to all economic domains. Patents worked back when it was extremely hard to sell your goods to its entire market, because you were either distance limited, communication limited, or production rate limited. In the first two situations someone could just take your idea, set up half way across the country, and made all the returns.

Today, I can invent anything I want and have it on ebay overnight and ship it anywhere in the world. I can advertise on most major ad services if I want, with an audience of the entire first world. The only limiting factor for me is demand, but that just means I have to be safe when bringing inventions to market, but it is good for the economy overall because it means if I can't meet demand, someone else will pick up the slack.

It is still, like I said, advantageous to the first to market with an idea, enough so that I wouldn't predict much of a drop in novel ideas. Like I said, I would expect more if technology and designs were more open and people could cheaply iterate and extend past concepts more readily.

Glyptodon• 12 years ago

I don't see why independent invention wouldn't lead to a legal assumption of obviousness. Independent invention seems like incredibly clear cut proof of obviousness to me, anyway.

gcb02• 12 years ago

technically, it is pretty simple and effective.

If several people would claim independent invention, it is obviously a statement about obviousness. So the patent would already be invalid under the current law.

Now, since everyone involved in patents, they don't want to interpret the law that way. So there is a non-written agreement that no one will go that route. and that is idiotic.

joelrunyon• 12 years ago

Just hundreds of millions? Is that only going forward or is it retroactive? If it's the latter, I'd expect that number to be much, much higher.

magicalist6• 12 years ago

It's only retroactive back to 2012 and the patent expires in 2016.

dclara3• 12 years ago

I was wondering Google started to use Adwords from 2012? But I heard about re-targeting in 2012 though. It is said Google knew it from 2005, but didn't buy it or failed to buy it. Not sure. Interesting story.

cycrutchfield• 12 years ago

Disgusting, what a broken system. Can anybody actually defend such a system and explain how it promotes innovation?

linuxhansl3• 12 years ago

It seems to be pretty well established now that this system does not support innovation (at least not in the software business.

If the benefit of society as a whole is the objective then inventions are only worth protecting if they would not have occurred without such protection. An idea clearly does not fall into that category, it's worth is in the execution and not in "having it".

saraid216• 12 years ago

It seems to be pretty well established now that this system does not support innovation (at least not in the software business.

Back when I was actively studying this stuff, it was noted that there are four specific industries where intellectual property just doesn't work as intended. Software was one, pharma was another, and I forget the other two but a quick Google ought to surface them with more credibility than I can drop here.

That's not to say it works much better outside those industries, but it's not completely pointless.

stevewilhelm• 12 years ago

Software startups are more likely to raise VC funding if they can demonstrate they have a defensible product or service.

One of the ways of making a product defensible is to patent its underlying technology.

If a software startup doesn't hold a patent, there is a chance a larger player could just copy the startup's product or service and drive the startup out of business.

vinhboy• 12 years ago

Sometimes I wonder if I am witnessing America's greatness in action, or the unraveling of it.

PythonicAlpha4• 12 years ago

It is clearly America's downfall -- and America is pulling the world with itself.

doktrin• 12 years ago

Oh come now. Patent trolls are a massive nuisance, but they don't represent an existential threat to this country - let alone all of human civilization.

protomyth3• 12 years ago

"While publicly-traded Vringo" - hum, somehow they have a market cap of $332.30M.

danielharan• 12 years ago

Almost 334 now; it was the first thing I checked after reading that story.

A hostile take over might be cheaper than paying royalties.

ohashi• 12 years ago

So if Google took over the company and settled for paying a massive amount to them, this would in turn force Microsoft to pay 5% of that. Except anything Google paid, would essentially go back to Google. Could you bankrupt Microsoft this way?

protomyth3• 12 years ago

Probably a Microsoft + Google buyout = status quo is a fine thing if it cheapens the bill

increment_i3• 12 years ago

Is there any push right now to enact legislation that makes patent litigation available only to entities that actively participate in the relevant marketplaces? It doesn't seem like there is, but maybe I'm not that informed in these affairs.

dror• 12 years ago

No. Just stop granting patents on software or business processes. Copyright, yes, patents, no.

scotty792• 12 years ago

You can grant both but for no longer than a year.

dannypgh• 12 years ago

That seems like a pretty unfair approach -- if it's valid to have a patent, seems like you shouldn't penalize someone who doesn't have the resources to "actively participate" in the market by preventing them from licensing or selling it to others.

I personally don't care for patents, but even more unfair than what we have would be letting some, but not all, actors get and enforce these patents.

scotty792• 12 years ago

It has some precedent. I have read that at pioneer times you could have been given deed to the piece of land but only on condition that you did something with the land. If you didn't used your land in any way it could be taken away from you.

dmak• 12 years ago

1.36% of AdWords Revenue? That is a lot of money. I don't see how they are entitled to that amount in any way.

increment_i3• 12 years ago

Also, why an ongoing 1.36% cut? What's the significance of that number? Might as well peel back the layers on this farce.

mehwoot• 12 years ago

Read the article, it explains the percentage calculation.

sheetjs• 12 years ago

US-based revenue from AdWords, Google's flagship program

Given Google's structure and revenue recognition, I'd be surprised if they had to pay out anything significant.

Danieru• 12 years ago

Google's corporate structure is designed to hide and move profit, not revenue. If this ruling is upheld we're talking a super-massive quantity of money going to someone who did nothing.

And the patent system will still not get reformed.

magicalist6• 12 years ago

It's also not even designed to hide or move US profit, so it's doubly irrelevant. Double Irish Dutch Sandwiches don't do anything for money made in the US.

arunabha2• 12 years ago

Google is already appealing, but what happens if Google loses ? Would the supreme court agree to hear this case ? If so, the silver lining might be that the supreme court overturns this decision and in doing to comes up with something useful like the 2007 decision which limits a patent troll's ability to get an injunction to knock out a product.

tantalor• 12 years ago

Article makes no mention of the validity of the patent. Does the court not take that into question?

analog31• 12 years ago

I'm not a lawyer, but as I understand it, the validity of a patent, and the infringement case, are handled by separate courts, each on its own schedule. You can get an infringement judgement against you for a patent that is ultimately invalidated, and the judgement still stands.

yalogin• 12 years ago

So is the tech industry as such not interested in changing this system? I find it inconceivable that the entire tech industry is not able to change the law about just software patents, not all patents, but just software patents. All the old laggard companies have invested a lot of time and money and hoarded a bunch of patents and so they do not care enough. Eventually the companies that are hurt in this are the small ones.

Gustomaximus• 12 years ago

The Microsoft settlement for the same was interesting:

"Vringo also sued Microsoft over ads in its Bing search engine. Microsoft settled that case in May, agreeing to pay $1 million plus 5 percent of whatever Google ultimately pays."

It's strange agreeing to pay 5% of Google outcome on the same and quite clever the more I consider the pros/cons.

iribe• 12 years ago

They're arming patent trolls and aiming them at google. This isn't the first one (rockstar).

badman_ting• 12 years ago

I don't understand why people keep coming to this conclusion. To me it just sounds like MS ducked faster.

abalone• 12 years ago

What does this mean for ad-supported startups? Does anyone have specifics on the patent issue here? I didn't get it from the news coverage.

dclara3• 12 years ago

I haven't read the patents yet. According to the original article and it's comments, looks like there are two aspects are infringed: auction model and user re-targeting model.

It looks like the auction model based on the number of hits is pretty obvious now, but it was not quite obvious in 1999. The re-targeting model is definitely novel in 1999.

mwally• 12 years ago

FUCK PATENTS. The old system (copyright, IP, etc) needs to BURN TO THE GROUND.

linuxhansl3• 12 years ago

Let's not throw out the baby with the bathwater. Fuck software patents... Absolutely. Copyright... Not so much. That is actually useful. Open source and free software would not work without copyright law. Copyright only triggers when you copy somebody else's work, I.e. a specific expression of an idea. Patents trigger when you merely happen to have the same idea.

JoshTriplett• 12 years ago

Copyright... Not so much. That is actually useful. Open source and free software would not work without copyright law.

Not true at all. Copyleft licenses as currently written wouldn't work without copyright law; all-permissive licenses like MIT and BSD would become the default state. I'll happily take that trade, and several folks at the FSF and other FOSS organizations are on record saying the same.

serge2k• 12 years ago

Except that the current system of enforcement is broken and the current length of copyright is ridiculous.

option_greek• 12 years ago

Why can't they simply incorporate outside US in some country where the patents are milder ? Or is it that they have to pay royalty even then...

tsotha• 12 years ago

It wouldn't have any effect on business they do in the US.

colechristensen2• 12 years ago

Good.

There are few things which can effect change better than billionaires in fear of losing hundreds of millions of dollars a year. When it happens to small fry you lament because they can't do anything to change and end up settling to save themselves or losing and losing everything. When it happens to the 55th largest company you rejoice because they have the power and motivation to change the rules.

GhotiFish• 12 years ago

ever the optimist eh?

colechristensen2• 12 years ago

Every now and then our government can be corrupted by rich folk to do good.

CamperBob2• 12 years ago

I remember thinking exactly that, when Microsoft was hit by the $100M Stac Electronics judgement in 1993. "Surely large companies will understand now that they have a lot more to lose from software patents than they could possibly have to gain," I said to myself. "I'll bet they're calling their pet Congressmen and writing checks this very minute."

I've been wrong before, but not usually that wrong.

devcpp• 12 years ago

Instead they played that same game and are now part of the big software patent companies. In a selfish perspective, it does make sense.

I fear Google one day understands that they should join this mafia and start suing for their patents, under the pressure of their shareholders.

ceejayoz• 12 years ago

When it happens to the 55th largest company you rejoice because they have the power and motivation to change the rules.

Or they just settle next time.

munificent• 12 years ago

There are few things which can effect change better than billionaires in fear of losing hundreds of millions of dollars a year.

What change would you like this to effect? I thought Google already had a solid reputation of being against patent trolls and software patents. For example:

http://www.theverge.com/2013/4/17/4233818/google-submits-pub...

http://www.google.com/patents/opnpledge/pledge/

http://www.google.com/patents/opnpledge/patents/

Goronmon3• 12 years ago

When it happens to the 55th largest company you rejoice because they have the power and motivation to change the rules.

Or they realize that fighting the system is a suckers game and join in, this cementing the system against their competition.

perlpimp• 12 years ago

nothing would happen until google is driven into the ground(bankrupcy) with spurious judgements from various companies against its profits. I would love to see that happen, because then something will be done. Anything above is just a blip in earnings diagram. Digital mafia will just keep on truckin'

graving3• 12 years ago

Vringo isn't your average patent troll and actually has a fascinating back story and history behind it. Here's a good link to understand the background.

http://techcrunch.com/2012/03/31/why-google-might-be-going-t...

magicalist6• 12 years ago

Note that the author is an investor in Vringo.

PythonicAlpha4• 12 years ago

So called "intellectual property" is an other way to decrease the value of manual work and increase the income of pure "possessions".

By making creative work "property" that can be owned and making minimal creative acts "possessable" in a way, that other creativity is inhibited or at least "billed", actual work is diminished for pure "property" holding.

The only way, non-possessing people can climb up "from rags to riches" is by their work. But working is less and less valued in this system.

And with the patent system, the true inventors are getting very limited money (in big companies, it is most often just a fixed amount per patent) -- the rest of the value goes to lawyers, the companies investors and the buyers of the patents when the company goes bankrupt or looses interest. Thus creating a system, where part of the mobile phone or the software or whatever gadgets price must pay the royalties for the patent owner (not the inventor!). Thus this amount goes away from the money that can be paid to workers and inventors. The whole system improves income generated by possessions, but reduces income possibilities for workers and creative people.

eob• 12 years ago

This is an interesting angle of thought. Thanks!

SpaceRaccoon2• 12 years ago

What if manual work is required to produce this intellectual property? And isn't the intent that the rights belong to the inventor or creator?

PythonicAlpha4• 12 years ago

Yes, it is.

But that is not the point. The point is, that the manual labor gets less and less earnings, but the possession of the properties. How many creative products with high value are in the hands of their creators?

In reality, the high earnings are not made by the inventors or creators of things, but by those that have acquired them in any way. In corporations, it is normal, that inventors just get some small fixed amounts for their inventions. Even in the music business, the musicians have the smallest part of the earnings. Often time, the musicians have to sell the rights to the companies, so the companies are earning most of the money. Only very few musicians can make extra-deals and get rich.

To answer your second question: No, it is absolutely not the intent! By making "intellectual property" the same level as other property, the intent is not, that the inventors should have them (as normal copyright once was intended), but the intention is, that it is a trade-able good, that can be accumulated by the wealthy and used against those that are creative (something, that money is not, so creativity must kept cheap).

thrownaway2424• 12 years ago

Wow the Microsoft angle is pretty corrupt. They paid the plaintiff a million bucks plus 5% of the judgement they get against Google, effectively bankrolling their lawsuit and putting a patent troll on commission.

There's near-endless bitching and whining about Google being evil these days, but even today nobody sinks as low as Microsoft.

arunabha2• 12 years ago

I read it as Microsoft paid a million dollars and will pay 5% of what Google pays. I dislike Microsoft as much as the next guy, but it seems like they believed the patent would win in court and wanted the cheapest way out.

SilkRoadie• 12 years ago

This is it, not sure how you could read this another way. When reading the article it hit me that this was a great bit of business from Microsoft.

A million dollars isn't much for MS to pay to make this go away... and then only paying 5% of Google will be forced to pay if they lose in court.. Microsoft's legal advisor must be happy with himself today

graving3• 12 years ago

Bing was infringing and Vringo had tens of millions in cash and big investors like Mark Cuban bankrolling it. They certainly didn't need a paltry million bucks to continue the lawsuit.

Vringo already had the jury verdict against Google before the MS settlement. Also, maybe Bing has only 5% of Google's revenue/profit.

Funny that you seem to be falling victim to what you accuse others of doing i.e kneejerk birching and whining.

mythz2• 12 years ago

Mark Cuban is bankrolling a patent troll? From what I've heard from him, he absolutely detests patent trolls, I'd be surprised if he's backing one.

xzel• 12 years ago

I mean I guess that is one way to look at it. The other could be that they settled. If Google wins the case they pay 5% more of zero, if they lose, Microsoft pays more but so does Google. Its not totally win-win but yeah I can see it mostly being such. But to even get a settlement like that, wouldn't Vringo have to accept it? It isn't just Microsoft malice.

MichaelGG3• 12 years ago

I read that and thought, how funny if Google bought Vringo out, then determined Google owed $10B. Of course that'd mean paying Vringo, which is a vile thing.

I don't think it's corrupt though. Sounds like MS said hey, here's some money (versus losing a settlement for far more, like they did over XML), and if you win against Google, then we'll pay likewise. Otherwise, you'll fight both of us.

Of course it'd be nice if MS stood up and fought, but it's easy to say what other people should do with their billions.

cromwellian• 12 years ago

One thing to consider is if Vringo is bankrolled by a steady $200+million revenue stream, they are most likely going to turn around and use that money to buy up patents all over the place. I doubt the money will be used to create any products. We'd be looking at the next Intellectual Ventures, backed by a massive hundred million dollar guaranteed revenue stream.

Even if you hate Google, this is a pretty raw deal for the industry.

moca• 12 years ago

This is largely a showcase of stupid economy in United States. If you look back past 20 years, there really isn't any meaningful economy growth except the high tech industry. In most cases, you simply higher price for the same house, transportation, education, healthcare, food, lawsuit, and other BS. Instead of encouraging people and companies to do great things that actually improve living quality, the current economic and political system simply drags everything down.

American voters stuck too much with personal values and elect a congress that does not do anything and gets 10% approval rate. Now we have to deal with this kind of stupidity. #thanksobama

hkmurakami• 12 years ago

iirc the finance industry grew a ton over the same time period.

x00542• 12 years ago

I tried really hard to understand the 2 patents in question in this case. I can see that both patents relate to a method of assigning value to search results based on how long a user spends looking at the result, or number of clicks, etc. But I am sure I am missing a bunch of nuances. Could someone with Patent background explain these to patents:

http://www.google.com/patents/US6314420 and http://www.google.com/patents/US6775664

Or maybe link me to the explanation. I am interested because from what I have understood this sounds really obvious, just application of good business practices to the internet. If customers like a particular product (click on one link a lot), you get more of that product (show the link more often), so you can sell more. Is there more to it? There has to be, right?

noonespecial• 12 years ago

just application of good business practices to the internet...

That's the foundation of nearly all software patents these days. Its business, but on the internet.

It seems to work because of the built in novelty factor. When there was no internet, it was impossible to do business on it, now that there is, its suddenly possible and so seems novel. It feels like a new invention when in fact, its really just an application of the technology to the same old same old.

x00542• 12 years ago

I wish I could travel back in time to the early 1990 and patent "a method for making profit by buying and/or producing products and selling them at a higher price.... on the internet."

shadowmint• 12 years ago

I agree with the comments on Ars.

This sort of 'litle parent that could' story are the post child for pro patent folk.

No, that's not how it works. No, small one-time inventors to not benefit from the current parent system. Irritating as anything seeing it being played out this way.

This is a commercial patent trolling company, from the inception it was so, and it remains so now. These are the people who the current patent system benefits.

shmerl• 12 years ago

Software patents need to be abolished for good.

WalterBright3• 12 years ago

What's also terrible about the patent system is there is simply no way for any of us to tell, when we develop something, if we're infringing on patents or not. We're all subject, at any time, to being subject to some massive infringement lawsuit.

What I do not understand is why the big companies do not all get together and lobby to abolish software patents. Do they think that if they acquire enough patents, they will win? They all seem to be losing as many patent suits as they win. Pyrrhic victories all around.

zyrthofar3• 12 years ago

As a programmer, this is exactly what I fear.

It is also why I will not create a startup company, and have my dream crash because of a failed and corrupt system.

josephlord3• 12 years ago

Assuming this goes through with no successful appeal Google will have to pay 1.36% of their revenue related to a particular infringing product to Vringo for a period for which they were well aware of this patent until it expires in 2016. This example gives nothing to indicate that any business you start will be crippled by patent issues.

Now legal costs and/or Lodsys like trolls might be a real threat to a fledgling business but they seem to have gone quite quiet for the moment.

noptic• 12 years ago

I´m a peacefull and calm person, which despites violent but the more I read about US patent law the more I want to set a torch to the trolls and kill them with fire.

I know that this is not very constructive. I know that violence is not a solution. But seeing what these [insert insult here] do to our industry I just can not help myself.

zaroth4• 12 years ago

The money is going to the guy who patented a crucial part of Google's AdWords algorithm which neither they nor Bing can apparently design around.

The guy got crushed in the market, being just a little fish, he was gobbled right up. But he bought back his patent, and took the fight to Google and Bing and won.

You can argue the percentage calculation is a too rich by an order of magnitude or two (and I think it is), but you can't argue whether the patent is valid or whether they infringe. A judge and jury said it is, and they did, and that will stand until a higher court says otherwise.

Did Google invent it first? Nope. Did Google find any prior art? Nope. Was the patent obvious? Nope.

I don't have a problem with large companies paying large sums to inventors who actually produce a product, patent their invention, but get crushed by the market a few years later.

This is actually kinda how it's supposed to work. If this is an example of what is "wrong" then there there must be no patent that is "right".

skj3• 12 years ago

Let's remember that when the guy was "gobbled right up", Google was a dozen people with one server in a garage.

The fact that multiple entities came up with this idea, without communication of the idea between them, means that it was more a function of the environment the idea was conceived in than the person who did the conceiving.

zaroth4• 12 years ago

Agree with everything you've said, and I still think Google has to pay for infringing.

Patents are NOT just to prevent copying. Patents are not supposed to be worthless against larger companies who can just replicate your work without your help.

If you could just re-engineer any patented invention, patents would be worthless. Companies would be incentivized to bury their heads in the sand so they could be sure they were not 'inspired' by anything out there that might have been patented. The only way to prevent this is to say, we don't care if you "knew" about the patent you still can be found infringing.

The thing I hope will be reversed on appeal is willfulness. It seems to me this was not willful. Or perhaps the definition of 'willful' should be tightened to mean reverse-engineered or copied from a practicing entity. That's one way to get the damage award to be more reasonable.

Goronmon3• 12 years ago

The money is going to the guy who patented a crucial part of Google's AdWords algorithm which neither they nor Bing can apparently design around.

Was the patent obvious? Nope.

These comments seem to be at odds with on another. If the patent covers an algorithm that is a natural solution to the problem multiple companies are trying to solve, doesn't that mean the solution is 'obvious'?

Is that how we want software development to work? I solve a technical problem in an application, but because someone I've never heard of on the other side of the country happened to patent that solution first, I can be sued for money? Sure, it benefits the people who file patents, but I don't think patents should exist solely because they can profit a revenue stream to the people who file them.

zaroth4• 12 years ago

I think 'natural solution' is a play on words. My understanding is that all the search engines (including Google) spent many years figuring this out, failing many times along the way. PG's patent on Bayesian anti-spam is another example of something which seems obvious in retrospect, and now everyone does it.

'Natural' to me means a product or feature which just fits perfectly within the system. A natural solution is the most valuable and often hardest to come by. They also tend to seem incredibly obvious in retrospect, and yet examining history will demonstrate that others suffered for years for lack of that exact functionality.

For example, the intermittent wiper, or the teleprompter, or maybe even the paper clip. It's the ideas that seem the most obvious in retrospect which need the strongest patent protection. But only if you can show it's novel.

One way the patent office will let you demonstrate something is 'non-obvious' is if you can show something is both novel and actually solves a large existing problem in the market. The novel, simple, elegant solution to a large problem is by definition non-obvious, or else someone else would already be doing it.

squirejons2• 12 years ago

Wow! As a patent agent, those patents are pure MONEY patents, incredibly broad, especially to have been published in 2001 (but with a priority date of 1996) Here is the money claim:

A search engine system comprising: a first system for receiving informons from a network on a continuing search basis, for filtering such informons for relevancy to a query from an individual user, and for storing a ranked list of relevant informons as a wire; a second system for receiving informons from a network on a current demand search basis and for filtering such informons for relevancy to the query from the individual user; and a third system for selecting at least one of the first and second systems to make a search for the query and to return the wire or demand search results to the individual user. ==========

here is the money claim for the other patent:

. A search system comprising: a scanning system for searching for information relevant to a query associated with a first user in a plurality of users; a feedback system for receiving information found to be relevant to the query by other users; and a content-based filter system for combining the information from the feedback system with the information from the scanning system and for filtering the combined information for relevance to at least one of the query and the first user.

man, that second one is a pretty broad patent.

moondowner• 12 years ago

They are pretty clear on what they do: "Vringo, Inc. is engaged in the innovation, development and monetization of intellectual property and mobile technologies"

http://www.vringoip.com/cgi-bin/index.pl

FollowSteph3• 12 years ago

Wouldn't it be cheaper and safer for google to just controller interest in the company? A hostile takeover if you will...

yeukhon• 12 years ago

Smart people invent things. Then they get to protect the intellectual property on what they invents.

Then all previous knowledges we get from ancestors should be protected. The dead also deserve a share.

RuCrazy• 12 years ago

google got shafted...or was it the other way around...? Good day!

auggierose• 12 years ago

Yeah, just get rid of patents. They serve no purpose any more today.

yetanotherphd• 12 years ago

Here is what two economists at the St Louis Federal Reserve have to say about patents (tl;dr they are bad)

http://research.stlouisfed.org/wp/2012/2012-035.pdf

dquigley• 12 years ago

With a market cap of less than $350 million, shouldn't Google just buy them? I realize that they'd pay more than that, and that there might not be enough stock available to get a controlling share, but it would be an interesting strategy if they could pull it off.

adventured2• 12 years ago

It's about $425m as I write this. Yes, Google should probably try to buy them if they can. The people that control VRNG might consider that they'd rather have a billion in cash from the payouts, that they can then push into more patent gains, than to sell right now for, say, $800m.

I think people in that type of position frequently tend to get over-confident after winning, and rather than take one big payday, they keep rolling the dice.

AJ007• 12 years ago

We need a numbers based study that shows patent trolls retard innovation and consequently weaken national security. Regulators, senators, and Presidents (in the US) prioritize that stuff.

How can I, as a small start up, produce a new mobile phone? Every concept from the hardware to the software is layered in patents. What other things are small companies not bothering to produce because of the patent minefield? At every turn and corner you may be stepping on another patent troll waiting to take a percentage of your earnings as well as drain your bank account on legal fees.

trekky1700• 12 years ago

As long as clueless fucking judges allow this shit to keep happening, America is going to keep losing its tech edge. These patent trolls make creating anything in the US risky for businesses.

bborud• 12 years ago

Repeat after me: the patent system cannot be reformed -- the only real way to fix this is to abolish patents completely. Patents no longer serve any other purpose than wasting our time.

brosco45• 12 years ago

If you infringe, you have to pay.

Court: Google infringed patents, must pay 1.36 percent of AdWords revenue

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