Google Mounts Patent Battle by Fighting More Lawsuits
By Susan Decker
Feb. 18 (Bloomberg) -- Google Inc. is going on the offensive to fight patent claims, a strategy the Internet-search company says will deter frivolous lawsuits.
The number of patent challenges against Google rose to 14 last year, from 11 in 2007 and three in 2006. The company wants to curb that growth by fighting rather than settling lawsuits, said Catherine Lacavera, Google’s senior litigation counsel.
“I would love to say we’re seeing a leveling off of patent filings,” Lacavera said in an interview. “It’s our hope this will serve as a deterrent.”
Google, which currently has 24 patent cases pending, didn’t settle any patent challenges last year, after resolving cases in each of the previous four years, according to federal court dockets.
It’s a risky strategy, said Alan Fisch, a patent lawyer at Kaye Scholer in Washington. Fighting cases in court, an approach pursued by Microsoft Corp. and BlackBerry maker Research In Motion Ltd., can result in verdicts costing hundreds of millions of dollars. Settling patent fights is often a smarter solution, avoiding drawn-out cases and legal fees.
“If you’re going to take a hard-line approach, you’d better back it up with victories,” said Fisch, who doesn’t represent Google or its opponents.
So far, Google is winning, said Hilary Ware, Google’s managing litigation counsel. The Mountain View, California-based company has fought and won five patent suits filed against it since starting the more aggressive policy two years ago, she said.
Litigation Strategy
“It’s really beginning to pay off as a litigation strategy,” Ware said in an interview. “We’re just seeing the fruits of our labors now.”
Google rose $10.45 to $353.11 in Nasdaq Stock Market trading. The shares have gained 15 percent this year.
Google’s strategy will lead to more litigation, not less, said Raymond Niro, a lawyer for HyperPhrase Technologies LLC. The company said in 2006 that Google infringed a patent owned by HyperPhrase in a Web browser tool-bar feature called AutoLink, which suggests Web addresses based on users’ past search queries. After defeating the challenge, Google is now asking for $500,000 as compensation for legal costs.
“The typical reaction of litigation-oriented attorneys is there’s no sense talking to Google, you might as well just sue them,” Niro said. “They want to project a very aggressive approach to litigation.”
Wisconsin-based HyperPhrase challenged the request for fees, saying Google won only on a “notoriously unpredictable” interpretation of the patent and indulged in “impermissible hindsight” in arguing that HyperPhrase should have given up the fight.
Google Earth
In October, a judge in Norfolk, Virginia, ruled that Google’s AdWords feature didn’t infringe a patent for online bidding owned by Bid for Position LLC of Boca Raton, Florida. The case in on appeal. In 2007, Google won a ruling in Boston that ended a lawsuit from Skyline Software Systems Inc. of Chantilly, Virginia, which sought to shut down Google Earth, a program that shows images and data from satellites and airplanes.
Google sometimes goes after companies for legal expenses too. Two years ago, a judge in Fort Lauderdale, Florida, sanctioned F&G Research Inc. in Naples, Florida, for filing suit against Google over a scrolling computer mouse, saying the case shouldn’t have been filed because Google doesn’t sell mice. The judge ordered that Google be paid about $125,000 for legal costs.
Lawyers for the companies that challenged Google in these cases declined to comment or didn’t return messages.
Sometimes Settles
Google isn’t opposed to settling patent cases when warranted and has resolved suits in the past, Ware said. Still, the company was getting sued too often and didn’t want to be seen as an easy target, she said.
Patent litigation isn’t Google’s only legal challenge. The company is fighting potentially precedent-setting copyright issues brought by Viacom Inc. over the posting of videos on YouTube. And Christine A. Varney, nominated by President Barack Obama to be the U.S.’s next antitrust chief, last year described Google as a monopolist in online advertising.
The strategy of fighting patents makes sense, given that many of the software patents cited in complaints are questionable, said lawyer James Wallace, of Wiley Rein in Washington. Still, a blanket policy of not settling could be dangerous, he said.
Wallace represented NTP Inc., which sued Research In Motion in 2001. After five years of fighting, including a loss at trial, Research In Motion agreed to pay $612.5 million, more than 10 times the original settlement offer from NTP.
Microsoft, the world’s biggest software maker, is fighting more than four dozen patent suits. The company has a split record in trial rulings, and some losses have resulted in hundreds of millions of dollars in damages levied against it.
To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net
Last Updated: February 18, 2009 16:16 EST |
