Google Ordered To Pay AdWords Royalties Over Patent Infringement

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A court has ruled that Google must pay 1.36% of its U.S. AdWords earnings from 2012 to 2016 to holding company (or patent troll, if you prefer) Vringo, which bought some old Lycos patents in 2011, which Google is said to be infringing upon. Those expire in 2016.

Vringo already won about $30 million after suing Google, Microsoft, AOL, Gannett and Target. Google was ordered to pay $15.8 million before, but Vringo wanted more, and has now won the ongoing royalties mentioned above.

Ars Technica reports:

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.

Because some aspects of Google's revenue are opaque, it's impossible to know exactly what Vringo's win would be worth—and the company is a long way from cashing a check. But if the royalty rate were to be upheld on appeal, Google would surely have to pay hundreds of millions of dollars.

According to Greg Sterling at Search Engine Land, they're looking at potentially $1 billion.

Google is obviously expected to appeal.

Meanwhile, the company is reportedly nearing a settlement with the EU over an ongoing antitrust probe, which could help Google avoid a substantial fine.

Image via Google

Chris Crum

Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.